Best Smidcap Ideas: Executing on EBITDA/FCF Into a Housing Recovery

Research evidence excerpt

Best Smidcap Ideas: Executing on EBITDA/FCF Into a Housing Recovery

TD Cowen Paper & Forest Products

Global Research

ADENTRA Inc

TD SECURITIES INC. - CANADA BEST SMIDCAP IDEAS 2026

Price: C$33.80 (06/10/2026) Best Smidcap Ideas: Executing on EBITDA/

Price Target: C$42.00 FCF Into a Housing Recovery

BUY (1)

ESG SCORE: 63/100

Kasia Trzaski Kopytek, CFA, CPA, CA^ THE TD COWEN INSIGHT

416 983 4058

ADENTRA is our Best Smidcap Idea. We see a straightforward equity value creation path

kasia.trzaski@tdsecurities.com

through 2027: EBITDA recovery from cyclical lows and FCF-driven deleveraging. There is

Sean Steuart, CFA^ upside to our thesis from disciplined M&A and valuation expansion (neither is embedded in our

416 308 3399 estimates). We are constructive on ADENTRA as a lower-risk way to gain exposure to a gradual

sean.steuart@tdsecurities.com

new housing and repair/remodel recovery.

Key Data

Symbol TSX: ADEN-T Summary Of Our Thesis

12-Month Div (Est.): C$0.65

We view ADENTRA as a straightforward earnings/FCF execution story. Our thesis is based

12-Month Total

26.2%

Return: on expected EBITDA recovery from cyclical lows and FCF-driven deleveraging through 2027.

52-Week Range: C$40.16-C$25.95 Roughly half of our forecasted return to target is driven by a 10% y/y increase in 2027E EBITDA

Market Cap: $594.8MM to $195.5 million, with the balance supported by deleveraging. We forecast incremental FCF of

Net Debt (MM): $599.8 $134 million, or $5.46/share, between Q2/26 and the end of 2027. We view the path to equity

Dil. Shares Out (MM): 24.5 value creation as steady execution, positive free cash flow, and lower leverage, rather than

Float Shares (mm): 24.5 reliance on discrete catalysts.

Float Cap ($mm): C$828

Net Debt/Total Cap: 47 % What Is Underappreciated Or Misunderstood?