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Investing.com - National Bank Financial downgraded Telus (NYSE:TU) International (NYSE:TIXT) from Outperform to Sector Perform while raising its price target to $4.00 from $3.50. The company, with a market capitalization of $1.1 billion, has seen its stock surge nearly 7% in the past week, though InvestingPro data indicates the stock is currently in overbought territory.
The downgrade comes as Telus International shares currently trade around $4.00, suggesting limited upside potential from current levels according to the research firm.
National Bank Financial cited "growing expectations for a potential takeout offer above the initial IOI of US$3.40" as a key factor in its rating change.
The revised $4.00 price target implies an enterprise value to EBITDA (excluding stock-based compensation) multiple of 6.1x based on the firm’s fiscal year 2025 estimates, up from the previous 5.8x multiple.
Telus International, which provides digital customer experience solutions, had previously carried an Outperform rating from National Bank Financial before Monday’s downgrade.
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