Stifel Canada on Thursday maintained its buy rating on the shares of Superior Plus (SPB.TO) while raising its price target to C$10.00 from C$9.00 as it adjusted its models following the company's first-quarter results.
"We are updating our estimates following SPB's Q1/26 results. Q1/26 was an encouraging update, with propane results better-than-feared and the delivery optimization challenges seemingly stabilized. However, the key focus is the emerging data center opportunity at Certarus and the need to pause the NCIB to fund capex. To date, five data center contracts have been secured, including the previously announced large hyperscale project slated for mid-2027. There is a healthy amount of investor skepticism surrounding the capital investment required to pivot into data centers. We sympathize given the recent execution challenges and the perceived lack of barriers to entry to CNG distribution but we think the risk/reward is compelling (even if this proves to be an AI/data center bubble). Also, as a scaled early-mover, the initial years of this nascent opportunity could be very attractive akin to Certarus' first 10-years of O&G growth," analyst Daryl Young wrote.
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Price: $7.64, Change: $+0.19, Percent Change: +2.55%