GFL Environment said Spruce Point’s claims regarding the company’s management and business practices are “misleading”, adding that they constitute “false statements”. The waste management company’s shares are advancing 2.6% in pre-market trading on Wednesday, following their 8.2% drop on Tuesday.
On Aug. 18, short seller Spruce Point issued a report on GFL Environment (GFL), stating that “without access to new capital, the company’s shares are worthless and likely uninvestable for institutional investors.” In addition, the report claimed that “GFL’s depiction of its debt is understated by at least C$460 million.” It also contained allegations that its CEO Patrick Dovigi has “questionable business connections”.
In response, GFL’s CEO said that the report contains “numerous inaccuracies and mischaracterizations”. Dovigi added that the allegations are “solely intended to benefit Spruce Point, who has disclosed that it stands to profit significantly in the event that the stock price of GFL declines”.
Meanwhile, Goldman Sachs analyst Brian MaGuire upgraded GFL to Buy from Hold and lifted the price target to $24 (23.2% upside potential) from $21. The analyst is optimistic that GFL “continues to successfully execute its roll-up strategy through multiple acquisitions completed since its IPO, and its earnings have proven more recession-resilient than expected.”
Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 8 Buys and 1 Hold. The average price target of $25.60 implies upside potential of about 31.4%. (See GFL stock analysis on TipRanks).
Related News:
D.A. Davidson Lifts Palo Alto’s PT Ahead Of 4Q Results Next Week
Needham Lifts Fabrinet’s PT After 4Q Earnings Beat
Mizuho Cuts Micron’s PT On Weak ‘Enterprise Demand’