The analyst is modeling EBITDA of $19.4-million on revenue of $124.5-million for the company’s Q4, which would be 24.8 per cent and 12.3 per cent bumps over last year’s fourth fourth quarter numbers, respectively.
He says increasingly better news from the auto sector is creating a tailwind for the Markham-based company.
“As US auto sales continue trending higher, regulation drives up the use of aluminum components in vehicles and the increased use of interior trimming in vehicles continues; we believe Exco is well positioned to reap the benefits of these positive market attributes as both its AS and C&E segments have a focus on the automotive market,” says Lindsell. “We also expect further strategic acquisitions such as the March 2014 purchase of Automotive Leather Company (ALC), which brought relationships with BMW and other German OEMs, to be additional growth catalysts for the company.”
Lindsell says he expects an international ramp-up at places like Brazil and Thailand will be a profitability driver for Exco in the longer term, and notes that management said it expects the company’s operations in Thailand will turn a profit in the fourth quarter.
In a research update to clients today, Lindsell maintained his “Top Pick” rating and one-year target price of $19.00 on Exco Technologies, implying a return of 32.6 per cent at the time of publication, including dividend.
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