Why Superior Plus Remains a Buy Despite Near-Term EBITDA Softness

Superior Plus Corp. (SPC) has faced a familiar challenge in the second quarter of 2025: a temporary dip in EBITDA. While the results fell short of expectations, this near-term softness obscures a far more compelling narrative of strategic resilience and long-term value creation. For investors seeking exposure to the evolving energy landscape, the company's disciplined execution, Certarus's robust performance, and Stifel Canada's $12 price target collectively paint a compelling case for a “buy” rating.

Navigating EBITDA Headwinds with Operational Discipline

The Q2 2025 earnings report highlighted seasonal and operational challenges, including a California plant shutdown that disrupted supply chains. However, these issues are largely temporary. The Certarus division, a cornerstone of Superior Plus's energy transition strategy, delivered a 5% EBITDA growth in the first half of 2025, underscoring its resilience. This performance is not an anomaly but a reflection of Certarus's unique value proposition: mobile energy solutions that bridge infrastructure gaps in remote and industrial markets.

Superior Plus's “Superior Delivers” transformation program has further insulated the business from volatility. By optimizing logistics and pricing positioning, the company is primed to capitalize on seasonal demand spikes in the propane market, particularly during the winter months. Analysts project that these improvements will drive a meaningful EBITDA rebound by late 2025, reinforcing the view that the current dip is a buying opportunity rather than a red flag.

Certarus: A Catalyst for Long-Term Growth

The 2023 acquisition of Certarus for $1.05 billion has proven to be a masterstroke. Certarus's mobile storage units (MSUs) now number 640, making it the largest on-road low-carbon fuel distributor in North America. Its business model—passing commodity price changes directly to customers—ensures pricing transparency and competitiveness, even in volatile markets. Between 2020 and 2022, Certarus's Adjusted EBITDA more than doubled to $124 million, driven by a 76% increase in low-carbon fuel volume delivered.

This growth is not just financial but strategic. Certarus's offerings—compressed natural gas (CNG), renewable natural gas (RNG), and hydrogen (H2)—align with global decarbonization goals. For instance, RNG can reduce emissions by up to 90% compared to diesel, making it a critical tool for industries under pressure to meet ESG targets. By integrating Certarus into its vast distribution network (serving 890,000 customer locations), Superior Plus has created a scalable platform to address the energy transition's most pressing challenges.

Stifel Canada's $12 Price Target: A Vote of Confidence

Stifel Canada's $12 price target reflects a nuanced understanding of Superior Plus's adaptive business model. While the company's Q2 EBITDA shortfall is a near-term concern, the analyst firm emphasizes the company's ability to execute its long-term vision. The Certarus acquisition, for example, is expected to be double-digit accretive to Distributable Cash Flow (DCF) per share in 2023, with a pro forma leverage ratio of 3.8x—well within the company's target range.

Moreover, the acquisition's financial rationale is robust. Priced at 8.5x 2022E EBITDA, the deal offers a clear path to value creation. Stifel notes that Superior Plus's “Superior Way Forward” initiatives are now on track to achieve $700 million to $750 million in EBITDA by 2024, two years ahead of schedule. This acceleration underscores management's ability to integrate high-growth assets and drive operational efficiency.

Strategic Resilience in a Shifting Energy Landscape

The energy transition is not a passing trend but a structural shift. Superior Plus's dual focus on propane markets and clean energy solutions positions it to thrive in both. The propane business, often overlooked, remains a stable cash flow generator, while Certarus's mobile energy solutions open doors to high-growth industrial and remote markets.

For investors, the key takeaway is clear: Superior Plus is not merely weathering the storm but leveraging it. The company's disciplined cost management, strategic acquisitions, and alignment with decarbonization trends create a durable competitive advantage. Stifel Canada's $12 price target, which implies a 25% upside from current levels, is a testament to this resilience.

Investment Thesis

Superior Plus's near-term EBITDA softness is a temporary blip in a story of long-term transformation. With Certarus driving growth in low-carbon fuels and management executing its strategic vision with precision, the company is well-positioned to outperform in a transitioning energy landscape. For investors with a 12- to 18-month horizon, the current valuation offers an attractive entry point to capitalize on both the propane market's seasonal tailwinds and the energy transition's structural opportunities.

In a market increasingly focused on sustainability and operational agility, Superior Plus stands out as a rare combination of resilience and innovation. The $12 price target is not just a number—it's a signal that the company's strategic bets are paying off. For those willing to look beyond quarterly fluctuations, the rewards could be substantial.