Yesterday Stifel GMP raised their price target on Eguana Technologies (TSXV: EGT) from C$0.85 to C$0.90 and reiterated their buy rating on the company. This comes off Eguana closing its February $20 million equity raise as well as recent improvements in Eguana’s supply chain. Stifel says that the company now has a lot of cash coupled with the anticipation of large revenue growth during the second half of this year.
Their analyst Ian Gillies writes, “We believe these initiatives will help insulate it from some supply chain issues that were articulated on solar + battery storage 1Q21 conference calls. We remain optimistic on the company’s sales growth in 2H21e, 2022e and 2023e.”
Gillies says that the supply chain should be the primary focus for the company. He says that many of the major U.S solar and storage companies have reported financials over the last week and the key topic on the managements calls have been around supply chain management and disruptions, but Gillies comments that most of the company’s raw materials have already arrived back in late March and early April. He writes, “The recently received orders should allow for strong y/y sales growth markers in 2Q21e/3Q21e/4Q21e, but will likely weigh on 1Q21e. The company has already begun placing orders to support sales for 2H21e.”
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Onto the first quarter, Gillies says that this quarter is not a relevant quarter, he says this because, “it does not reflect the improvement in its capitalization in February 2021.” Stifel’s focus still remains on the second half of this year, and is carefully listening for management’s commentary on residential battery storage demand.
Below you can see Stifel’s updated 2021 – 2023 estimates.
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