Bullboard - Stock Discussion Forum Neighbourly Pharmacy Inc T.NBLY

Healthcare

Neighbourly Pharmacy Inc. is a Canada-based company that operates a network of community pharmacies. The Company is an owner and operator of retail pharmacies located throughout Canada under banners such as IDA/Guardian, Pharmachoice, Pharmasave and Remedy’s RX. The Company, through its subsidiaries, owns and operates a network of retail pharmacies known as Rubicon Pharmacies (Rubicon or... see more

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TSX:NBLY - Post Discussion

Neighbourly Pharmacy Inc > TD 2

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Post by retiredcf on Jun 09, 2023 8:37am

TD 2

Neighbourly Pharmacy Inc.

(NBLY-T) C$18.46

Laser-focused on Operational Excellence and Growth Event

We have lowered our F2024/F2025 EBITDA estimates by ~7%/3%, mostly to reflect the timing of pharmacist relief (more weighted towards H2/F24) and wage inflation. Consequently, our target price falls to $28.00 (from $29.00).

Impact: MIXED

This was Mr. Bourdo's first conference call as CEO, and he kicked it off by reiterating his focus on three growth pillars, including M&A, organic growth, and expanding pharmacists' scope of practice. He also provided investors with an update of his first 90 days as CEO, and appears to have hit the ground running, making progress in several areas:

Launched a new partnership model in several locations in AB and MB. The program will give pharmacy operators a minority stake in pharmacy and a share of profit, which should help attract and retain experienced pharmacists with established community relationships and ultimately drive store performance.

Focus on operational excellence and store-level accountability through monthly business reviews, where best practices can be shared across the network.

Refined patient communication through a simple, but effective, use of technology (i.e., text-enabled pick-up and refill reminders piloted in seven locations), which should enhance client relationships and improve medication adherence.
More selective approach to M&A around site selection and long-term staffing availability. In addition, NBLY's growing status as an "acquirer of choice" should translate into attractive acquisition multiples. We believe that recent acquisition contribution (the last 10 pharmacy acquisitions are expected to generate ~$0.6mm in EBITDA vs. ~$0.5mm for the legacy base) supports the modest change in approach.

TD Investment Conclusion

We remain constructive on NBLY's unique positioning in the underserved rural/ suburban community pharmacy market, the substantial consolidation opportunity, and profitability upside from the expanding pharmacists' scope of practice. However, the shares may remain range-bound until it gets closer to labour relief and/or past the rising interest-rate environment.