Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - RBC Capital downgraded Power Corp of Canada (TSX:POW) (OTC:PWCDF) from Outperform to Sector Perform while raising its price target to C$58.00 from C$57.00.
The downgrade comes after Power Corp shares outperformed the broader market, generating approximately 600 basis points of alpha relative to both the S&P TSX and S&P TSX Capped Financial indices.
RBC Capital cited valuation as the primary reason for the downgrade, noting that the company’s net asset value discount has narrowed to what the firm considers a justified level of 15%.
Despite the downgrade, RBC Capital acknowledged Power Corp’s strong capital return profile, which includes a 4.3% dividend yield - the lowest since the third quarter of 2021 - and ongoing share repurchases, with 5 million shares bought back year-to-date.
The investment bank also highlighted that Power Corp maintains multiple growth levers, specifically mentioning its Sagard alternative asset management platform.
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