National Bank comment.Enerflex (SP & $10 TP) – Undoubtedly the most highly anticipated quarter to come, EFX should report Q3/23 on November 8 after market, with a view of re-establishing sentiment around the stability of its financial results. Recall, its CFO (Rod Gray) recently resigned at quarter-end after a 90-day tenure, for reasons of “fit”. That event, on the back of inconsistent financial results and guidance over recent quarters (see reaction to Q2/23 results), conspired against the markets comfort and confidence, with the stock trading off materially (-31% YTD vs. OSX +12 %). Since then, while guidance has not been formally reiterated, management has made public statements in support of the state of its business and value prospects, and for which, third-quarter results will serve as the first opportunity to be formally validated. That said, this will come on the back of an interim CFO (recently appointed; formal search ongoing) and true validation of its potential may not come until further formalization of its executive ranks, guidance and longer-range reporting is established through year-end (i.e., Q4/23 to be reported in March ’24). So… what do we think? All indications are that the business continues to progress as expected, with financial results expected to be largely flat sequentially (see below) with margins largely intact relative to the prior quarter (some aberrations in the prior quarter due to a one-time recovery) and that profile to further resonate through the fourth quarter, albeit with free cash minimized due to culmination of growth and non-discretionary spend and leverage modestly improving. To that end, and in summary, we believe the primary impediment to value here remains the complexity of integrating such a significant (and diverse) merger, the near-term costs and commitments of which prove to delay the realization of synergies of the high-graded business (remain to be seen). The proof (and value opportunity) will be in the pudding, and we expect first quarter results will serve as a baseline to re-establishing credibility (hopefully complemented by insider buying), while forthcoming 2024 guidance (to come around calendar year-end) should continue to prioritize maximization of free cash (minimal spend) in support of its ultimate value potential. The company’s equity value has been re-rated and the stock is trading in the range of 3.3x 2024e EV/EBITDA (vs. peers 6.2x and historical 4.9x), while we have amended our target price valuation (now 4.0x 2024e EV/EBITDA, previously 5.5x 2023e EV/EBITDA) to reflect the underlying uncertainty of its profile until such time as stability of its financials are confirmed, which drives our revised $10 target price in support of 70% price upside and our unchanged