MTL: Future Acquisitions And Higher P/E Expectations May Shape Balanced Outlook

Analysts have raised their price targets on Mullen Group, and our fair value estimate has increased from C$16.50 to C$17.40, supported by recent target increases from several firms and updated assumptions on the discount rate and future P/E multiples.

Analyst Commentary

Bullish Takeaways

Bullish analysts have lifted price targets into a C$17 to C$20 range, which lines up with a view that the shares can support a higher valuation multiple than previously assumed.
The move from mid C$15 targets to C$17 and C$20 suggests increased confidence that Mullen Group can execute on its current plan without major disruption to earnings.
Higher targets that sit above our C$17.40 fair value indicate optimism around upside to current assumptions on future P/E levels.
The presence of Buy and Outperform ratings alongside these higher targets signals that some analysts see the current share price as not fully reflecting their expected long term value.

Bearish Takeaways

One firm maintaining a Neutral stance, even with a higher C$17 target, shows there is still caution on how much upside is left versus perceived risks.
The clustering of targets around C$17 implies that, for some bearish analysts, much of the value may already be captured if the share price trades close to that level.
Differences between C$17 and C$20 targets highlight uncertainty around the durability of earnings and what P/E multiple is sustainable over time.
Retention of more cautious ratings alongside higher targets suggests some analysts remain concerned about execution risk and potential pressure on valuation if assumptions do not play out as expected.

What's in the News

TD Securities lifted its price target on Mullen Group to C$20 from C$19 and reiterated a Buy rating on the shares (periodical).
Mullen Group is actively looking for acquisitions, with management highlighting a focus on entering new verticals and using record cash from operations and a strong balance sheet to fund deals that meet its investment criteria (Key Developments).
Management indicated that the senior executive team is focused on where to deploy capital for future acquisitions, with an aim to be larger and present in more verticals for customers over time (Key Developments).
The company reported that from July 1, 2025 to September 30, 2025, it repurchased 0 shares for C$0m under a buyback program announced on March 7, 2025, and stated that this completes the repurchase under that authorization (Key Developments).

Valuation Changes

Fair Value: our estimate has risen slightly from C$16.50 to C$17.40, reflecting updated model inputs.
Discount Rate: the assumed rate has fallen moderately from 9.10% to about 8.52%, which lifts the present value of projected cash flows.
Revenue Growth: the forecast has been reduced meaningfully from roughly 7.65% to about 3.59%, implying a more measured top line outlook.
Net Profit Margin: the margin assumption has inched up from about 5.16% to roughly 5.17%, a very small adjustment.
Future P/E: the target P/E multiple has risen from about 13.83x to around 15.48x, indicating a higher assumed valuation level on future earnings.

Strategic acquisitions and a shift toward asset-light logistics set the stage for sustainable revenue growth and improved profitability through integration and efficiency gains.
Industry trends like e-commerce, supply chain reshoring, and infrastructure projects position the company to capture increasing freight volumes and secure long-term contracts.
Overreliance on acquisitions and exposure to volatile end-markets amid ongoing pricing and cost pressures threaten sustainable margin growth and profitability.

Catalysts

About Mullen Group

Provides a range of trucking and logistics services in Canada and the United States.What are the underlying business or industry changes driving this perspective?

Recent large acquisitions (notably Cole Group) are driving significant incremental revenue growth, and management expects these deals-especially as full-year contributions are realized-to push consolidated revenue meaningfully higher, setting up for further top-line growth as trade normalization and cross-border complexity drive more demand for third-party logistics and customs expertise.
Positive industry dynamics such as the rise of e-commerce, resilient domestic/regional freight demand, and the expansion of North American trade due to supply chain reshoring and energy transition projects position Mullen Group to benefit from a persisting secular increase in volumes and logistics complexity, supporting long-term revenue and contract wins.
Ongoing shift in revenue mix toward higher-margin, asset-light logistics and warehousing services through targeted acquisitions and strategic capital allocation is expected to structurally lift net margins and boost cash conversion, especially as recently acquired units are integrated and cost synergies realized.
Mullen's long-term investments in technology (routing, real-time tracking, automation) are set to enhance operational efficiency and asset utilization, positioning the company to improve EBITDA margins and reduce SG&A even as wage inflation and regulatory burden rise across the trucking sector.
Anticipated government-funded 'nation-building' infrastructure and energy projects (pipeline, rail, mining), combined with stronger supply chain resiliency requirements post-pandemic, are likely to drive a cyclical rebound in high-margin industrial freight and specialized services, acting as a catalyst for accelerated earnings growth as delayed capital investment returns.

Mullen Group Earnings and Revenue Growth

Mullen Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Mullen Group's revenue will grow by 7.6% annually over the next 3 years.
Analysts assume that profit margins will increase from 4.9% today to 5.2% in 3 years time.
Analysts expect earnings to reach CA$133.2 million (and earnings per share of CA$1.44) by about September 2028, up from CA$100.5 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 13.8x on those 2028 earnings, up from 11.9x today. This future PE is lower than the current PE for the CA Transportation industry at 19.9x.
Analysts expect the number of shares outstanding to decline by 0.42% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.1%, as per the Simply Wall St company report.

Mullen Group Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company has flagged persistent pricing pressure and a lack of pricing leverage in its core markets due to ultra-competitive conditions; this prolonged inability to raise prices, combined with stagnant demand, could lead to prolonged net margin compression and weaker EBITDA growth.
Heavy reliance on acquisitions for recent and near-term revenue growth, rather than organic expansion, raises the risk that future top-line gains may be unsustainable or come at the expense of lower operating margins, especially as newly acquired, asset-light units dilute overall profitability.
Exposure to cyclical end-markets such as oil & gas, mining, and large capital projects makes a significant portion of Mullen's higher-margin business dependent on the unpredictable timing of major nation-building projects and commodity cycles; delays or cancellations could negatively impact revenue and margins.
Ongoing cost inflation (wages, compliance, competitive pressures) is not being fully offset by rate increases, and any further escalation in labor costs, insurance, or regulatory burdens could lead to persistent SG&A ratio increases and reduced net income.
Rising regulatory, trade, and political risks-including unresolved labor law enforcement (Driver Inc.), unpredictable tariff and trade policies, government intervention in key markets, and more assertive competition oversight-could structurally challenge Mullen's market position, increase compliance costs, and disrupt revenue streams.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of CA$16.5 for Mullen Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$19.0, and the most bearish reporting a price target of just CA$14.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be CA$2.6 billion, earnings will come to CA$133.2 million, and it would be trading on a PE ratio of 13.8x, assuming you use a discount rate of 9.1%.
Given the current share price of CA$13.65, the analyst price target of CA$16.5 is 17.3% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

North American Trade And E-Commerce Will Transform Logistics