In a report released yesterday, Tom Mackinnon from BMO Capital maintained a Hold rating on Power Corp of Canada (POW – Research Report), with a price target of C$52.00.
Tom Mackinnon has given his Hold rating due to a combination of factors influencing Power Corp of Canada’s financial outlook. The company’s target price has been increased to $52, reflecting recent adjustments in the targets for its subsidiaries, Great-West Lifeco (GWO) and IGM Financial (IGM), following their Q4/24 results. However, the adjustments in earnings estimates, including a modest reduction in the 2025 expected earnings per share, suggest a cautious approach.
Despite the reorganization that simplifies Power Corp’s structure and provides modest earnings per share accretion, the company’s heavy reliance on GWO and IGM makes it challenging to foresee significant growth in net asset value. The market performance ratings for these subsidiaries contribute to the Hold rating, as does the need for a reduced negative contribution from the holding company to narrow the discount to net asset value. These factors collectively support the decision to maintain a Hold rating on the stock.
Based on the recent corporate insider activity of 51 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 POW in relation to earlier this year.