Needham analyst James Ricchiuti reiterated a Buy rating on the shares of Montrose Environmental Group, Inc. (NYSE:MEG), with a price target of $54.
The analyst believes the recent closing of the acquisition of Matrix Solutions significantly expands MEG’s operating footprint in Canada.
The deal also adds a preeminent environmental brand and a large team of environmental specialists with advanced degrees.
As the company continues expanding its market presence, the analyst believes that MEG’s first-mover advantage will be difficult for competitors to replicate.
The analyst thinks Matrix Solutions buyout will significantly impact MEG by establishing it as a significant environmental solutions provider in Canada, with 570 employees, 70% of whom possess advanced degrees, a strong brand, and a blue-chip customer base.
The acquisition also should provide additional cross-selling opportunities, mentions the analyst.
The benefits of the Matrix Solutions deal will become increasingly evident in the coming quarters, he adds.
The analyst thinks there are no other pure-play companies in the market with as broad an integrated environmental services offering as Montrose.
Price Target: MEG shares are trading lower by 0.75% to $42.65 on the last check Friday.
