On Thursday, BMO Capital Markets adjusted its outlook on CES Energy Solutions (OTC:CESDF) Corp. (CEU:CN) (OTC: CESDF) shares, raising its price target to Cdn$9.00 from the previous Cdn$8.00, while reiterating an Outperform rating on the stock. The revision follows the company's report of a substantial quarterly performance, which showcased record revenues and EBITDA margins.
CES Energy Solutions, a provider of chemical solutions to the oil and gas sector, achieved a significant milestone with record revenue figures emerging from operations in both Canada and the United States. The company also reported an impressive EBITDA margin increase of over 17%, signaling robust profitability.
The positive adjustment in the stock's price target is partly attributed to potential market share gains that CES Energy Solutions may realize following the SLB/CHX deal. Additionally, the firm is anticipated to benefit from a potential index inclusion in June, an event that is expected to generate further demand for the company's shares.
The new target price of Cdn$9.00 is based on approximately 6 times the estimated 2025 enterprise value to EBITDA (EV/EBITDA) ratio. BMO Capital Markets' continued Outperform rating indicates confidence in the stock's potential to perform well against the market.
The company's strong quarterly results and the anticipated catalysts are likely to keep investor interest high in the near term as market participants evaluate the implications of the updated valuation and future market dynamics for CES Energy Solutions.
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