STN/FTT-related: Meta announces C$13B data center in Alberta

Research evidence excerpt

STN/FTT-related: Meta announces C$13B data center in Alberta

s in CAD unless otherwise noted.

Priced as of prior trading day's market close, EST (unless otherwise noted). and better connectivity with customers – Finning has

invested in its Digital platform to support two primary

Valuation purposes: 1) to drive increased efficiency across its own

Our $130 price target is based on ~26.0x our blended operations (i.e., improve demand forecasting and Working

2026/2027 Adjusted EPS forecast of $5.01. Our valuation Capital management); and, 2) to better support its customers’

multiple is at a premium to Finning’s 3-year average NTM P/ operations (which in turn should better position Finning

E multiple and at a discount to the company’s closest peer, to capitalize on Product support/New equipment sales

Toromont. We believe our valuation multiple fairly reflects the opportunities). Over time, we expect the increased volume of

operating backdrop in Western Canada and South America, data and the improved insights to help Finning make progress

which includes a supportive commodity price environment on both fronts.

(for WTI and copper) and continued momentum for Product

Support revenue. Our price target supports our Outperform Risks to rating and price target

rating. We note the following key risks for Finning: 1) high degree

of exposure to the business cycle (expenditures for capital

goods/industrial equipment and services have historically

been cyclical). 2) Oil and copper price volatility impacts

Finning’s results. 3) High degree of competitive intensity,

particularly during commodity downturns. 4) 90 days’ notice

period for contract termination (the principal agreements

common to arrangements as an authorized Caterpillar dealer

can be terminated on 90 days’ notice).