Analyst Michael Goldie from BMO Capital maintained a Hold rating on Exchange Income and increased the price target to C$65.50 from C$59.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Michael Goldie has given his Hold rating due to a combination of factors impacting Exchange Income’s current and future performance. The company’s recent acquisition of Canadian North has led to a revision in EBITDA guidance, reflecting a 5% increase, which is promising for future growth. However, despite these positive developments, Goldie remains cautious about the stock’s valuation, noting that shares are trading at record P/E levels, especially when considering the cost of financing.
Furthermore, while the company’s aviation segment shows strong momentum, with improved medivac yields and firefighting activities, the manufacturing segment presents a mixed outlook. Although there is strength in U.S. matting, the Canadian market is softer, and tariffs have offset productivity gains. Additionally, the reliance on equity financing and a limited spread between ROIC and WACC suggest that per-share economic value creation may be constrained. These factors collectively contribute to the Hold rating, as the potential for growth is balanced by concerns over valuation and economic returns.
Based on the recent corporate insider activity of 20 insiders, corporate insider sentiment is neutral on the stock.