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On Monday, BMO Capital Markets adjusted its outlook for IGM Financial Inc (TSX:IGM:CN) (OTC:IGIFF), as analyst Tom MacKinnon revised the company’s price target to Cdn$46.00, down from the previous Cdn$47.00. Despite the change, the firm maintained its Market Perform rating on the stock.
The adjustment follows IGM Financial’s first-quarter earnings for 2025, which fell short of expectations. The company reported an adjusted earnings per share (EPS) of Cdn$1.00, which showed a year-over-year increase of 6%. However, this figure did not meet the anticipated Cdn$1.07 by BMO Capital or the consensus estimate of Cdn$1.03. The lower-than-expected earnings were attributed to a decline in net asset management fees and a slight decrease in advisory and program fees. The company also faced higher operational expenses than anticipated, which was largely attributed to seasonal factors, even as IGM reiterated its 4% guidance for 2025. Additionally, other financial planning revenue was reported to be lower.
IGM Financial also experienced a shift in investor behavior, with modestly positive fund flows in the first quarter of 2025 turning negative in April. In response to these developments, BMO Capital reduced its adjusted EPS estimates for IGM Financial by 4%.
The analyst’s commentary emphasized the reasons behind the lowered estimates and price target, noting the impact of reduced net asset management fee rates and the subsequent adjustment of the target price. Despite the downward revision, BMO Capital chose to maintain a Market Perform rating, citing an uncertain outlook for market conditions and fund flows moving forward.
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