On Wednesday, BMO Capital adjusted its price target for Enerflex Ltd. (EFX:CN) (OTC: ENRFF) shares, a company specializing in energy infrastructure solutions, from Cdn$11.00 to Cdn$10.00. The firm maintained its Outperform rating on the stock despite the revision.
The reduction in the price target comes after Enerflex reported its earnings, revealing that its headline EBITDA fell short of market expectations. The miss was attributed mainly to increased expenses from the company's Cryogenic project in Kurdistan.
Further complicating matters, a drone attack occurred post-quarter, leading to a declaration of force majeure and a halt in operations.
Despite these setbacks, BMO Capital highlighted several positive aspects of Enerflex's quarterly performance. Notably, the company demonstrated significant free cash flow and made substantial debt repayments during the quarter. These factors are seen as supportive of the stock's value.
The new price target of Cdn$10.00 is based on approximately 4 times the company's projected 2025 enterprise value to EBITDA ratio. BMO Capital's continued Outperform rating indicates a belief that, despite near-term challenges, Enerflex holds potential for strong performance in the future.
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