On Tuesday, Parkland Fuel Corp (PKI:CN) (OTC: PKIUF) saw its price target adjusted by Canaccord Genuity, with the new target set at C$50.00, a decrease from the previous C$51.00. Despite this change, the firm continues to recommend a Buy rating for the stock. The adjustment follows Parkland's first-quarter earnings of 2024, which presented a complex performance across different regions.
The company's Q1/24 results showed robust performance in Canada, which was contrasted by weaker outcomes in the U.S. and temporary challenges in both the International and Refining segments.
Nevertheless, Parkland's unchanged EBITDA guidance of approximately $2.0 billion was highlighted as a positive indicator for investors. The firm expressed a cautious optimism that Parkland would meet this guidance, although they noted that the margin for error is now narrower following the quarter's developments.
Canaccord Genuity's position on Parkland Fuel shares remains positive, reiterating the Buy rating despite the slight reduction in the price target. The target is based on 7.6 times the firm's estimated EBITDA for 2024, which remains set at $1,981 million. The valuation of the stock was described as compelling, underpinning the decision to maintain the favorable rating.
The investment firm pointed out Parkland's attractive features as an investment option, including a healthy free cash flow yield, a proven track record of deriving significant synergies from acquisitions, and a distinctive asset base within the North American market. These elements contribute to the firm's view of Parkland as an appealing investment for the medium term.
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