In a report released yesterday, John Gibson CFA from BMO Capital reiterated a Buy rating on Black Diamond, with a price target of C$17.00.
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John Gibson CFA has given his Buy rating due to a combination of factors, primarily driven by Black Diamond’s strategic acquisition of Royal Camp Services Limited. This acquisition, valued at approximately $165 million, is expected to enhance Black Diamond’s Workforce Solutions segment by adding significant capacity and services, including around 6,500 beds and catering/hospitality services. The acquisition is anticipated to be financially beneficial, with Royal Camp’s historical EBITDA performance indicating an attractive acquisition multiple.
Furthermore, John Gibson CFA highlights the favorable market conditions for Black Diamond’s Workforce Solutions, bolstered by the Canadian government’s recent nation-building initiatives and increased defense spending. These factors are expected to drive strong utilization and bidding activity in the sector. Additionally, the financial outlook for Black Diamond is positive, with increased EBITDA estimates and a manageable leverage position, supporting the increased target price and reinforcing the Buy rating.
Based on the recent corporate insider activity of 70 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 BDI in relation to earlier this year.