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Investing.com - Canaccord Genuity upgraded OFX Group Ltd (ASX:OFX) from Hold to Buy and raised its price target to AUD1.10 from AUD1.00, citing improved business momentum despite recent stock selloff.
The stock had previously declined 35% following the company’s FY25 results, primarily due to a significant one-off increase in operating expenses of over $24 million and capital expenditure of over $5 million expected in FY26, along with negative net operating income growth heading into FY26.
Canaccord Genuity noted positive momentum in the first quarter of FY26, improved New Client Platform (NCP) metrics and rollout, and the recommencement of debt repayment and share buybacks as indicators of improving business conditions.
The research firm maintained its net operating income forecasts while increasing its FY26 EBITDA estimates by 5%, reflecting greater confidence in the unit economics from the NCP rollout.
Canaccord Genuity’s price target increase is based on a discounted cash flow model, with the firm expressing "increasing confidence in the positive unit economics driven by the NCP rollout."
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