Stifel Canada on Wednesday raised its price target on the shares of Savaria (SIS.TO) by $4.00 to $35.00 and maintained its buy rating after attending the company's investor day.
"We ... have high confidence in exceptional management to achieve new goals of $1.6b sales/20% EBITDA margins, backed by recent insider buying," said analyst Justin Keywood. Savaria's revenue target represents 12% CAGR (7-8% organic/~4% inorganic). The target is at the high-end of Keywood's $1.1 billion to $1.3 billion organic estimate as strong aging secular trends continue for the end-to-end assisted lift provider.
Savaria will be prioritizing dealer acquisitions to expand territorial coverage and product distribution (e.g. SIS's recent acquisition of Texas-based Baxter Residential Elevators). It will also focus on larger, opportunistic acquisitions that grow the product portfolio and/or fill a niche.
Keywood believes tangible progress on European growth will also be key in unlocking a higher re-rating in the stock as growth in the European business has been one of the few reservations for investors.
Price: $28.82, Change: $-0.13, Percent Change: -0.45%