Concerns Over Southland's Zero Margin Backlog & Rising Debt: Analyst Downgrades Stock
Portfolio Pulse from Lekha Gupta
DA Davidson analyst Brent Thielman has downgraded Southland Holdings Inc (AMEX:SLND) to Neutral from Buy and lowered the price target to $7 from $12. This follows weaker-than-expected Q2 FY23 results, a backlog of $500 million at zero margin, and a significant increase in debt/EBITDA leverage ratios. Thielman has also reduced the EBITDA estimate for FY23 and FY24.
August 16, 2023 | 6:19 pm
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Southland Holdings has been downgraded due to weak Q2 results, a large zero margin backlog, and increasing debt. The price target has been lowered to $7.
The downgrade by DA Davidson is based on several negative factors including weaker than expected Q2 results, a large backlog at zero margin, and increasing debt. These factors are likely to negatively impact the company's financial performance and investor sentiment, leading to a potential decrease in the stock price.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100