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RBC Capital initiated coverage of Power Corp of Canada (TSX:POW) (OTC:PWCDF) with an outperform rating and a price target of C$57.00 on Wednesday.
The financial services holding company has simplified its organizational structure over the past five years, according to RBC Capital, which noted Power Corp has completed C$3.6 billion in asset monetizations since 2019 to streamline its equity story.
RBC Capital believes the company’s current discount to net asset value is too wide given the business repositioning at its Great-West Lifeco, IGM Financial (OTC:IGIFF), and Groupe Bruxelles Lambert units, which the firm says now have "respectable growth outlooks."
The investment firm highlighted Power Corp’s growing alternatives platform as providing "upside optionality" and expects further value-enhancing transactions over time.
Power Corp offers a 4.7% dividend yield, and RBC Capital sees potential valuation upside driven by net asset value growth, narrowing of the NAV discount, and the company’s dividend payments.
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