Stifel has increased its price target for Target Hospitality to $26 from $23, citing a substantial upward revision to the company's adjusted EBITDA projections for 2026 through 2028.
The firm now forecasts 2026 adjusted EBITDA at $108.2 million, up from a prior estimate of $83.8 million, while 2027 and 2028 EBITDA estimates have been raised to $247.6 million and $303.6 million, respectively. Target Hospitality reported trailing twelve-month EBITDA of $44.57 million as of the latest data.
The stock, which closed at $16.78 on August 26, trades at a 55% discount to Stifel's new target. Morgan Stanley maintains a $22 price target and an overweight rating. Year-to-date, the shares have gained 109%, outpacing broader market benchmarks.
Target Hospitality's revenue for the second quarter of 2026 reached $85.46 million, exceeding Wall Street's consensus estimate of $79.30 million. The company's workforce hospitality segment revenue surged 142% year-over-year to approximately $36 million. However, adjusted earnings per share for the quarter came in at a loss of $0.09, wider than the expected loss of $0.07.
Stifel also highlighted a growing contract backlog, with more than 9,000 beds contracted since January under multi-year agreements totaling over $1.4 billion. The company's opportunity pipeline stands at 20,000 beds. A new multi-year contract for a major data center project in West Texas is expected to generate roughly $250 million in revenue, with initial occupancy scheduled for the third quarter of 2026.
Analysts project 2026 revenue growth of 30% for Target Hospitality, reflecting strong demand in its niche lodging and hospitality solutions segment.
