In a report released today, John Gibson CFA from BMO Capital downgraded Parkland (PKI – Research Report) to a Hold, with a price target of C$42.00.
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John Gibson CFA’s rating is based on a combination of factors surrounding the recent acquisition offer from Sunoco LP. The offer, valued at approximately US$9 billion, is seen as a favorable near-term outcome for Parkland shareholders, especially in light of current shareholder concerns and operational challenges faced by the company. The proposed deal includes a mix of cash and shares, offering a premium over Parkland’s trading price at the time of the announcement.
Despite the acquisition offer, Parkland’s trading valuation remains at the lower end of its historical range, particularly when compared to its peers in the Retail/Commercial sector. This valuation, along with the ongoing uncertainties and the anticipated timeline for the transaction’s completion, has led John Gibson to adjust the target price to C$42 and downgrade the stock to a Hold rating. This reflects a cautious stance given the current market conditions and the strategic implications of the acquisition.