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Finning International Inc. (FINGF)

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22.800.00 (0.00%)
At close: 09:42AM EDT

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  • A
    Analytica
    Great earnings, congrats management and longs!
  • P
    Poseidon
    Great stock with lots of potential. I got in mid spring and it’s paying off. Very good dividends as well
  • D
    Darren
    I bought a little here. Not sure why so much selling going on in comparison to other stocks. Good company, good product, good safe dividend, good financials. Sure higher interest rates (temporary) followed by recession will hurt sales, but that will hurt all sales, and this stock is getting crushed.
  • J
    Justin
    Bought in today. Just using the dividend discount calculations this is undervalued right now and a great investment to hold assuming the dividend is stable.
  • A
    Analytica
    Great earnings and this article in the Globe today!

    Seeing favourable conditions following a better-than-anticipated fourth quarter of 2021, Raymond James analyst Bryan Fast predicts Finning International (FTT-T +1.41%increase
    ) is heading “to new heights.”

    After the bell on Tuesday, the Vancouver-based Caterpillar dealer reported net revenue for the quarter of $1.774-billion, up 14 per cent year-over-year and above the analyst’s $1.704-billion estimate. Adjusted diluted earnings of 65 cents also topped expectations (53 cents).

    “In what we view as a conducive environment for Finning (key commodity price strength, reopening of economies, healthy backlog) we see further potential upside, particularly as the company realizes the benefits from an improving macro backdrop and operational leverage after improvements in the underlying business in recent years. Evidence of the efforts were on display this quarter, in which the company achieved mid-cycle targets ahead of schedule,” said Mr. Fast. “We expect the momentum to continue into 2022, as the company focuses on product support growth initiatives while managing margin pressures, and taking part in the energy transition.”

    Raising his full-year 2022 EPS projection to 63 cents from 59 cents, he also increased his target for Finning shares by $1 to $44 with an “outperform” rating. The average on the Street is $43.11.

    “On a relative basis, Finning’s stock is now trading at a 9.3-times discount to peer Toromont, versus the historical average at 3.6 times,” he said. “Though we remind investors it is a mistake not to own Toromont’s shares because of an expensive relative valuation, the premium is difficult to ignore, especially as Finning continues to deliver solid results.”
  • A
    Analytica
    In the Globe and Mail today!
    * Raymond James analyst Bryan Fast raised his Finning International Inc. (FTT-T +3.35%increase
    ) target to $43 from $40, exceeding the $42 average, with an “outperform” rating.

    “We continue to point to the valuation disconnect between Finning and peer Toromont as support for our positive view on the name,” said Mr. Fast. “On a relative basis, Finning’s stock is now trading at a 8.6-times point discount to Toromont, vs. the historical average at 3.6 times. “Though we remind investors it is a mistake not to own Toromont’s shares because of an expensive relative valuation, the premium is still well above long-term levels. In what we view as a conducive environment for Finning (key commodity price strength, reopening of economies, healthy backlog) we see further potential upside, particularly as the company realizes the benefits from an improving macro backdrop and operational leverage after improvements in the business in recent years.”
  • A
    Analytica
    In the Globe today!
    Mr. Doumet raised his target price for shares of Finning International Inc. (FTT-T +5.76%increase
    ) by $1 to $43, matching the consensus on the Street. He kept a “sector outperform” recommendation.

    “For 4Q21, we forecast EPS of $0.56, ahead of consensus of $0.53,” he said. “We expect strong pricing and cost leverage (despite inflationary pressures) to drive the beat. The floods in B.C. appear to have had little to no impact on operations; remediation work in the region may boost rental rates and increase the long-term need for infrastructure. As for the election outcome in Chile in December, we expect it will have a limited impact in the near-term; however, a resolution on the mining bill could release pent-up spend beyond 2022. For 2022, mid-single-digit growth in product support, favorable operating leverage, healthy gross margins, and share repurchases, support approximately 15% EPS growth, in our view. Finning continues to make progress on multiple fronts, structurally gaining share and enhancing operating efficiencies. It has been able to cut fixed costs, which should provide earnings upside as volumes recover in what we expect to be a multi-year mining upcycle. Planned capex in the oil sands are expected to climb moderately and copper production is expected to increase from 2021 levels.”

    He trimmed his targets for these stocks:

    Toromont Industries Ltd. (TIH-T +1.15%increase
    , “sector outperform”) to $120 from $122.50. Average: $122.
    Wajax Corp. (WJX-T +1.78%increase
    , “sector outperform”) to $30 from $32.50. Average: $29.75.
  • A
    Antonio
    It’s quite interesting to me how the share price has remained more or less in tact over the past month while the rest of the market is falling into shambles. I suppose the prospects for construction irrespective of the current COVID resurgence are high.
  • J
    Jerry
    Anyone know the reason for the drop today? Haven't found any news yet.
  • h
    hadi
    To buy or not to buy?
  • A
    Analytica
    In the Globe and Mail today!
    Following its first Investor Day event in three years, Canaccord Genuity analyst Yuri Lynk sees Finning International Inc. (FTT-T +1.88%increase
    ) “well positioned to move on acquisitions, continue to increase the dividend (building on 19 years of consecutive growth), and buyback stock.”

    On Monday, the Vancouver-based company said “robust” execution through 2020 has put it back on track to achieve its 2018 investor day objectives. It’s projecting mid-cycle annual net revenue to be in the $7.1- to $7.5-billion range between the third quarter of 2021 and the second quarter of 2022 and expects to achieve earnings per share in excess of $2.00 per share and consolidated return on invested capital above 15 per cent.

    “We found management’s plan to increase revenue to $7.3-billion at the midpoint from $5.8-billion on a trailing 12 months’ basis credible,” said Mr. Lynk.

    He added: “Finning’s digital initiatives represent interesting upside. The company introduced CUBIQ, a new name and brand for Finning’s digital services. The CUBIQ platform provides clients with services such as condition monitoring, parts ordering, and productivity analysis among others. The cost for a client with more than 100 assets is $3-million with a margin comparable to product support. We peg the addressable market for CUBIQ at $600-million based on Finning having more than 200 customers globally with more than100 assets.”

    Mr. Lynk increased 2021 EPS estimate by 12 per cent to $1.94 (from $1.73) and his 2022 forecast by 20 per cent to $2.34 (from $1.95.)

    That led him to raise his target for Finning shares to $42 from $37 with a “buy” rating. The average is $40.17.

    Other analysts making changes include:

    * BMO Nesbitt Burns’ Devin Dodge to $35 from $34 with a “market perform” rating.

    “Finning’s Investor Day presentations highlighted the progress the company is making on many of its key initiatives such as product support growth, expanding/growing its digital services offering, and streamlining its cost structure,” said Mr. Dodge. “Moreover, the demand recovery is tracking ahead of prior projections, with FTT expecting to reach mid-cycle demand over the next 12 months. However, we believe the prevailing uncertainty in Chile will remain an overhang until there is better visibility into the political landscape and the climate for foreign investment.”

    * CIBC’s Jacob Bout to $44 from $41 with an “outperformer” rating.

    “Coupled with a positive macro backdrop (better outlook for infrastructure/commodity end-markets), FTT provided better-than-expected mid-cycle guidance (our 2021 and 2022 adj. EPS estimates rise by 6 per cent and 13 per cent, respectively),” said Mr. Bout. “The one wildcard is political/regulatory issues potentially impacting longer-term Chile copper mine production.

    * RBC Dominion Securities’ Sabahat Khan to $41 from $39 with an “outperform” rating.

    “The outlook and the growth strategies highlighted by management reaffirm our positive view, and we believe the company is well positioned to capitalize on the growth opportunities available across its three regions,” he said.

    * Scotia’s Michael Doumet to $40 from $38 with a “sector outperform” rating.

    “We thought the shares should have performed better following the release,” said Mr. Doumet. “For about 15 years, FTT shares have been range-bound. While the ‘trading psychology’ so far prevails, Finning’s outlook, which targets a record EPS of more than $2.00 over the next five quarters and further incremental EPS growth in a sustained upcycle, enhances the prospects of the shares hitting new highs in the near term.”
  • j
    jay
    Earnings are in..

    Crushed it,

    So glad I held tight!

    💣💰
  • E
    Erik
    Any reason for massive the drop today?
  • D
    Del
    this business has the Canadian Federal Government paying its employees.
  • A
    Analytica
    More coverage in the Globe and Mail today!
    * Scotia Capital analyst Michael Doumet increased his target for Finning International Inc. (FTT-T +0.26%increase
    ) to $44 from $42 with a “sector outperform” rating, while National Bank Financial’s Maxim Sytchev raised his target to $45 from $44 with an “outperform” rating. The average is $43.11.
  • A
    Analytica
    In the Globe and Mail today.
    * RBC analyst Sabahat Khan bumped up his Finning International Inc. (FTT-T -2.38%decrease
    ) target to $39 from $35 with an “outperform” rating, while CIBC’s Jacob Bout raised his target to $41 from $39 with an “outperformer” rating , Scotia Capital’s Michael Doumet increased his target to $38 from $34.50 with a “sector outperform” rating and National Bank Financial’s Maxim Sytchev moved his target to $44 from $43 with an “outperform” recommendation. The average is $38.83.
  • S
    Stelio
    WE BOOMIN
  • A
    Anshul
    I bought it for 34$ ... really confused ...
  • G
    GreenMarty
    No news, stock drops 6.5%?
  • A
    Analytica
    Top Pick on Bloomberg Market Call today.
    David Burrows.
    Finning International (FTT TSX)

    Finning’s international franchise selling Caterpillar equipment into mining, construction, forest and agriculture sectors make it an attractive way for investors to participate in a reflationary upturn in the commodity cycle as well as an active infrastructure business cycle. While Canada is 55 per cent of revenues, the UK and South America offer interesting opportunities.

    Recurring revenue from service at 55 per cent helps insulate Finning from being overly cyclical but new equipment sales gives leverage to economic acceleration.