What changed
$SCI — BUY 📊
Service Corporation International provides deathcare products and services in the United States and Canada.
🎯 Q1 FY26 | Rev $1B | EPS $0.97 vs $1.00 🔴
💡 The market is pricing a persistent margin squeeze, but we see stabilization: normalized EPS of $4.10+ favors a re-rating toward the historical multiple of ~21x, versus the current 18.1x on depressed estimates. Revenue growth from pre-need sales and pricing power is underestimated.
📉 Reward/Risk: 2.6:1
🏢 Business Quality: 8/10 - High barriers (regulation, local scale), recurring need-based demand, strong pricing power, and cash flow generation, though growth is limited to low single digits.
📊 Valuation: cheap — relative to its own 5-year average P/E of 21x (current 18.1x on TTM EPS) and peer EV/EBITDA of 14x (SCI ~12x), with a FCF yield of 5.5%...
📊 Our read: BUY. Full analysis →
https://stockduty.xyz/s/SCI0621