Kodiak Gas Services Has 'Highly Visible' Growth Potential, RBC Capital Markets Says

MT Newswires Live
Aug 14

Kodiak Gas Services (KGS) has visibility into multiyear EBITDA growth amid rising demand across power and natural gas, RBC Capital Markets said in a note Wednesday.

Analysts forecast a five-year EBITDA compound annual growth rate of 16% for Kodiak.

The investment firm said Kodiak delivered a "solid" Q2, with adjusted EBITDA beating analyst estimates by about 2%, and management raised the low-end of its full-year adjusted EBITDa guidance range.

The company has a stable cash flow profile, benefiting from a young fleet and a high percentage of contracts on terms, the firm said, adding that the tight natural gas contract compression dynamics are favorable for the company.

RBC Capital Markets retained an outperform rating on the stock and increased its price target to $88 from $84.

Shares of Kodiak Gas Services were up 1.4% in Thursday trading.

Price: 62.94, Change: +0.88, Percent Change: +1.42

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