Post by dancheon Feb 12, 2026 10:42am
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Post# 36896944
National Bank Outperform $78.00
National Bank Outperform $78.00Valuation and recommendation - a highly defensive name with several active value-creation levers deserves a significantly higher valuation
Between the extremely fluid AI narrative and a volatile geopolitical backdrop, there is no shortage of uncertainties ready to create a potential dislocation for equity markets trading at near-record valuations. In this context, a high-quality compounder in one of the market’s most defensive sectors should, in our view, warrant a premium valuation as a “hedge” in such times becomes increasingly valuable. This is especially true for a business with a clear organic growth runway (mid-single-digit pricing power, urbanization/ population growth), ownership of extremely scarce assets (i.e., landfills) steadily declining leverage (and an outstanding track record of accretive M&A in a fragmented market), and continued operational optimization, factors which all apply to GFL in its current state. In addition, given that investors value the company’s GIP and ES stakes in context of recent mark-to-market transactions, future growth in these assets should help compound the net asset value over time. As such, we believe recent weakness in GFL shares (down -10% on an LTM basis vs. +30% for the TSX) has presented investors with an attractive risk-adjusted return opportunity; we see significant upside ahead.