BMO Capital maintained its Outperform rating and Cdn$18.00 price target for Dye & Durham Ltd (DND:CN) (OTC: DYNDF). The firm's analysis followed the company's fourth-quarter results for fiscal year 2024, which aligned with expectations in terms of revenue and EBITDA, despite higher research and development capitalization than anticipated.
Additionally, Dye & Durham reported a better-than-expected levered free cash flow (FCF).
The company's fourth-quarter performance indicated resilience, even as BMO Capital adjusted its fiscal year 2024/25 EBITDA estimates downward.
This revision was due to softer industry transaction volumes than initially projected, although the firm's previous estimates were above the consensus.
BMO Capital's stance on Dye & Durham's stock remains positive, citing reasons such as the company's evolving revenue mix and its ability to generate cash. The firm believes that the current market valuation does not fully reflect Dye & Durham's financial strengths.
Dye & Durham's latest financial disclosures have been critical in BMO Capital's analysis, with the company's revenue and EBITDA meeting the expected figures for the quarter.
The higher research and development capitalization noted in the report did not deter the firm's optimistic outlook on the stock's potential.
BMO Capital's reiteration of the Outperform rating and the Cdn$18.00 price target for Dye & Durham is based on the company's consistent financial performance and promising cash generation capabilities, despite some adjustments to future EBITDA expectations due to current industry conditions.
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