Dye & Durham Ltd T.DND

CANACCORD GENUITY UPGRADED TO $60.00 PRICE TARGET

[DZtrader]

Hey guys, first post to this board. Came across this upgrade yesterday. I entered a fair bit higher. Didn't quite realize there was this much vol in this stock. I guess it gets pushed around a bit on any kind of volume. I wanted to add to the position here today but have not yet. This analyst is fairly highly rated. Still, would not like to see much lower here as we may be teetering on support here.

Dye & Durham Ltd.’s (DND-T) “deep pocket and a robust pipe provide ample runway for growth,” according to Robert Young, an equity analyst at Canaccord Genuity.

In a research note released Tuesday, he raised his sales and earnings expectations for the Toronto-based provider of cloud-based software and technology solutions following a recent bought deal of its common shares and a convertible debenture offering as well as its second-quarter results and stronger-than-expected 2022 guidance.

Mr. Young also feels its decision to walk away from its pursuit of English firm Idox PLC after due diligence “underscores the company’s purchase discipline, and given the weakening in the shares since the announcement, there is an argument to be made that management was responsive to shareholder concerns.” “We viewed the potential acquisition of Idox as modestly accretive and attractive given the Public Sector Software (PSS) business offered potential to consolidate pools of valuable local authority data, which Dye & Durham currently makes available to its customers, while adding deeper

registry capabilities,” he added. “That said, we saw less benefit in the other parts of the business. We believe Dye & Durham will remain acquisitive with ample balance sheet strength and a robust pipeline of targets to aggressively chase growth.”

“Although the Idox deal did not materialize, we believe DND has a robust pipeline of targets that range from legal SaaS players to registries. The bought deal proceeds provide ample dry powder that can be used to opportunistically acquire assets as they become available.”

Mr. Young thinks Dye & Durham’s addition to the TSX Composite on March 22 could increase both its liquidity and visibility to investors. He also sees its Investor Day event on April 20 as a potential catalyst, believing it could “shed light” on its M&A strategy.

He raised his 2021 revenue expectation to $190.7-million (from $151.1-million) and EBITDA of $94.3-million (from $69-million). His 2022 revenue estimate increased to $349.8-million (from $312.9-million) with EBITDA of $202-million (from $165.4-million).

Keeping a “buy” rating for Dye & Durham shares, Mr. Young hiked his target to $60 from $53. The average on the Street is $58.75, according to Refinitiv data.