CIBC Raises PT, Estimates On Newalta
Monday, December 12, 2021 2:18 PM

CIBC World Markets Inc. lifted its price target and earnings estimate on Newalta Inc. (TSX: NAL.TO), saying accelaration of organic growth highlighted the company's robust 2012 capital program.

The Canada-based company is engaged in the processing of industrial and oilfield-generated wastes through its facilities segment. The company's onsite segment involves the mobilization of equipment and staff to process waste at its customer sites, including the processing of oilfield-generated wastes.

Newalta announced a 2011 capital program of $145 million, of which $45 million will be deployed for facilities and $55 million for onsite.

The brokerage lifted its price target to $16.50 from $16.00. CIBC raised 2012 EPS estimates for the company to $184.60 from $174.80. 

"We believe capital spend for the facilities segment will be for productivity improvements and the addition of satellite facilities. Although several major projects are planned (re-refinery expansion, processing facilities, transfer stations), the majority spending is not expected until 2013," CIBC analyst Jeff Fetterly said in a note.

"Newalta continues to aggressively expand its onsite segment. Although a significant portion of the 2012 spend will be directed towards the Syncrude MFT project (previously disclosed), the company highlighted that two additional projects will be transitioned into long-term contracts," Fetterly added.

NAL.TO, which has been trading in the 52-week range between $9.97 and $13.66, is currently trading 2.1 percent lower at $12.58.