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On Thursday, BMO Capital Markets updated its outlook on Superior Plus Corp (TSX:SPB:CN) (OTC: SUUIF), with a price target increase to Cdn$9.00, up from the previous Cdn$8.00. The firm continues to endorse the stock with an Outperform rating.
The adjustment follows Superior’s recent Investor Day held in Toronto, where the company outlined new financial goals extending to the year 2027. Superior Plus has raised its "Superior Delivers" target, which is part of its strategic plan to enhance shareholder value. The company’s focus on improving operational efficiency in its Propane segment, coupled with potential market share gains, was emphasized as a pivotal aspect of its growth strategy.
Additionally, Superior’s involvement with Certarus, a company specializing in the delivery of compressed natural gas, is expected to reap benefits from consistent industrial demand. BMO Capital analysts anticipate that these initiatives will significantly contribute to per-share financial metrics.
The bullish outlook is further buoyed by Superior’s aggressive stock buyback strategy, which is expected to continue. This strategy, along with the company’s ongoing efforts to reduce debt, has been recognized as a strong foundation for future growth.
In the words of the BMO Capital analyst, "We expect meaningful torque to per-share metrics, especially as SPB continues its aggressive buyback strategy, supported by ongoing deleveraging." The new price target of Cdn$9.00 is based on approximately 7.0x the projected 2026 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) ratio.
BMO Capital has reiterated its Outperform rating, reflecting confidence in Superior Plus Corp’s ability to execute its strategic initiatives and deliver on its financial targets.
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