Ahead of the company’s third quarter results, Desjardins analyst Chris Li is feeling more bullish about Parkland Corporation (Parkland Corporation Stock Quote, Chart, News, Analysts, Financials TSX:PKI).
On November 1, after the market close, PKI will release its Q3, 2023 results.
The analyst says he expects good things.
“We expect strong organic EBITDA growth in 3Q and reaffirm our view that PKI is well positioned to achieve its organic EBITDA and deleveraging targets,” the analyst wrote. “The investor day on November 14 should provide better insight on how the company will create additional value over the longer term. Despite the strong share price performance (+39% ytd), valuation (~7x NTM EBITDA) remains attractive at one standard deviation below average (~8x) and the weighted average of its peers (~8x).”
In a research update to clients October 19, Li maintained his “Buy” rating on PKI, but raised his one-year price target on the stock from $41.00 to $47.00, implying a return of 16.9 per cent at the time of publication.
“Despite the strong share price performance (+39% ytd), we believe valuation (~7x NTM EBITDA) remains attractive at one standard deviation below the five-year average (~8x) and the weighted average of its retail, commercial and refining peers (~8x),” Li concluded. “A clear path to achieving organic EBITDA targets and deleveraging are key catalysts. We expect the results and investor day to reaffirm our view.
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