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On Thursday, RBC Capital Markets assumed coverage on Secure Energy Services Inc . (TSX:SES:CN) (OTC: SECYF), issuing a Sector Perform rating with a price target of Cdn$17.00.
The firm highlighted the company's successful repositioning towards waste and midstream infrastructure, which has led to an enhanced valuation multiple of the enterprise value to next twelve months' estimated EBITDA (EV/NTM EBITDA).
The re-rating is significant, with Secure Energy's EV/NTM EBITDA multiple climbing from approximately 5.0x in 2023 to 8.6x as of today. This increase reflects the investor recognition of the company's strategic shifts and operational improvements over the past year.
The analyst from RBC Capital Markets noted that the management team at Secure Energy has effectively reoriented the business, which has been a key factor in the company's improved market valuation. The focus on waste and midstream infrastructure has been pivotal in this re-rating process.
"Looking ahead, although the outlook for oil production is favorable and we expect EBITDA growth in 2025/2026, we believe this outlook is fairly reflected in the shares at current levels," RBC analysts added.
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