Wednesday, July 2, 2025

Xebec: Canaccord Views Three Year Plan As Ambitious, Without Risk

After an uneventful and lackluster quarter, Xebec Adsorption (TSX: XBC) provided investors with a three-year strategic plan to power growth. The company says that it plans to generate $300 million to $350 million in revenue and adjusted EBITDA of 8% to 10% by the year 2024. To meet this estimate, the company says it will be adding a new U.S renewable gas manufacturing and sales base, “with a focus on small-scale agriculture applications.”

Next, they say they will be expanding globally with their hydrogen business, which will be supported “by targeted industrial customers as demand from the hydrogen mobility sector ramps.” They expect to have 20 to 25 decentralized hydrogen production hubs by 2024. Additionally, the company expects to expand its pressure swing adsorption, as well as its compression technologies for carbon capture utilization and storage, while also launching XBC Flow service, which will be a unified brand to “encompass the U.S. Cleantech Service Network, industrial product sales & distribution.”

Lastly, the company expects to invest in new clean technology as well as build new partnerships in North America and China.

The day before, Xebec announced that it signed an MOU for an order worth C$126 million for 51 carbon dioxide reciprocating compression packages. They expect this purchase order to be completed by the end of the third quarter of 2023.

Analysts’ reactions to this news were mixed, as the average 12-month price target was lowered from C$3.86 last month to C$2.97, or a 36% upside to the current stock price. Xebec Adsorption currently has 12 analysts covering the stock, with 6 analysts having buy ratings, 5 having hold ratings and 1 analyst has a sell rating on the stock. The street high sits at C$6 from Craig Hallum.

In Canaccord’s note, they reiterate their hold rating and C$2.25 price target, saying that the 3-year plan is ambitious and “without risks.” They believe that if/when the MOU turns into a binding contract it will help the company get close to their 2024 revenue estimate, but “would leave quite a revenue gap,” and they expect that the company will sign incremental orders in order to get to the guidance.

Canaccord says that this order comes with execution risk as manufacturing CO2 reciprocating compression packages is a new market for the company, additionally, they believe that the company might have its hands full with the 150-190 containerized Biostream and Hy.GEN hydrogen units previously announced.

The commentary follows Canaccord downgrading the company from a buy to a hold, while cutting the price target from $5.00 to $2.25 per share.


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

One Response

  1. Not a Clue. Hurry up and load up so you can revise your recommendations.

    Thanks for posting and letting us know that you will be taking a position.

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