CIBC World Markets Inc. increased its price target on Parkland Fuel Corp. (TSX:PKI.TO) to $15.25 from $14.75, while maintaining its "Sector Outperformer" rating on the stock.
The brokerage tweaked its 2012 EBITDA estimate to $155 million from $161 million, having lowered the expected contribution from the Wholesale & Supply division. CIBC also rolled out its 2013 EBITDA estimate of $168 million as it forecasts volume growth of around 4 percent - 5 percent year over year.
PKI reported fourth-quarter EBITDA of $36.2 million, below CIBC estimate of $42.5 million. The main difference came from lower volumes related to a diesel supply disruption in AB, SK and BC. In addition, the warmer-than-normal weather was a $2.5 million EBITDA headwind in the quarter, CIBC noted.
The Bowden facility start-up has been pushed to fourth quarter of 2012 due to delays in securing a proper contract with its EPCM firm. CIBC views the start-up of Bowden as a key competitive advantage PKI has over other fuel marketers that will help offset the margin contribution from the expiring SU contract.
The stock, which has been trading between $8.07 and $14.30 over the past year, fell 1.9 percent to trade at $13.69 on Thursday.