Extendicare: Hold Rating Amid Strong Operations and Strategic Acquisitions, But Limited Upside Due to Market Preferences

Analyst Tom Callaghan of BMO Capital maintained a Hold rating on Extendicare (EXE – Research Report), boosting the price target to C$14.50.

Tom Callaghan has given his Hold rating due to a combination of factors influencing Extendicare’s current and future performance. The company has shown strong operational results, particularly in its home health segment, and has made strategic acquisitions like Closing the Gap, which are expected to drive growth and earnings accretion into 2026. However, despite these positive developments, the recent financial results fell slightly below expectations, primarily due to cash taxes, which suggests some caution is warranted.
Additionally, while Extendicare benefits from a stable revenue stream through government funding and a strong balance sheet, the current market environment favors companies with exposure to private-pay retirement residences. This preference, combined with the company’s reliance on government-funded revenues, contributes to the Hold rating, as the analyst sees limited upside potential compared to other opportunities in the sector.

Based on the recent corporate insider activity of 28 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of EXE in relation to earlier this year.