Savaria Corp T.SIS

RE:TOP PICK

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TOP PICK

Savaria Corp(SIS-T)

11/12/2024

 

Leader in home accessibility and patient handling products. Benefits from aging demographics. Phenomenal results, increased margins. Over 18% EBITDA margins YTD. 

Stock's down on tariff threat, big overreaction. Buying opportunity. Patient handling products are all made in USA, and most home accessibility is FDA-approved (tariff exempt). Home elevator business may not be exempt, but could easily shift manufacturing to another of its 12 plants worldwide. Yield is 3%.

(Analysts’ price target is $26.64)

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SAVARIA (SIS – TSX): Strong Long-Term Tailwinds

Savaria is a global leader in home accessibility and patient handling products. It manufactures and sells home stairlifts and home elevators, as well as mattresses and ceiling lifts for long term care facilities. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins in 2024 have improved significantly to over 18 per cent. This is thanks to its Savaria One program aimed at helping achieve 20 per cent EBITDA margins by next year though supply chain and operational improvements and $1 billion in sales through cross-selling opportunities. The stock is down 15 per cent on the threat of Trump tariffs which is a gross overreaction and has created a good buying opportunity. Savaria’s patient handling business is all made in the U.S. and most of their home accessibility business is FDA approved, meaning that its products, whether from Canada, Mexico, or China, would be exempt from tariffs. The Bourrassa family has built a great global company that is benefiting from powerful tailwinds of aging demographics and the desire to live at home longer. The stock is now trading at under 10 times forward EBITDA and we see it reaching $30 by the end of next year if the company meets it targets which it seems on track to achieve.