Glentel’s (TSX:GLN) strong performance in Canada is offsetting volatility in Australia, says Paradigm Capital analyst Gabriel Leung.
On Wednesday, Glentel reported its Q3, 2014 results. The company earned $5.88-million on sales of $401.4-million, a 19% topline beat of last year’s third quarter.
“The third quarter of 2014 results reflect the positive benefits from the company’s buying power, marketing focus and earned revenues from its supply partners based on performance,” said CEO Tom Skidmore.
Leung says he was pleased with Glentel’s third quarter results, especially the company’s improvements in Canada. The company topped his expectations both in terms of revenue, where he had modeled $393-million and in terms of EBITDA. Glentel’s Q3 EBITDA number of 21-million bested his expectation of $15-million. While he is concerned about volatility in Australia, Leung thinks it could be dampened by a new agreement with Vodafone and the company’s continuing expansion into the Philippines.
In a research update to client this morning, Leung upgraded Glentel from “Hold” to “Buy” and raised his one-year target price on the stock from $12.00 to $14.00, implying a return of 31% at the time of publication. The analyst says the re-rating is the result of the introduction of his 2015 estimates. The analyst believes Glentel will post EBITDA of $69-million on revenue of $1.587-billion in fiscal 2015.
Shares of Glentel closed today up .9% to $10.80.