Stifel Canada on Wednesday reiterated its buy rating on the shares of Neo Performance Materials (NEO.TO) while raising its price target to C$38.00 from C$26.00 following the company's first-quarter results.
"NEO's 1Q26 EBITDA beat consensus by 89% while its midpoint 2026E EBITDA guidance was raised by 35% to $105 mm. In our view, the updated guidance only reflects a strong 2Q26E and does not assume any positive impact from elevated rare metals prices in 2H26E. We believe investor concerns around working capital build is overdone, as NEO's business model allows for inventory to be passed through to customers with a margin and there is little risk of negative financial impact. Key catalysts include: (1) sanctioning of Estonia Phase 1B; (2) further details on the Estonia HRE expansion; and (3) additional debottlenecking in Magnequench at Korat, Thailand. We are increasing our target price to $38.00/sh due to a 17% increase in our 2027E EBITDA and expanding our target EV/EBITDA multiple to 12.0x (prior: 10.0x)," analyst Ian Gillies wrote.
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Price: $31.01, Change: $+0.50, Percent Change: +1.64%