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On Thursday, CFRA analyst Catherine Seifert increased the price target for Power Corporation of Canada (POW:CN) (OTC: PWCDF) to Cdn$53.00, up from the previous target of Cdn$50.00. Alongside this adjustment, Seifert maintained a Hold rating on the company’s shares.
Seifert’s revised price target reflects a valuation of 9.7 times the firm’s projected 2026 operating earnings per share (EPS) of Cdn$5.45 and 10.4 times the forecasted 2025 EPS of Cdn$5.10, which was recently raised by Cdn$0.10. This valuation compares to Power Corp’s three-year average forward multiple of 8.7 times and a disparate average of 11 times among its peers.
Power Corp reported a fourth-quarter operating EPS of Cdn$1.28, surpassing Seifert’s estimate of Cdn$1.17 but falling short of the consensus estimate of Cdn$1.39. The results showcased a 15% increase in profits at the company’s core Lifeco unit and a 23% rise at IGM. However, these gains were partially offset by a 31% decline in profits at GBL and operating losses at both Sagard and Power Sustainable.
For the full year of 2024, the company’s EPS reached Cdn$4.58, exceeding Seifert’s estimate of Cdn$4.30 but not meeting the consensus estimate of Cdn$4.63. These figures were driven by similar factors affecting the quarterly results.
In her analysis, Seifert weighed the premium valuation of Power Corp’s shares against their historical averages. Despite some mixed results outside of the Lifeco and IGM segments, she considers the shares to be fairly valued in comparison to historical levels. Seifert also noted the attractiveness of holding the shares given their current yield of 4.5%.
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