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Investing.com - Jefferies downgraded Power Corp of Canada (TSX:POW) (OTC:PWCDF) from Buy to Hold while raising its price target to C$60.00 from C$57.00.
The rating change follows Power Corp’s second-quarter adjusted earnings report, which exceeded Jefferies’ expectations. The company delivered stronger-than-anticipated results from GWO and IGM, along with improved earnings contributions from Sagard and Power Sustainable.
Jefferies noted that the discount to Power Corp’s net asset value (NAV) has significantly narrowed, representing just 0.4% downside potential in a reversion-to-mean scenario.
This limited upside potential appears to be the primary driver behind the downgrade, despite the higher price target reflecting improved performance.
Jefferies’ analysis does factor in a projected 5% increase to Power Corp’s NAV over the next year, but this was insufficient to maintain the previous Buy rating.
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