Keel Infrastructure keeps $10.00 price target at ATB

ATB Capital Markets analyst Martin Toner has resumed coverage of Keel Infrastructure (Keel Infrastructure Stock Quote, Chart, News, Analysts, Financials TSX:KEEL) with an “Outperform” rating and $10.00 target after the company closed a $458-million convertible note offering.

In a June 11 update, Toner said Keel issued $458-million of 1.25% convertible senior notes due 2032, including the full exercise of the initial purchasers’ overallotment option. Net proceeds of about $445.4-million provide additional capital for data centre development projects.

Toner said the low-cost capital gives Keel liquidity to secure long-lead equipment and accelerate development. The company used a portion of the proceeds to fund capped call transactions, which are designed to reduce potential shareholder dilution on conversion of the notes up to a Keel share price of $11.86.

Because Keel’s existing liquidity is already sufficient to fund its main projects, including Panther Creek, Sharon and Moses Lake, through leasing, Toner said the new capital provides added flexibility for additional infrastructure investments.

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Following the financing, ATB removed its restricted status on the stock and updated its near-term model to reflect the impact of the transaction.

Toner’s $10.00 target is based on a sum-of-the-parts and multiples-based approach, including about $5.0-billion of high-performance computing value.

Toner expects Keel to generate an Adjusted EBITDA loss of $60.9-million on revenue of $122.8-million in fiscal 2026, improving to Adjusted EBITDA of $12.7-million on revenue of $93.6-million in fiscal 2027.

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