Stifel raises Civeo stock PT to $31, citing continued strong free cash flow

On Tuesday, Stifel adjusted its price target on Civeo (NYSE: ), a provider of workforce accommodation, hospitality and facilities management services, to $31 from the previous price of $30, while maintaining a buy position on the stock. into the rating. The company's decision is in response to Civeo's consistent performance and strong free cash flow (FCF) generation.

Civeo has demonstrated a strong track record, with average annual free cash flow of approximately $75 million from 2019 to 2023, equivalent to 20% of its current market capitalization annually. Stifel predicts that Civeo will generate $58 million in FCF by 2024, equivalent to an FCF yield of 16%. This performance is seen as a key driver behind the company's confidence in the stock.

The company's strategy of returning cash to shareholders was seen as a positive. With a current dividend yield of 4.3% and stock buybacks, Civeo is actively distributing its financial returns to investors. Stifel expects this practice to continue.

In light of these factors, the company slightly adjusted its forecast for Civeo. The endorsement of the Buy rating and the raised price target reflect Stifel's positive outlook on the company's financial health and its ability to sustainably reward shareholders.

Investment Professional Insights

InvestingPro's latest data and analysis provide more context for Stifel's positive assessment of Civeo (NYSE:CVEO). The company has a market capitalization of $337.37 million and an adjusted price-to-earnings ratio of 27.91 for the trailing 12 months to the first quarter of 2024, indicating market recognition of the company's earnings potential. The PEG ratio, which combines the price-to-earnings ratio with expected earnings growth, is a very low 0.03, suggesting the stock may be undervalued given its growth prospects.

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InvestingPro Tips highlights that while Civeo has faced volatility recently, with its share price falling over the past week and month, the company's valuation implies a strong free cash flow yield, which is consistent with Stifel's analysis. Additionally, Civeo's liquid assets exceed its short-term debt, providing financial stability, and analysts predict it will be profitable this year, as confirmed by the company's trailing twelve month earnings.

For investors seeking a deeper understanding of Civeo's financial health and stock performance, InvestingPro provides additional tips, including insights into the company's modest debt levels and the relative position of the stock price relative to its 52-week high.For these insights, visit and use the coupon code PRONEWS24 Annual or biennial Pro and Pro+ subscriptions receive an additional 10% discount. There are a total of 9 InvestingPro tips to help you fully understand Civeo's investment potential.

This article was generated with the support of artificial intelligence and reviewed by an editor. For more information, please see our terms and conditions.

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