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On Thursday, BMO Capital Markets adjusted its outlook on IGM Financial Inc (TSX:IGM:CN) (OTC: IGIFF), reducing the price target to C$47.00 from the previous C$48.00. Despite the change in price target, the firm maintained a Market Perform rating on the company’s stock. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, with 2 analysts recently revising their earnings expectations downward.
BMO Capital’s analyst cited a combination of factors influencing the decision, including a slight decrease in expected earnings per share (EPS) and adjustments to fee rates. The first quarter of 2025 earnings per share estimate was trimmed by 2% to $1.07, down from $1.09. Furthermore, the full-year 2025 EPS forecast was reduced to $4.43 from $4.50, and the 2026 EPS projection was lowered to $4.76 from $4.80.
The revisions reflect modestly lower advisory fee rates and an increase in asset-based compensation. However, these are partially balanced by an anticipated rise in share buybacks. The new target price reflects these updated estimates, with a $1 decrease to $47. Notably, IGM Financial (OTC:IGIFF) has maintained dividend payments for 40 consecutive years, currently offering an attractive 5.17% yield. InvestingPro subscribers can access additional insights and metrics about the company’s financial strength and growth potential.
IGM Financial’s current trading metrics were also noted, with the stock trading at 10.1 times forward EPS, which is below its five-year average of 10.6 times. The BMO Capital analyst’s comments suggest a cautious stance on the stock’s performance, aligning with the Market Perform rating.
Investors will have the opportunity to assess IGM Financial’s performance when the company reports its first-quarter 2025 results on May 8, after market close. The company enters this earnings season with a strong financial health score of GOOD from InvestingPro, and has delivered an impressive 32.05% return over the past year. A conference call is scheduled for the following morning, May 9, at 8:00 a.m. ET, where further details and insights may be provided. Interested parties can join the call by dialing 1-833-752-3519 or registering online.
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