Inside the Market’s roundup of some of today’s key analyst actions
is taking a “favourable” long-term view of the North American environmental services sector, citing “its proven ability to consistently price above cost inflation due to high market concentration, ongoing momentum in merger and acquisition activity supported by solid free cash flow generation, potential for volume rebound as industrial activity recovers, upcoming margin accretion from sustainability investments, and strong capital discipline that rewards shareholders.
“While we have a positive thesis on the sector, we are also mindful of some key risks, including the potential for compression in valuation multiples given they are rich in a historical context, increasing commodity exposures from sustainability projects, and the potential for normalization in price/cost spreads,” he said.
“We believe ARE’s backlog could double over the next two years,” he said. “Excluding legacy charges, ARE has delivered 8.0-per-cent TTM construction EBITDA margin —combined with improved project selection and the new non–fixed price model, this gives us greater confidence that ARE can achieve at least 7 per cent in 2026 .”
He resumed coverage of the Calgary-based exploration and production company, which is a spin-out of Spartan Delta Corp., with an “outperform” rating, seeing it positioned for “accelerating and deepening value capture for shareholders.” “That program is intended to set the stage for its program, supporting 30-per-cent PPS growth and 80-per-cent CFPS growth , as contribution to the long-range plan targeting outsized and compounding 30-per-cent PPS and 50-60-per-cent CFPS CAGR towards its critical mass at 20-25 mboe/d through 2028,” he said.
Valuation Rating Program Ses Target Potential Growth SES Cowen Scarborough
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