Parkland Corporation announced its third-quarter profit expectations will be lower than previously forecast.
In a press release on Wednesday, the company pointed to the current macroeconomic environment and volatile product prices for the adjustment.
South of the border, Parkland reported a decline in market prices, which led to losses of approximately $65 million. In Canada, the company navigated falling product prices, which lowered fuel unit margins compared to the previous quarter.
Parkland has forecasted adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in Q3 to be $325 million.
The company’s full-year EBITDA forecast remained unchanged at $1.6 billion to $1.7 billion.
Shares of the energy company sank by 8.36 per cent as of midday trading on Wednesday following the third-quarter update.
The decline in the stock price is a good opportunity to “buy the dip” as the warnings are mostly on one-off challenges, one analyst wrote to clients in a note.
“While Q3 is unfortunate, it’s a blip. Energy and fuel market volatility has been exceptional in 2022, and so not characteristic of usual ups and downs for Parkland,” Ben Isaacson, an analyst at Scotiabank, said.
Isaacson has a 12-month target price of $47 on Parkland shares and maintained his sector outperform recommendation (the equivalent of a buy) on the stock.
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