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Investing.com - UBS maintained its Buy rating on Comfort Systems USA (NYSE:FIX) with a price target of $875.00, according to a research note published Tuesday. The company boasts a perfect Piotroski Score of 9 and maintains a "GREAT" financial health rating according to InvestingPro analysis.
The firm's HOLT system ranks FIX first among 334 global industrial peers, despite the stock's significant outperformance against the S&P 500 index, having gained 67% year-to-date.
UBS cited three key factors supporting its positive outlook: Comfort Systems' strong cash flow return on investment, upward earnings revision trajectory, and robust forecasted value creation driving attractive valuation characteristics.
The research highlighted FIX's capital-light business model, which generates robust cash flows, and noted the company's prudent capital redeployment into capacity expansion and acquisitions that further enhance cash flows.
While UBS acknowledged heightened near-term expectations following the stock rally and current valuation of approximately 23 times next twelve months' EBITDA, it emphasized that business quality and cash flow traits continue to provide fundamental support for the stock.
In other recent news, Comfort Systems USA reported a strong second-quarter performance with a 20% year-over-year revenue increase, with 18.5% attributed to organic growth and 1.5% from acquisitions. The company's impressive results also included a notable EBITDA margin expansion of 310 basis points, surpassing earlier forecasts. In light of these developments, several firms have adjusted their outlook on Comfort Systems USA. UBS raised its price target for the company to $875, citing a robust project environment with bookings extending into late 2026 and mid-2027. Stifel increased its price target to $746, while DA Davidson set a new target of $810, both maintaining a Buy rating. Additionally, Comfort Systems USA announced a new $1.1 billion credit facility, replacing a prior agreement and extending its borrowing capacity. This facility, arranged by Wells Fargo Bank, is secured by a first lien on most of the company's personal property. These recent developments underscore the company's strong financial standing and future growth potential.
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