ARKO Petroleum Corp (APC) PT Raised to $22 at Mizuho

Mizuho analyst Gabriel Moreen raised the price target on ARKO Petroleum Corp (NASDAQ: APC) to $22.00 (from $20.00) while maintaining a Neutral rating.

The analyst commented: "We reiterate our Neutral on APC and await more on APC's growth strategies - but raise our PT to $22/sh on higher estimates and peer multiples. We like the business as about 85% of gallons run on cost-plus terms that shield margins from price swings, with the supplier prompt-pay discount adding a modest margin kicker when prices climb. The growth story is credible too, as dealerization (fuller explanation in our APC initiation) shifts volumes into higher-margin third-party wholesale channels, the cardlock build-out adds capital-efficient diesel-oriented cash flows, and potential bolt-on M&A brings scale supported by a conservative ~2x balance sheet. Products' demand has held up well despite higher pump prices, although a dramatic increase in products pricing remains a risk. On the upcoming earnings call, we expect additional dealerization conversions, an update on the pace of the cardlock build-out, and reads on M&A progress and overall fuel demand trends."

You May Also Be Interested In

• Golar LNG Ltd. (GLNG) PT Raised to $70 at BTIG
• Boston Omaha Corporation (BOC) Misses Q2 EPS by 2c
• Legence Corp (LGN) PT Lowered to $100 at BTIG