WillScot A Clear Consolidator In Fragmented Market; Oppenheimer Initiates At Outperform

WillScot Corporation WSC, a provider of modular space and modular storage solutions, is now significantly improved and a leader in the North American modular office specialty rental market, an analyst said.

The Analyst

Oppenheimer analyst Scott Schneeberger initiated coverage of WillScot with an Outperform rating and a 12-18 month price target of $15.

The Thesis

WillScot will benefit from a non-residential construction tailwind as well as favorable macro drivers, and the potential for a U.S. infrastructure bill, Schneeberger said in a note.

As the company leverages its national size/scale, and efficient operating model, while garnering incremental margin through its differentiated add-on services, it's likely to outpace industry growth, the analyst said.

Given WillScot's competitive leadership, the analyst said it's well positioned to derive significant M&A synergies, as the clear consolidator in a fragmented market.

Oppenheimer estimates mid-single-digit-plus and mid-teens organic revenue and adjusted EBITDA growth, respectively, over the coming two years. Two recently closed acquisitions could drive total year-over-year revenue and adjusted EBITDA growth in 2018, the firm said.

"We view additional M&A probable, which could further increase topline growth and expand margins via synergies," the firm added.

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