Stifel Raises Price Target#
Stifel has increased its price target for Custom Truck One Source (NYSE: CTOS) from $8.00 to $11.00 while maintaining a Buy rating. Currently, the stock is trading at $9.05, showing an impressive 113% increase over the past year and a 56% rise so far this year.
Strong Financial Performance#
The firm highlighted that Custom Truck One Source's first-quarter results for 2026 exceeded expectations, primarily due to strong performance in the transmission and distribution markets. Utilization rates and costs for original equipment rentals were both higher than in the previous quarter, indicating a positive trend heading into the second quarter.
Positive Demand Outlook#
Custom Truck One Source reported that bidding activity is supporting a favorable demand outlook extending into 2027, especially in the transmission sector. Although the backlog for its equipment business saw a 2% year-over-year decline, the rate of decline has slowed, and orders have increased by 13% year-over-year.
Updated Guidance and Future Prospects#
The company has slightly raised its adjusted EBITDA guidance for 2026 while keeping revenue projections unchanged. Stifel noted that inventory reductions have positioned the company to generate free cash flow and lower its debt levels. Despite posting a loss of $0.08 per share over the last twelve months, analysts believe that profitability is expected this year. Recent financial results showed a loss per share of $0.02, which was better than the anticipated loss of $0.06, with revenue reaching $462 million, exceeding projections and reflecting a 9% increase from the previous year. This strong performance has created a positive sentiment among investors.