Moody’s upgrades Agnico Eagle’s rating to A3 on debt reduction
On Friday, TD Cowen analyst Jared Levine upgraded Dayforce stock, trading on the New York Stock Exchange (NYSE: DAY), from a Hold to a Buy rating, and slightly increased the price target to $68.00 from $67.00. The upgrade comes as the stock has declined nearly 25% year-to-date, with InvestingPro data showing the stock currently trading at $54.67. Levine cited the recent underperformance of Dayforce shares and an underappreciated free cash flow (FCF) margin expansion as the reasons for the upgrade, suggesting these factors present an attractive entry point for investors. According to InvestingPro analysis, the stock appears undervalued compared to its Fair Value.
Levine believes that the drivers behind the stock’s recent underperformance have been overstated in the market. With impressive gross profit margins of 50.71% and strong revenue growth of 16.27% in the last twelve months, he anticipates that Dayforce shares will begin to outperform as investors become more comfortable with the company’s perceived risks, particularly concerning tariffs and the government of Canada opportunity.
Dayforce, which has been experiencing a dip in its stock value, is expected by Levine to exceed medium-term free cash flow expectations. This projection is a key element in his optimistic outlook for the company’s stock performance moving forward.
The analyst’s positive stance on Dayforce is also based on the assessment that the company’s financial health is likely to improve. Levine’s commentary points to an anticipated rise in investor confidence as the company demonstrates its ability to navigate through perceived market risks and capitalize on growth opportunities.
In summary, TD Cowen’s upgrade of Dayforce to a Buy rating, along with a marginal price target increase, reflects a belief in the company’s potential for stock appreciation. This comes after considering recent share performance and the company’s prospects for free cash flow margin growth. With annual revenue of $1.76 billion and operating with a moderate level of debt, the company shows promising fundamentals that support the analyst’s optimistic outlook.
In other recent news, Dayforce, Inc. reported a restructuring plan involving a 5% workforce reduction, aiming for cost savings of approximately $65 million in 2025, with expectations of reaching $80 million on an annualized basis. The company also amended its credit agreement, reducing interest rates on its loans, a move facilitated by JPMorgan Chase (NYSE:JPM) Bank, N.A., which is expected to enhance fiscal sustainability. Dayforce disclosed its 2025 Management Incentive Plan, aligning executive compensation with financial targets, including revenue growth and free cash flow margin, with CEO David D. Ossip receiving a significant equity award valued at over $16 million.
BMO Capital Markets recently adjusted their price target for Dayforce to $83 while maintaining an Outperform rating. Analyst Daniel Jester noted a strong bookings environment but also highlighted potential short-term challenges in recurring revenue. Scotiabank (TSX:BNS)’s Allan Verkhovski lowered the price target to $72, keeping a Sector Perform rating, citing concerns over missed revenue expectations but acknowledging positive free cash flow margin targets. Dayforce’s recent financial activities and analyst evaluations suggest a complex landscape for investors, with both challenges and growth opportunities ahead.
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