Desjardins raises price target on 5N Plus

Desjardins Securities analyst Frédéric Tremblay has raised his target on 5N Plus (5N Plus Stock Quote, Chart, News, Analysts, Financials TSX:VNP) to $17.50 from $14.00 in an August 5 report, maintaining a “Buy” rating.

The new target is based on 13.5x his 2026 Adjusted EBITDA forecast, up from 12.5x, which he said “is around recent highs” and reflects the company’s “spectacular” year-to-date performance and expanded visibility.

Following the company’s second-quarter results, Tremblay said 5N Plus is “firing on all cylinders.” He pointed to “another spectacular quarterly beat, a new and expanded supply agreement with First Solar, and an increase in its 2025 guidance.”

“The future continues to look bright, including strong demand momentum in Specialty Semiconductors (eg First Solar, AZUR) and healthy margins in Performance Materials,” he said. “We expect VNP to beat its updated 2025 guidance.”

5N Plus reported Q2 Adjusted EBITDA of US$24.1-million, up 79% year over year and well ahead of Tremblay’s US$18.0-million forecast and the US$17.9-million Street estimate. Revenue rose 27.8%, with margins coming in better than expected.

“Key tailwinds included higher volume (which drove economies of scale) in the terrestrial renewable energy and space solar power sectors, and higher prices,” he said.

As reported by the Globe and Mail, Tremblay highlighted the company’s new agreement with First Solar, saying, “VNP’s production and delivery of CdTe to First Solar for the 2025–26 period will be 33% higher than the initial contract levels.”

He added that a new two-year extension for 2027–28 calls for a “25% increase in CdTe volumes” versus the previous term, and noted that “VNP expects to meet this significant volume increase with minimal capex.”

5N Plus raised its 2025 EBITDA guidance to US$65–70-million, up from US$55–60-million.

Tremblay called the updated outlook “conservative,” pointing to US$44.9-million already generated in the first half.

“Considering this spectacular year-to-date performance and the company’s constructive demand and margin outlook in 2H25 and beyond, we are making significant upward revisions to our estimates,” he said.

He now expects US$76.1-million in EBITDA in 2025 and US$87.2-million in 2026.

“Considering the overwhelmingly positive updates (eg 2Q beat, new First Solar agreement, balance sheet strength), we view an expansion of the valuation multiple as warranted,” Tremblay said. “We are raising our multiple to 13.5 times (from 12.5 times) on our 2026 Adjusted EBITDA estimate, which is around recent highs (matching, in our view, recent record results). This drives a target increase.”

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