Exchange Income Corp. keeps “Buy” rating at Ventum

Its fourth quarter results are in the books and Ventum Capital Markets analyst Amr Ezzat still thinks there is money to be made on Exchange Income Corporation (Exchange Income Corporation Stock Quote, Chart, News, Analysts, Financials TSX:EIF).

On February 26, EIF reported its Q4 and fiscal 2024 results. In the fourth quarter, the company posted Adjusted EBITDA of $167-million on revenue of $688-million, a topline that was up 5%, year-over-year.

“2024 was our 20th anniversary since our first acquisition in 2004 of Perimeter Aviation. 2024 has been another record year and it continues to demonstrate the strength of our model,” CEO Mike Pyle said. “Amongst our two segments we have a collection of well-run niche businesses which generate strong sustainable cash flows for our shareholders. The collective businesses provide us with diversification and resilience which is readily evident in our 2024 reported financial results. I am even more excited about the next 20 years as we embark on further growth, including the most recently announced acquisition of Canadian North expanding our presence across Canada’s Northernmost geography.”

Ezzat commented on the results, which he described as “Neutral”.

“Aerospace & Aviation (A&A) revenues in line with our estimates; EBITDA meaningfully ahead; outlook remains strong,” he wrote. “Segment performance saw robust Essential Air Services growth (up 15% YoY) and even stronger Aircraft Sales & Leasing growth (up 48% YoY), partially offset by softness in Aerospace (down -41% YoY). The outlook remains constructive, underpinned by multiple growth drivers: the continued ramp-up of recent contract wins into 2025, full-year contributions from recently secured contracts, the Newfoundland and Labrador medevac contract set for completion in Q2/25 with service commencement later in the year, increased flying tempo under select ISR contracts, deployment of a second ISR aircraft for the UK Home Office by mid-2025, and a supportive Aircraft Sales & Leasing demand environment.”

In a research update to clients February 26, Ezzat maintained his “Buy” rating and price target of $74.00 on EIF, implying a return of 45.7% at the time of publication.