Paradigm cuts price target on TTNM

Following first quarter results he describes as “mixed” Paradigm Capital analyst Alexandra Ricci has cut her price target on Titanium Transportation Group (Titanium Transportation Group Stock Quote, Chart, News, Analysts, Financials TSX:TTNM).

On May 13, TTNM reported its Q1, 2024 results. The company posted EBITDA of $9.5-million on revenue of $115-million, a topline that was up 8.3% over the same period last year.

“Titanium had a strong start to 2024, delivering another profitable quarter, propelled by our first-ever U.S. asset acquisition (Crane Transportation), strong performance of our truck transportation segment overall, and our prudent capital management strategy — despite persistent industry-wide challenges,” CEO Ted Daniel said. “However, ongoing pricing pressures led to margin compression and reduced profitability during the quarter. Looking ahead in 2024, we remain focused on diversifying our customer base, leveraging the strength of our U.S.-based footprint, utilizing proprietary technology to strategically allocate capacity and continuing to deliver profitable growth.”

“TTNM’s Q1/24 results were mixed; the U.S. asset-based acquisition in H2/23 resulted in y/y revenue growth,” Ricci said of the results. “Volumes in the quarter improved, with logistics volumes +28% y/y and trucking volumes +23% y/y (Crane driven). Pricing remains a challenge and during the quarter management continued to evaluate pricing concession requests from customers; this resulted in the top-line loss of unsustainable volumes.”

In a research update to clients May 14, Ricci maintained her “Buy” rating but trimmed her price target on the stock from $4.45 to $4.35, implying a return of 100%, including dividend.

The analyst thinks TTNM will post EBITDA of $52.2-million on revenue of $488.3-million in fiscal 2024. She expects those numbers will improve to EBITDA of $63.9-million on a topline of $530.6-million in fiscal 2025.

“Titanium Transportation is at an inflection point,” Ricci wrote. “With a stable business in an established industry, the company is pursuing organic growth through a rapid U.S. expansion strategy for the logistics brokerage business, and an acquisition strategy in Canadian and new U.S. asset-based trucking. What makes TTNM unique is its grasp on technology. It has successfully emerged as a leader in integration and operating technologies which are enhancing efficiencies, unlike many of its peers. We think TTNM is heading into a multi-year period of above industry average growth.”