Legence Corp. Class A (LGN) has received a new Buy rating, initiated by Bernstein analyst, Chad Dillard.
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Chad Dillard has given his Buy rating due to a combination of factors that position Legence Corp. Class A for significant growth. The company is strategically situated at the convergence of two major trends: the increasing demand for energy-efficient infrastructure and the ongoing skilled labor shortage. This advantageous positioning is expected to drive an 11% compound annual growth rate in revenue and EBITDA through 2027, which is notably faster than its peers and not fully reflected in the current stock price.
Additionally, Legence benefits from exposure to rapidly expanding markets, with half of its revenue derived from sectors like data centers and healthcare. The company is also poised to capitalize on rising electricity prices and the need for retrofitting, which constitutes a significant portion of its sales. Furthermore, Legence’s vertical integration and efficient labor productivity enhance its competitive edge, supporting a potential increase in market value. The anticipated deleveraging from IPO proceeds is expected to further accelerate growth through mergers and acquisitions, potentially boosting EBITDA growth to 16%.
In another report released today, BMO Capital also initiated coverage with a Buy rating on the stock with a $36.00 price target.
Based on the recent corporate insider activity of 8 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of LGN in relation to earlier this year.