Friday - Truist Securities has raised the stock price target on Service Corp. Intl. (NYSE:SCI) to $84 from $80, while keeping a Buy rating on the stock. The adjustment comes after a series of meetings with the company's CFO, Eric Tanzenberg, which left the firm with a positive outlook on the company's prospects.
The firm's analyst visited Service Corp. Intl.'s headquarters in Houston last week and held client meetings in Boston this week. The insights from these encounters have led to an increased confidence in the company's future performance.
Truist Securities anticipates a year-over-year growth in volume as the year 2024 progresses, with estimates of a 2.5% decrease in the second quarter, a 1.1% decrease in the third quarter, and a 0.2% increase in the fourth quarter.
Moreover, the firm highlighted the strong demand from Service Corp. Intl.'s mid-to-high-end consumer base. The analyst pointed out the company's robust acquisition pipeline as a positive factor. There is also an expectation of margin expansion, bolstered by the normalization of cemetery maintenance expenses.
Truist Securities' new stock price target of $84 is based on a 12.3x enterprise value to estimated 2025 EBITDA, compared to the 10-year average of 11.4x. This revised price target reflects a more bullish stance on the company's financial outlook and market performance. The firm's ongoing endorsement of a Buy rating suggests that they continue to see Service Corp. Intl. as a favorable investment.
In other recent news, Service Corp. International reported a slight decline in its Q1 2024 adjusted earnings per share (EPS), dropping to $0.89, a $0.04 decrease from the previous year. Despite this, the company saw an increase in pre-need cemetery sales and maintained its annual EPS guidance. Moreover, Service Corp. returned $93 million to shareholders, signaling confidence in its financial performance.
In addition, BofA Securities maintained its Buy rating for Service Corp., citing strong visitation growth and solid overall trends. UBS also raised its target price for Service Corp. shares from $83 to $85, maintaining a Buy rating, following the company's reaffirmation of its annual EPS growth goal of 8-12%.
In other developments, Service Corp. declared a quarterly cash dividend of thirty cents per share, scheduled for payment later this year. The company's board will continue to assess the financial health each quarter before declaring future dividends. These are the recent developments for Service Corp. International.
InvestingPro Insights
Following Truist Securities' optimistic outlook on Service Corp. Intl. (NYSE:SCI), key metrics from InvestingPro paint a detailed picture of the company's financial landscape.
With a market capitalization of $10.49 billion and a trailing P/E ratio of 20.27, SCI is recognized for its consistent shareholder returns, having raised its dividend for 20 consecutive years. This commitment to dividends, coupled with a 1.67% dividend yield as of the last twelve months up to Q1 2024, underscores the company's financial stability and appeal to income-focused investors.
An InvestingPro Tip worth noting is that analysts predict Service Corp. Intl. will remain profitable this year, a sentiment echoed by the firm's positive earnings over the last twelve months. Additionally, the company has shown a solid performance with an 11.56% one-year price total return, indicating a healthy long-term growth trajectory.
For investors seeking further insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/SCI, including perspectives on earnings revisions and valuation multiples. Using the coupon code PRONEWS24, readers can obtain an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to an expanded array of professional investment tips and data.
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