Original-Research: Zefiro Methane Corp. (von GBC AG): BUY

Original-Research: Zefiro Methane Corp. - from GBC AG



13.10.2026 / 10:30 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
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result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.



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Classification of GBC AG to Zefiro Methane Corp.



     Company Name:                Zefiro Methane Corp.
     ISIN:                        CA98926D1069



     Reason for the research:     Research Report (Update)
     Recommendation:              BUY
     Target price:                1.50 USD
     Target price on sight of:    30.06.2027
     Last rating change:
     Analyst:                     Cosmin Filker, Matthias Greiffenberger



Strong growth expected on the basis of an extensive pipeline



Zefiro Methane Corp. is a listed environmental services company with its
operational focus in the USA. The company specialises in the identification,
measurement and reduction of methane emissions from decommissioned and
abandoned oil and gas wells. Its operational activities primarily comprise
the decommissioning and remediation of wells, as well as complementary
technical services. Furthermore, the company aims to tap into additional
revenue potential through the marketing of carbon credits. The operational
platform is provided by the subsidiary Plants & Goodwin (P&G), whose
capabilities were recently expanded through the acquisition of equipment
from Viking Well Service.



In the past FY 2025/26 (end of FY: 30 June), Zefiro Methane increased its
revenue by 31.1% to USD 42.49 million (previous year: USD 32.41 million).
The increase in revenue, which was predominantly organic, resulted in
particular from the expansion of well-plugging activities. Significant
contributions to revenue came from government-funded remediation projects in
Ohio and Louisiana, as well as additional contracts from private-sector
clients. However, revenue performance fell short of our previous
expectations of USD 45.18 million. In the fourth quarter in particular,
seasonal factors, as well as start-up and integration effects relating to
the expansion of operational capacity, had an impact.



In parallel with the rise in revenue, Zefiro achieved a significant
improvement in earnings. EBITDA, as calculated by us, rose to USD 0.60
million (previous year: USD -4.75 million), marking the achievement of an
operational turnaround. In addition to higher utilisation of existing
capacity, the cost-cutting measures implemented by the new management
contributed to the improvement in earnings. The gross margin rose to 29.2
per cent (previous year: 23.0 per cent). EBIT improved to USD -2.75 million
(previous year: USD -8.53 million), whilst the result after tax remained
negative at USD -3.55 million (previous year: USD -10.76 million).



According to the company, our growth expectations are based on the largest
contractually secured project pipeline in the company's history. Of
particular note is the three-year contract with the Ohio Department of
Natural Resources, with a total value of USD 19.60 million, for the
decommissioning of around 200 boreholes. Furthermore, in September 2026, a
further government-funded contract worth USD 11.50 million was secured.
Additional growth potential stems from the partnership with the Well Done
Foundation, which initially involves the decommissioning of ten boreholes
and could be expanded to around 70 boreholes in the future.



In addition to the implementation of these projects, we expect further
growth momentum from the increasing utilisation of the Viking capacities
acquired in May 2026. According to the company, the five additional service
rigs will increase annual revenue capacity by around USD 10 million. The
expansion of the private client business and geographical expansion should
also support further business development. In the medium term, the
resumption of the carbon credit business could also generate additional
revenue.



Against this backdrop, we confirm our previous revenue forecasts and expect
revenue to rise to USD 57.92 million for the current financial year 2026/27,
with EBITDA of USD 10.02 million. For the financial years 2027/28 and
2028/29, we forecast revenue of USD 66.85 million and USD 75.21 million
respectively. Owing to an expected improvement in capacity utilisation and a
more favourable cost structure, we anticipate a disproportionately high
increase in earnings. By the 2028/29 financial year, EBITDA is expected to
rise to USD 15.04 million and the EBITDA margin to 20.0 per cent.



Based on our updated DCF valuation model, we confirm our previous price
target of USD 1.50 per share (CAD 2.15). In view of the resulting high
upside potential, we maintain our BUY rating.





You can download the research here:
https://nwr.eqs-cockpit.com/fncls2.ssx?fn=redirect&u=9485ae67bd59c05c97f72b552cf02104



Contact for questions:
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Disclosure of potential conflicts of interest pursuant to Section 85 of the
German Securities Trading Act (WpHG) and Article 20 of the Market Abuse
Regulation (MAR) The following potential conflict of interest exists in
relation to the company analysed above: (5a,11); A list of potential
conflicts of interest can be found at: https://www.gbc-ag.de/de/Offenlegung



Note on issuer-sponsored research: This research report is issuer-sponsored
research and has been prepared in accordance with the EU Code of Conduct for
issuer-sponsored research.
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Completion: 12/10/2026 (4:15 pm)
First distribution: 13/10/2026 (10:30 am)



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2414762 13.10.2026 CET/CEST