Energy Services of America initiated with a Buy at Lake Street

Lake Street initiated coverage of Energy Services of America (ESOA) with a Buy rating and $21 price target Energy Services should see sustained growth after completing a successful turnaround effort and diversifying to higher- margin and less cyclical verticals, says the analyst, who believes investors are missing the changes in the business mix. Operating margins and free cash flow have improved and the recent acquisition of Tribute Contracting increases penetration in the “attractive” water vertical, the analyst added.