FormerXBC Inc XEBEQ

Canaccord upgrade

[Dunworkin2]

Canaccord Genuity’s Yuri Lynk raised his target for Xebec Adsorption Inc. (XBC-T) to $2.50 from $2.25, reiterating a “hold” recommendation. The average is $3.06.

“We believe Xebec is well positioned to benefit from the increased demand for renewable gases that we see evolving from the energy transition,” he said. “This growth potential was evident in management’s strategic three-year plan released last month. Nonetheless, we remain on the sidelines as we await signs of improved execution, especially with input cost inflation and logistical issues likely to weigh on Q1/2022. Currently, Xebec trades at 2.1 times EV/Sales (2022E) versus industrial gas peers at 2.5 times. We set our target using 1.8 times EV/Sales (2023E) down from 2.0 times previously. The reduction in our target multiple reflects our concern Xebec may struggle to profitably replace this carbon capture order when it rolls off next year and the execution risk associated with such a large contract.”

 

[tamaracktop]

Ballsy move

[Ciao]

Looks like a deliberate attempt to keep the share price target low when XBC just announced a monster contract that exceeded it's 2021 annual revenues. execution risk concern: UEC has been mfg compressors for 38 years, these will be standardized units in 2 configurations, sure there will be always be a learning curve, but the expertise is there and XBC also has another company that has

[Lesalpes29]

Will be interesting to aee the target price by Desjardins. At 4.50 before the contract if I remember well!

[Hesiod07]

Probably they know they will never get underwriting business from XBC and their "research" may be cover for their hedge fund and other clients who are short the stock. Brokerages after all provide research for order flow, long or short.

[Ciao]

Absolutely, it's all tied to fees. Look how ANRG had it's $40 target maintained after 2 missed quarters, finally it was downgraded to a $35 target price recently. A few days later TD helps with a bought deal at $12.50.