Power Corp of Canada, the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Tom Mackinnon from BMO Capital maintained a Hold rating on the stock and has a C$69.00 price target.
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Tom Mackinnon has given his Hold rating due to a combination of factors tied to both earnings momentum and valuation. While he modestly increased his near-term EPS forecast on stronger contributions from Great-West Lifeco and IGM, this was offset by weaker results from GBL and the asset management platforms, leading him to trim longer-term estimates and lower his target price to $69, implying only limited upside.
Moreover, the recent reorganization, though slightly accretive to earnings via buybacks, leaves Power Corp. more dependent on GWO and IGM, both of which he already views as fairly valued with Market Perform ratings. He also sees ongoing minimal or negative contributions from Sagard and Power Sustainable’s asset management activities, making it hard to anticipate meaningful net asset value growth or a narrowing of the current holding-company discount, which together support a Hold stance.
Based on the recent corporate insider activity of 48 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.