Earlier today, Neighbourly Pharmacy (TSE: NBLY) announced that it will be acquiring eight pharmacies for a total of C$15.5 million. This will bring its total number of pharmacies across Canada to 284 when the transaction closes (expected next month). Two of the acquired pharmacies are in British Columbia, while the other six are in New Brunswick and Nova Scotia. The acquisitions are expected to contribute C$2.7 million to the company’s Adjusted EBITDA figure on an annual basis, implying a 5.7x EBITDA purchase multiple, and they are predicted to be instantly accretive.
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Cash on hand and debt from Neighbourly’s credit facility will be used to fund the transaction. Considering that NBLY’s pro-forma Adjusted EBITDA was C$95.5 million for the 52 weeks ended Q1 2023, the acquisition will add about 2.8% to that figure.
Is NBLY Stock a Buy, According to Analysts?
Analysts are cautiously optimistic about NBLY stock, giving it a Moderate Buy consensus rating based on three Buys and three Holds assigned in the past three months. The average NBLY stock price target of C$26.67 implies 27.7% upside potential.
Conclusion: NBLY Stock is Worth Watching
Neighbourly Pharmacy is continuing its strategy of acquiring pharmacies across Canada at low valuation multiples. As the acquisition is expected to be accretive, it should create value for shareholders. Combined with the upside potential expected from analysts, NBLY is a stock worth watching.
