2023-11-08 22:48:26
Heavy-duty electric vehicle maker Lion Électrique reported third-quarter revenue of $80.3 million. (Photo: courtesy)
What to do with the titles of Stella-Jones, Coveo Solutions and Lion Électrique? Here are some analyst recommendations likely to move prices soon. Note: the author may have an opinion completely different from that expressed.
Stella-Jones (SJ, $80.25): Acumen Capital analyst increases its target price over one year
The manufacturer of poles, railway ties, industrial products and residential lumber Stella-Jones revealed earnings before interest, taxes, depreciation and amortization (EBITDA) of $193 million ($M) during its third quarter, which easily beat analysts’ consensus of $144.7 million and the expectations of Jim Byrne of Acumen Capital of $144 million.
Revenues reached $949M, which also exceeded analyst expectations of $906.6M and consensus expectations of $911.7M. “Excluding the effects of variations in currency conversion rates ($17M) and acquisitions ($29M), revenues increased by 9% compared to those of the corresponding period in 2022, thanks to the good performance of the sectors of the railway poles and ties,” writes Jim Byrne.
The latter also highlights that the gross profit margin for the quarter was 20.3%, while analysts on average anticipated a performance of 15.9%.
Revenues from the pole sector for the utilities sector amounted to $438M during the quarter, compared to $331M last year. Excluding the effects of currencies and acquisitions, Jim Byrne highlights that growth is 21% year-on-year and mainly attributable to an increase in prices.
Same thing for the railway tie sector, which recorded revenues of $230M, compared to $199M a year ago. An increase of 13%.
“The management team maintained its forecast of achieving annual revenues of $3.6 billion (B) by the end of fiscal 2025, while maintaining a gross profit margin of approximately 16% . The company, however, anticipates that its profit margin for 2023 will be around 18%,” says the Acumen analyst.
He maintains his buy recommendation on the Stella-Jones stock, but raises his target price over one year, from $80 to $95. He justifies the increase by the strong organic growth in the poles sector and the stability of the performance of the company’s activities in the railway sleepers side.
Coveo Solutions (COV, $10.35): the company revises its revenue forecast downwards
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