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AirBoss wins target raise at National Bank

BOS stock

Ahead of the company’s first quarter results, which are due May 8, National Bank Financial analyst Ahmed Abdullah has raised his target price on AirBoss of America (AirBoss of America Stock Quote, Chart, News, Analysts, Financials TSX:BOS).

As reported by the Globe and Mail, Abdullah April 23 maintained his “Sector Perform” rating but raised his price target on the stock from $6.00 to $6.25.

The analyst says one of the company’s divisions has been facing some headwinds that may be subsiding.

“[AirBoss Rubber Solutions] saw a significant pullback in orders towards the end of 4Q as customers focused on destocking, with some of that softness spilling into the early part of January,” he wrote. “Since then, February & March orders saw sequential improvements. We still expect 1Q ARS revs to be down 10 per cent year-over-year but a 10-per-cent quarter-over-quarter improvement. ARS EBITDA should be relatively flat year-over-year at $6.0-milllion as better margins (11.0 per cent vs. 10.0 per cent) will help offset top-line pressure. Results should improve for the segment as the year unfolds with the onboarding of 23 new customers in 2024. At [AirBoss Manufactured Products], the UAW strike was resolved in 4Q, however, 1Q customer volumes within the auto sector remain impacted by higher interest rates, and no new defense contracts have been awarded. As such, we see AMP revs down 25 per cent year-over-year or down 1.4 per cent quarter-over-quarter, and EBITDA of $2.2-million down 69 per cent year-over-year as 1Q23 featured catch-up payments as a result of renegotiated customer agreements.”

The analyst expects the company will post Adjusted EBITDA of $5.4-million on revenue of $96.9-million, a topline that would be down 17.2 per cent over last year’s Q1.

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