Stifel Canada raised its price target on the shares of NFI Group (NFI.TO) to $25.50, from $23.00 ahead of the company reporting its first-quarter earnings on May 7.
Analyst Daryl Young, who is maintaining a buy rating on the company, is forecasting adjusted EBITDA of US$79.6 million, up 27% y/y, but ~3% below consensus of US$81.8 million.
Young is optimistic that results will be smoother for NFI in 2026 as it seems to have navigated the worst of its supply chain and battery recall issues. The balance sheet and cash flow is also supported by the XALT settlement that was announced at the end of last year.
Young also believes the company is "relatively" insulated from Section 232 tariffs. The core 10% duty applied to all coaches and buses/shells entering the U.S. remains unchanged and has been reflected in NFI's current guidance.
"The stock remains attractively valued, in our view, but we acknowledge that it has had a strong run and investors remain jittery following the myriad of challenges in recent years. As such it's harder than normal to gauge what's priced in. Regardless, we are optimistic that NFI will see its first year of uninterrupted production since 2019."
Price: $21.63, Change: $-0.13, Percent Change: -0.60%