BMO Capital analyst Tom Callaghan upgraded the rating on Extendicare to a Buy yesterday, setting a price target of C$24.00.
Claim 50% Off TipRanks Premium and Invest with Confidence
- Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential
Tom Callaghan has given his Buy rating due to a combination of factors that highlight Extendicare’s strategic positioning and growth potential. The recent acquisition of CBI Home Health is a key driver, as it significantly enhances Extendicare’s presence in the home health sector, which is expected to benefit from favorable demographic trends and increasing demand. This acquisition not only expands the company’s geographic reach across Canada but also shifts its business model towards more service-based and capital-light operations.
Additionally, the financial aspects of the deal are compelling, with the acquisition cost appearing reasonable and the transaction expected to be accretive to future earnings. The funding strategy for the acquisition is well-structured, utilizing a mix of equity, credit facilities, and cash on hand, which keeps leverage at manageable levels. With these strategic and financial factors in play, Extendicare is positioned for robust growth, particularly in its home health platform, making it an attractive investment opportunity.
According to TipRanks, Callaghan is a 4-star analyst with an average return of 9.3% and an 83.33% success rate. Callaghan covers the Real Estate sector, focusing on stocks such as Chartwell Retirement Residences, Automotive Properties, and H&R Real Estate ate Staple.