In a report released yesterday, John Gibson CFA from BMO Capital maintained a Buy rating on Enerflex (EFX – Research Report), with a price target of C$16.00.
John Gibson CFA has given his Buy rating due to a combination of factors that highlight Enerflex’s strong financial performance and strategic positioning. The company’s recent quarterly results surpassed expectations, driven by robust performance in its EI and AMS segments, which provide stable and recurring revenue streams. This stability is further supported by a significant increase in ES margins, contributing to a strong EBITDA margin of 22%.
Additionally, Enerflex’s improved balance sheet, with leverage now at the lower end of its target range, provides the company with flexibility in capital allocation. Despite the current pressure on its share price, the company’s strong free cash flow generation suggests a potential for shareholder returns through a buyback program. While the price target has been adjusted to reflect macroeconomic uncertainties, the overall outlook remains positive, supporting the Buy rating.
Gibson CFA covers the Energy sector, focusing on stocks such as Trican Well Service, Precision Drilling, and CES Energy Solutions. According to TipRanks, Gibson CFA has an average return of 20.8% and a 56.69% success rate on recommended stocks.
In another report released yesterday, RBC Capital also maintained a Buy rating on the stock with a $14.00 price target.