Evertz gets price target raise at Canaccord Genuity

A better than expected fourth quarter has Canaccord Genuity analyst Robert Young raising his price target on Evertz Technologies (TSX:ET).

Yesterday, Evertz reported its fourth quarter and fiscal 2017 results. In the fourth quarter, the company earned $20.7-million on revenue of $106.7-million, a topline that was up 11 per cent over the same period last year.

Young say that Evertz’s Q4 revenue and EBITDA were “significantly” better than his estimates. He says new products are powering the way.

“While we acknowledge the broadcast business is in the weakest year of its four-year cycle, we believe that this is offset by customer demand for new Evertz products, principally its IP and software-defined video networking (SDVN) offering and DreamCatcher,” says the analyst. “This is backed by recent wins with Turner, Discovery Communications and DAZN in Japan. We also believe that Evertz is making strong inroads into the Pro A/V space”.

In a reseach report to clients today, Young maintained his “Buy” rating on Evertz Technologies, but raised his one-year price target on the stock from $19.00 to $19.50, implying a return of 17.4 per cent at the time of publication.

Young think Evertz will post EBITDA of $114.4-million on revenue of $419.4-million in fiscal 2018. He expects those numbers will improve to EBITDA of $130.1-million on a topline of $457.1-million the following year.