Baird analysts led by Ethan Bellamy said, "Expect Transmix EBITDA rebound. SUN's acquisition of this already-public asset from an ailing frack sand producer is predicated on EBITDA reaching roughly $25 million per annum in two years, which would imply a 7x multiple, far superior to the 18x multiple on LTM segment EBITDA of $10 million."
The analysts noted that Sunoco was involved in three transactions recently. While the $76 million deal was closed in June, the brokerage believes the second quarter reflected one week of contribution due to this transaction. Its ~$78 million Central TX transaction was also closed in June current year. The third transaction of $179 million is predicted to close in the third quarter.
While predicting the second-quarter results to be critical, the brokerage expects an ATM to come on line during the third quarter. As a result, two million units offering is expected in the fourth quarter. Therefore, the brokerage sees strong quarter-over-quarter growth in EBITDA fueled by 22 percent growth in volumes on normalized fuel margins.
At time of writing, Sunoco was trading down 3.43 percent on the day at $29.03.
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.