GRA stock has price target lowered at Paradigm

Following a new development at NanoXplore (NanoXplore Stock Quote, Chart, News, Analysts, Financials TSX:GRA), Paradigm Capital analyst J. Marvin Wolff has lowered his price target on the stock.

On November 22, GRA announced that it had successfully developed a novel dry graphene manufacturing process it said would produce high yield exfoliation without impurities.

“Our team’s dedication to innovation and sustainability has led to this remarkable achievement,” said CEO Soroush Nazarpour. “The dry manufacturing process not only underscores our commitment to environmental stewardship but also reinforces NanoXplore’s position as the leader in cost-effective, high-performance graphene solutions. This technological advancement reinforces Nanoxplore’s commitment to pushing the boundaries of what is possible in field of carbon technology and reaffirms its role as an industry pioneer.”

In a research update to clients November 23, Wolff maintained his “Buy” rating on GRA, but lowered his price target on the stock from $16.00 to $10.50, implying a return of 436 per cent at the time of publication.

The analyst explained the reasoning behind the decision.

“We have refreshed our model to account for this significant improvement in graphene production dynamics,” he said. “While revenue is lower, volumes remain solid and EBITDA is robust. We currently value the graphene side of GRA on FY28 EBITDA of ~$76M; using 15x EV/EBITDA and an 8% discount rate we arrive at $4.88/share. Our valuation of GRA’s 50% ownership of VoltaXplore is $5.53, using a 15x EV/EBITDA multiple and 8% discount rate. Adding the two gives us our new $10.41 (rounded to $10.50) target price ($16.00 prior).”

Wolff thinks GRA will post EBITDA of $5.6-million on revenue of $136.2-million in fiscal 2024. He expects those numbers will improve to EBITDA of $42.8-million on a topline of $158.0-million the following year.