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Investing.com - Stifel has raised its price target on Neo Performance Materials Inc. (NEO:CN) to C$22.00 from C$17.50 while maintaining a Buy rating, following the company’s strong second-quarter performance and increased guidance.
Neo reported second-quarter 2025 revenue of $115 million, exceeding Stifel’s forecast of $106 million and the Street’s expectation of $109 million. Adjusted EBITDA reached $19 million, representing a 38% beat compared to Stifel’s estimate and a 36% beat versus consensus.
The company has raised its full-year 2025 EBITDA guidance to $64-68 million from the previous $55-60 million, reflecting a 14.8% increase at the midpoint. Neo has already generated $36.1 million in EBITDA year-to-date, suggesting approximately $30 million for the second half of 2025.
Stifel has updated its target price methodology to include value for Neo’s Estonia plant, citing executed offtake agreements and management’s increasing focus on Phase II at the facility. The firm applied a 2026E target multiple of 8.0x EV/EBITDA on its 2026E EBITDA estimate of $69 million while including a present value of projected EBITDA from the Estonia plant.
Neo Performance Materials has seen its share price increase by 60% over the past three months, expanding its valuation metrics significantly. Despite this rise, Stifel notes the company still trades at lower multiples compared to peers like MP Materials and Lynas (F:LYI).
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