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On Thursday, BMO Capital Markets adjusted its outlook on iA Financial Group (IAG:CN) (OTC: IDLLF), increasing the price target to Cdn$150.00, up from the previous Cdn$140.00, while reiterating an Outperform rating for the company’s stock. The revision follows iA Financial Group’s strong performance in the fourth quarter of 2024, which surpassed analyst expectations.
The firm’s analyst, Tom MacKinnon, noted the company’s consistent delivery of solid growth and profitability, which warranted an upward revision of estimates and the target price. The new target is based on a multiple of 1.85 times the estimated Book Value Per Share (BVPS) for the first quarter of 2026 and 11 times the projected core earnings per share (EPS) for 2026. The previous price target was set using a multiple of 1.75 times the fourth quarter of 2025 estimated BVPS and 10.5 times the 2026 estimated core EPS.
iA Financial Group’s core EPS for the fourth quarter of 2024 reached Cdn$3.04, outperforming MacKinnon’s as well as the consensus estimates, which were Cdn$2.73 and Cdn$2.80, respectively. Although the reported EPS came in weaker, this was compensated by a stronger than anticipated BVPS. The company’s capital and capital generation were reported to be consistent with expectations.
The analyst highlighted iA Financial Group’s two-year core EPS compound annual growth rate (CAGR) from 2022 to 2024 at 10%, which aligns with the company’s medium-term target of 10% or higher. Additionally, the core return on equity (ROE) for 2024 was 15.9%, meeting the company’s target of over 15%.
This price target adjustment reflects BMO Capital Markets’ confidence in iA Financial Group’s ability to maintain its growth trajectory and profitability, as evidenced by the company’s recent financial results and consistent achievement of its medium-term financial objectives.
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