- Mizuho Securities analyst Gabriel Moreen initiated coverage on UGI Corp (NYSE:UGI) at Neutral with a price target of $38.
- The analyst sees favorable development at UGI’s renewables projects as a growth driver.
- The analyst expects UGI to witness weakness in its Global LPG businesses (AmeriGas and UGI International) in the medium-term, with expected softer margins (~50% vs upper-50% to low-60% recent range).
- The analyst believes UGI will incur higher capital expenditure in order to achieve rebuilding of cash flow generating subsidiaries.
- Moreen also expects acquisition spending of $100 million annually to tackle customer attrition and lower volumes.
- The analyst is expecting -3.5% CAGR earnings decline from FY22-FY26 and projects AmeriGas business to achieve an 8% CAGR earnings target by FY26 (Mizuho estimates of 8.5% CAGR).
- The analyst expects FCF of $0.1 billion vs. UGI’s expectation of $(0.4) billion – $0.2 billion for FY23-FY26.
- Price Action: UGI shares are trading lower by 2.04% at $33.21 on the last check Wednesday.
Ancillary Cannabis Co. Hydrofarm Reports YoY Drop In Q1 Sales, Gross Profit While Narrowing Loss, Expects To Cash In On Marijuana Rescheduling
Hydrofarm Holdings Group, Inc., a cannabis-focused manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture, announced on Tuesday financial results for its first quarter ended March 31, 2024."We are pleased with our first quarter results, as we delivered adjusted gross profit margin expansion for the fifth consecutive quarter driven by elevated operational productivity," Bill Toler, chairman and CEO of Hydrofarm, said.
