On Tuesday, BMO Capital Markets updated its outlook on shares of Power Corp of Canada (POW:CN) (OTC: PWCDF), increasing the price target to C$49.00, up from the previous C$42.00. The firm maintained a Market Perform rating on the stock.
The adjustment reflects a positive view on the company's various business components, including increased targets for Great-West Lifeco (GWO) and IGM Financial (OTC:IGIFF) (IGM), as well as an increased fair value for Wealthsimple.
The analyst highlighted several factors influencing the new price target. There has been a reduction in the third quarter of 2024's estimated adjusted earnings per share (EPS) to C$1.13, down from the prior estimate of C$1.21, which is slightly below the consensus of C$1.15. This decrease is attributed to a lower expected contribution from Groupe Bruxelles Lambert (GBLB), although this is somewhat mitigated by stronger than anticipated third-quarter results from GWO and IGM.
Furthermore, the revised estimates also take into account the share buybacks executed by Power Corp in the third quarter of 2024. The share repurchase activity, along with the updated GWO and IGM earnings estimates, has led to an increase in the forecast for the 2025 adjusted EPS. The new estimate for 2025 adjusted EPS is C$5.47, rising from the previous forecast of C$5.24.
BMO Capital's updated price target and earnings projections are based on the latest available financial data and market trends. The Market Perform rating indicates that the firm expects the stock to perform in line with the broader market or its sector peers over the near term. The new price target suggests a potential upside from the current trading price, based on BMO Capital's analysis.
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