Crispr Therapeutics shares tumble after significant earnings miss
Scotiabank (TSX:BNS) assumed coverage of MTY Food Group Inc. (TSX:MTY) (OTC:MTYFF) with a Sector Perform rating and a price target of C$45.00, according to a research note released Wednesday.
The Canadian restaurant franchisor, which operates brands including Cold Stone Creamery, Papa Murphy’s, and Thai Express, was noted for its "strong cash flow generation" which Scotiabank believes should merit a higher multiple than the company currently receives from investors.
Scotiabank identified several factors that have historically driven higher valuations for MTY, including favorable merger and acquisition conditions, better organic growth prospects, and a more constructive consumer spending environment.
The investment bank indicated these positive catalysts appear "unlikely to occur in the next year," creating a challenging outlook for MTY’s valuation in the near term.
Scotiabank suggested MTY "may continue to face a heavy discount to peers" until one of these favorable factors emerges or unless the company becomes an acquisition target itself.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.