01:23 PM EDT, 10/07/2024 (MT Newswires) -- National Bank has raised its target on Adentra ( HDIUF ) to $60 on the expectation that the company will continue to outpace market growth by winning share.

However, given the slower near-term environment implied by the guidance cuts at some of Adentra's ( HDIUF ) major customers, National Bank has trimmed its organic growth forecast to -6.4% in the fiscal third quarter (was -1.6%) and temper its fourth quarter estimate -1.7% (was +0.4%). Looking farther ahead, National Bank forecasts ~5% organic growth annually as analyst Zachary Evershed expects the company to outpace market growth by winning share.

Following a surge during the pandemic, Adentra's ( HDIUF ) gross margins have settled in a range above 21%, which the company has maintained despite continued pressure on pricing in recent quarters, Evershed said.

"We reiterate our Outperform rating as we believe ADEN can continue to deliver strong margins and will soon find a floor on pricing; it remains our top pick given the high quality of the business and exposure to the U.S. housing theme coupled with a perplexingly attractive valuation compared to peers," said Evershed.

Target raised to $60 (from $57).

Price: 41.98, Change: -0.34, Percent Change: -0.80