Emeco Holdings' (ASX:EHL) strong balance sheet and its free cash generation outlook could result in greater certainty for the company's fiscal 2025 earnings outlook, Jarden Research said in a Nov. 20 note.
The mining equipment rental company said it expects operating earnings before interest, tax, depreciation, and amortization (EBITDA) of at least AU$300 million in the fiscal year ending June 30, 2025.
The investment firm believes that the company's less than 1x net debt-to-EBITDA ratio and free cash flow generation could improve over fiscal 2025 to fiscal 2026.
"All else remaining equal, we see greater certainty for the earnings outlook now for FY25E, alongside a strong investment case driven by fundamental value," the investment firm said.
Jarden Research upgraded the company to overweight from neutral and raised its target price to AU$1 from AU$0.85.
Emeco Holdings' shares were up almost 1% in recent Monday trade.
Price (AUD): $0.82, Change: $+0.01, Percent Change: +0.62%
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