Keel Infrastructure: this analyst just trimmed his price target

Keel Infrastructure (Keel Infrastructure Corp. Stock Quote, Chart, News, Analysts, Financials TSX:KEEL) has withdrawn its target of signing three data centre leases by year-end after permitting delays in Pennsylvania pushed back its development schedule.

In his Nov. 6 report, ATB Cormark Capital Markets analyst Martin Toner lowered his target to C$7.00 from C$8.00 but maintained his “Outperform” rating, saying the delays have not changed his longer-term outlook for the company’s 417 megawatts of near-term data centre capacity.

“The key takeaway is that management no longer expects to sign three leases by year-end and has given no timing on leasing, but remains highly constructive on signing its first lease,” Toner said.

He said Pennsylvania’s new executive order on data centres has delayed permitting and commercial timelines by several months. Although substations at the company’s Panther Creek and Sharon projects remain on schedule to receive power in 2027, revenue is now expected to begin in early 2028. “All three near-term sites are down to their final permits or in construction, and no permit application has been denied,” Toner said.

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Meanwhile, construction began during the third quarter at Keel’s 18-megawatt Moses Lake project in Washington, which is fully funded through the company’s existing cash resources.

Toner thinks continued demand for data centre power supports the investment case despite the revised timelines. “The industry remains short of power for 2027 and 2028, and KEEL’s 417MW of near-term capacity is further advanced than it was 90 days ago,” he said.

Keel reported third-quarter revenue of US$27.6-million, exceeding Toner’s US$20.6-million estimate and consensus of US$18.7-million. The company recorded negative Adjusted EBITDA of US$27.4-million, compared with Toner’s forecast of negative US$31.3-million.

Keel ended the quarter with US$815.8-million in cash and reported approximately US$780-million in unrestricted liquidity as of Nov. 4. Management expects existing resources to cover approximately US$380-million in commitments before leases are signed.

Toner revised his forecasts to reflect the later start of data centre operations.

“We are revising our financial model to reflect Q3/26 results and the updated timing of HPC data centre revenue,” he said. “Moses Lake now drives first lease revenue in Q3/27E, and Panther Creek and Sharon now start in Q1/28E, after Management guided to early-2028 revenue and no 2026 lease signings.”

The analyst increased his fiscal 2026 revenue forecast to US$122.4-million from US$102.4-million and reduced his expected Adjusted EBITDA loss to US$93.8-million from US$104-million, reflecting continued bitcoin mining revenue. For fiscal 2027, he raised his revenue estimate to US$103.7-million from US$37.3-million and reduced his expected Adjusted EBITDA loss to US$102.4-million from US$121.6-million.

However, the Pennsylvania delays prompted him to lower his fiscal 2028 data centre revenue forecast to US$265.6-million from US$351.8-million and his Adjusted EBITDA estimate to US$94.5-million from US$143.5-million.

Toner’s revised target reflects the delayed revenue contribution and financing costs associated with the development program.

He added that the company’s growth prospects remain attractive, although securing its first data centre lease is an important milestone for validating its strategy and accessing project financing.

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