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Investing.com - Morgan Stanley (NYSE:MS) has initiated coverage on Cirsa Enterprises SA (CIRSA:SM) with an Equalweight rating and a price target of EUR17.50.
The research firm highlights Cirsa as a "rare asset" that offers geographically diversified exposure to both Spain and Latin America markets, with potential upside from organic growth capital expenditures, bolt-on acquisitions, and its developing online sector.
Morgan Stanley notes Cirsa’s strong financial performance, pointing to 54 consecutive quarters of growth before the pandemic and 13 consecutive quarters of growth after it, adding that the company’s FY25 guidance appears well supported.
The firm acknowledges that key management has remained in place since 2006/2008, during which time Cirsa has expanded EBITDA margins by more than 2,000 basis points from 2005 to 2024, while maintaining a strong focus on optimization and high-ROI growth capital expenditures.
Morgan Stanley also highlights Cirsa’s growth potential in its fragmented markets, which provide significant opportunities for further consolidation, with particular focus areas including Casinos (with a Latin America bias), Slots Spain (where 97% of operators are sub-scale), and the Online segment, which is described as "growth accretive."
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