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Investing.com - National Bank Financial initiated coverage on Richards Packaging Income Fund (TSX:RPI-U) with an Outperform rating and a price target of C$43.00.
The investment bank noted that Richards Packaging trades at an EV/EBITDA of 7.4x for 2025E and 6.3x for 2026E, below packaging peers (8.3x/7.6x), healthcare distributors (13.5x/12.1x), and other distributors (9.4x/8.4x) for the same periods.
National Bank Financial highlighted that Richards Packaging’s fundamentals compare favorably to peers with EBITDA margins of approximately 13%, in line with manufacturers and distributors, while excelling in cash flow conversion.
The firm’s C$43.00 target is based on the average of 2025E/2026E metrics in its discounted cash flow analysis and 2026E/2027E value in its net asset value analysis, implying EV/EBITDA multiples of 9.5x for 2025E, 8.2x for 2026E, and 7.3x for 2027E.
National Bank Financial projects potential capital appreciation of 32.2% for Richards Packaging, complemented by a dividend yield of 4.1%, while acknowledging execution risks remain as the company’s strategies evolve.
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