TerraVest Hold Rating: Balancing Aggressive M&A Strategy with Valuation and Leverage Concerns

John Gibson CFA, an analyst from BMO Capital, has initiated a new Hold rating on TerraVest (TVK).

John Gibson CFA has given his Hold rating due to a combination of factors influencing TerraVest’s current market position. The company’s aggressive M&A strategy, which has seen an increase in acquisition activity, particularly in 2025, is a significant factor. While this strategy has introduced potential growth catalysts, the valuation remains a primary concern, with TerraVest trading at approximately 11 times the 2027 EBITDA estimates.
Another reason for the Hold rating is TerraVest’s current leverage, which stands at around 2.5-3.0 times debt to EBITDA, following a recent equity raise. This financial position suggests that the company might slow its acquisition pace to focus on reducing leverage. Despite the potential for cost synergies from recent acquisitions, the overall modest organic growth expectations and the current valuation levels justify a Market Perform rating with a target price of $180.

Gibson CFA covers the Energy sector, focusing on stocks such as CES Energy Solutions, North American Construction Group, and Precision Drilling. According to TipRanks, Gibson CFA has an average return of 18.0% and a 59.23% success rate on recommended stocks.