01-Apr-2021: Canaccord Genuity: Calix Ltd (CXL): Capturing growth optionality
Analysts:
- Seth Hoskin | Analyst | Canaccord Genuity (Australia) Ltd. | shoskin@cgf.com | +61 3 8688 9146
- Aaron Muller | Analyst | Canaccord Genuity (Australia) Ltd. | amuller@cgf.com | +61.3.8688.9103
Capturing growth optionality
Investment Recommendation
CY21 is shaping up to be a transformational year for CXL with i) strong momentum in its US-based water treatment business, coupled with a potential European acquisition, ii) the foundations of commercialisation of its CO2 mitigation vertical in the cement/lime industries beginning to form, and iii) strong early results in other verticals (advanced batteries, sustainable processing, and biotech) which are supportive of accelerating timelines. ESG and decarbonisation are multi-decade structural thematics in their infancy and underpin demand for CXL's technology across multiple industries, which is a unique position on the ASX/globally. Moreover, the wide range of applications highlight significant growth optionality with large multi-billion-dollar TAMs in each vertical. In our view, CXL is developing a track record of execution, and we expect as the company completes targeted milestones, investors will incrementally update risk weightings associated with its pre-commercialisation/R&D projects, which should bring about strong share price momentum. We reiterate our BUY rating and our target price has lifted to $2.60 (prev. $2.50).
1 April 2021: Raising Target Price: Calix Ltd: Sustainability
- Rating: BUY (unchanged)
- Price Target: A$2.60 (up from A$2.50)
- Price: A$2.16 (closed at A$2.28 on 1-Apr-2021)
- 52-Week Range (A$): 0.61 - 2.47
- Avg Daily Vol (M): 0.2
- Market Cap (A$M): 336.6
- Shares Out. (M): 155.9
- Enterprise Value (A$M): 326
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