Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Andlauer Healthcare Group Inc T.AND

Alternate Symbol(s):  ANDHF

Andlauer Healthcare Group Inc. is a Canada-based supply chain management company. The Company offers a robust platform of customized third-party logistics (3PL) and specialized transportation solutions for the healthcare sector. Its 3PL services include customized logistics, distribution and packaging solutions for healthcare manufacturers across Canada. Its specialized transportation services in Canada, including air freight forwarding, ground transportation, dedicated delivery and last-mile services, provide a one-stop shop for clients' healthcare transportation needs. It operates in two segments: Specialized Transportation and Healthcare Logistics. Through its complementary service offerings, available across a coast-to-coast distribution network, it strives to accommodate the full range of its clients' specialized supply chain needs. The Company also provides specialized ground transportation services, primarily to the healthcare sector, across the 48 contiguous U.S. states.


TSX:AND - Post by User

Post by retiredcfon Jan 18, 2022 7:57am
216 Views
Post# 34327484

RBC

RBCTheir upside scenario target is $61.00. GLTA

January 18, 2022

Sector Perform (prev: Outperform) 

Price Target CAD 56.00

Andlauer Healthcare Group Inc.

Despite excellent execution, lowering rating to Sector Perform as shares reach our fair value

Our view: Management has done an impressive job since taking the company public, navigating through the pandemic and building out logistics capacity as well as executing on strategic acquisitions. With the shares now up over 3.4x since IPO, we think the valuation now reflects the company’s solid fundamentals, its strong management team, and a pick-up in M&A activity post pandemic. Accordingly, we downgrade AND to Sector Perform (from Outperform), reflecting relative returns.

Key points:

What we are building into our forecasts? It is rare that we reduce our rating on a stock that has had such strong results and has such a positive long-term outlook. We note that our out-year estimates incorporate high- single-digit organic growth on the back of solid demographic trends as well as structural tailwinds in healthcare logistics. We assume steady (to slightly higher) margins out to 2023 and then build in a meaningful pick-up in M&A activity into our valuation. We apply a 16x target multiple, which is well above peer averages to reflect strong management execution and long-term growth drivers unique to Andlauer, to our M&A adjusted EBITDA estimate. This results in a price target roughly in line with current market prices; we therefore view AND as fairly valued and expect more modest returns going forward.

Recent share price performance. AND shares are up over +18% off recent lows post Q3 results on no significant news, and are up +41% since July 2021 (AND did, however, execute on two meaningful US acquisitions in October). We note that AND’s forward valuation is now at 16x on consensus NTM EV/EBITDA estimates. Our view is that valuation now reflects solid organic growth, steady margins, and a meaningful pick-up in M&A activity. While this aligns with our expectations, we note that our price target implies a return to target of +9%, and we therefore lower our rating on the shares based on relative returns.

Downgrading to Sector Perform (from Outperform); maintaining $56 price target. Our estimates remain unchanged into the quarter. Our 2023 EBITDA estimate remains at $147MM (cons. $152MM) and reflects high- single-digit organic growth and 40 bps of margin expansion versus 2021E. Applying a 16x (unchanged) target multiple to our 2023 EBITDA estimate, adjusted for M&A, results in our $56 price target (unchanged). Our price target implies a return to target of +9%, and we therefore reduce our rating to Sector Perform to reflect lower relative returns.


<< Previous
Bullboard Posts
Next >>