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Power Corp of Canada (TSE:POW)
TSX:POW

Power Corp of Canada (POW) AI Stock Analysis

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Power Corp of Canada

(TSX:POW)

Rating:72Outperform
Price Target:
Power Corp of Canada shows resilience with robust cash flow management, stable financials, and an attractive dividend yield. The earnings call underscores growth in net earnings and strategic initiatives. However, challenges in revenue growth and operational efficiency, coupled with recent share price volatility, temper the outlook. The stock's technical indicators suggest caution in the short term, though long-term valuation remains appealing.
Positive Factors
Corporate Structure
POW's reorganization simplifies its corporate structure and generates modest EPS accretion.
Earnings Contribution
GBLB's contribution to POW's adjusted earnings exceeded expectations, reaching C$20 million compared to a previous estimate of C$11 million.
Target Price
The target price has been increased to $52 from $49, reflecting improved targets for GWO and IGM.
Negative Factors
Earnings Estimate
Adjusted EPS for 2025 is modestly lowered to $5.42 from $5.47, due in part to consolidation adjustments.
Reliance on Segments
Heavier reliance on GWO/IGM poses challenges for NAV growth, given Market Perform ratings on these segments.

Power Corp of Canada (POW) vs. iShares MSCI Canada ETF (EWC)

Power Corp of Canada Business Overview & Revenue Model

Company DescriptionPower Corporation of Canada operates as an international management and holding company in North America, Europe, and Asia. It operates through Lifeco, IGM Financial, and GBL segments. The company offers life, disability, critical illness, accidental death, dismemberment, health and dental protection, and creditor insurance; retirement and investment management; asset management; and reinsurance and retrocession; investment advisory, financial planning, and related services; and fund, protection, and wealth management services. It also provides employer-sponsored defined contribution plan, individual retirement account and drawdown, enrollment, communication material, investment option, and education services, as well as taxable brokerage accounts; private label recordkeeping and administrative services; payout annuities, equity release mortgages, life bonds, mortgage, securities, pension, private equity, debt and thematic fund, and financial services; and investment products, such as equity, fixed income, absolute return and alternative strategies, exchange traded funds, trust funds, and model-based separately managed accounts and portfolios. In addition, the company holds interests in various businesses, such as mineral-based specialty solutions; testing, inspection, and certification; cement, aggregates, and concrete; wines and spirits; sportswear and sports equipment design and distribution; materials technology and recycling of precious metals; disposable hygiene products; Atlantic salmon; customer experience and business process outsourcing; regional leisure parks; mobile game development and publishing; and bicycle manufacturing. Further, it generates renewable energy through solar and wind facilities; and designs, develops, and manufactures specification-grade LED solutions and zero-emission vehicles. The company was incorporated in 1925 and is based in Montréal, Canada. Power Corporation of Canada operates as a subsidiary of Pansolo Holding Inc.
How the Company Makes MoneyPower Corporation of Canada generates revenue through its diversified portfolio of subsidiaries primarily in the financial services sector. Key revenue streams include premiums and fees from insurance products offered by Great-West Lifeco, management fees, and investment income from IGM Financial's mutual funds and investment services. Additionally, Power Corp benefits from dividend income and capital appreciation through its investment in Groupe Bruxelles Lambert, a holding company with stakes in European blue-chip companies. The company also seeks to enhance its earnings through strategic partnerships and investments in the renewable energy sector, aiming to capitalize on the growing demand for sustainable energy solutions. This diversified approach helps Power Corp maintain a stable and growing income stream.

Power Corp of Canada Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q1-2025)
|
% Change Since: 3.29%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call for Power Corporation presented a mostly positive outlook with strong earnings growth, substantial NAV per share increase, and notable performance from Great-West Lifeco and IGM Financial. The company also highlighted successful strategic partnerships and fundraisings. However, there were some challenges such as GBL's contribution decline and post-quarter share price volatility.
Q1-2025 Updates
Positive Updates
Solid Q1 2025 Earnings Growth
Adjusted net earnings from continuing operations were $787 million, up 11% compared to $710 million in Q1 2024. Earnings per share increased by 12% from $1.09 to $1.22.
NAV Per Share Increase
NAV per share was $68.99 at the end of Q1 2025, up 14% from December 31, 2024, driven by Great-West's strong share price performance.
Great-West Lifeco Performance
Great-West Lifeco delivered strong quarterly base earnings of over $1 billion for the fourth consecutive quarter, with a base ROE of over 17%.
IGM Financial Record Earnings
IGM reported record first-quarter adjusted EPS; strong net inflows and impressive growth in client assets across strategic investments.
Successful Fundraising and Strategic Partnerships
Sagard and Power Sustainable have launched new funds and engaged in strategic partnerships, including Sagard's acquisition of BEX Capital.
Negative Updates
GBL Contribution Decline
GBL's contribution to Power's adjusted net earnings declined year-over-year due to the absence of fair value gains from the prior year.
Share Price Volatility
Post-quarter-end, NAV per share decreased to $63.60, reflecting share price volatility.
Company Guidance
During the Power Corporation First Quarter 2025 Earnings Conference Call, the company reported an adjusted net earnings from continuing operations of $787 million, marking an 11% increase from the previous year's $710 million. The earnings per share (EPS) rose 12% to $1.22 compared to $1.09 last year, aided by a share buyback program that repurchased 3 million shares. The net asset value (NAV) per share was $68.99 as of March 31, up 14% from the end of 2024, driven significantly by the share price performance of Great-West. The Board declared a quarterly dividend of $0.6125 per share, up 9% year-over-year. Great-West reported over $1 billion in base earnings for the fourth consecutive quarter, with a base return on equity (ROE) over 17%. IGM's earnings rose 6% year-over-year, propelled by record assets under management and administration (AUM&A) and net inflows. Power Corporation remains committed to returning capital to shareholders, with $135 million in buybacks during Q1.

Power Corp of Canada Financial Statement Overview

Summary
Power Corp of Canada shows mixed financial performance. While there's a decline in revenue, the company has improved its net profit margin. The balance sheet reflects financial stability with controlled leverage and a strong equity position. Cash flow remains robust, with effective cash conversion and solid free cash flow generation.
Income Statement
67
Positive
Power Corp of Canada showed a decline in total revenue from 2023 to 2024, impacting its growth trajectory. The gross profit margin remains consistent due to the nature of the business, with gross profit equaling total revenue. The net profit margin increased from 4.84% in 2023 to 7.02% in 2024, indicating improved profitability despite lower revenue. The decline in EBIT and EBITDA margins in 2024 compared to 2023 signals challenges in operational efficiency.
Balance Sheet
72
Positive
The company maintains a strong equity position, with a debt-to-equity ratio of 0.95 in 2024, reflecting moderate leverage. Return on equity (ROE) improved to 11.70% in 2024, demonstrating effective use of equity to generate profit. The equity ratio remained stable at 2.80%, indicating a balanced capital structure. Overall, the balance sheet suggests financial stability with controlled leverage.
Cash Flow
75
Positive
Despite a slight decrease in operating cash flow from 2023, the company maintains a robust free cash flow, with a growth rate of 6.63%. The operating cash flow to net income ratio was 2.13 in 2024, highlighting efficient cash conversion. Free cash flow to net income ratio of 1.82 indicates strong cash generation relative to net income. Overall, cash flow statements reflect solid cash management and sustainability.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
34.90B39.80B46.43B48.74B69.56B64.62B
Gross Profit
35.58B39.80B46.43B48.74B69.56B64.62B
EBIT
-2.54B5.53B6.97B3.09B3.04B1.59B
EBITDA
5.54B5.97B4.90B5.89B5.96B4.67B
Net Income Common Stockholders
2.73B2.79B2.25B3.54B4.67B3.53B
Balance SheetCash, Cash Equivalents and Short-Term Investments
28.63B27.69B21.88B22.25B8.16B9.48B
Total Assets
854.84B851.36B749.48B733.65B661.63B629.10B
Total Debt
21.64B22.80B20.94B21.17B19.53B21.54B
Net Debt
9.06B10.25B11.80B12.31B11.37B12.06B
Total Liabilities
810.39B807.37B708.21B689.55B617.90B590.37B
Stockholders Equity
24.15B23.88B22.14B24.02B24.34B22.21B
Cash FlowFree Cash Flow
4.46B5.08B4.76B6.70B10.49B9.71B
Operating Cash Flow
5.31B5.95B5.93B7.50B11.05B10.10B
Investing Cash Flow
-1.44B-1.76B-2.62B-6.50B-10.58B-8.41B
Financing Cash Flow
-1.99B-1.32B-2.80B-948.00M-962.00M1.64B

Power Corp of Canada Technical Analysis

Technical Analysis Sentiment
Positive
Last Price52.15
Price Trends
50DMA
50.65
Positive
100DMA
48.39
Positive
200DMA
45.65
Positive
Market Momentum
MACD
0.46
Negative
RSI
57.48
Neutral
STOCH
51.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:POW, the sentiment is Positive. The current price of 52.15 is above the 20-day moving average (MA) of 51.03, above the 50-day MA of 50.65, and above the 200-day MA of 45.65, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 57.48 is Neutral, neither overbought nor oversold. The STOCH value of 51.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:POW.

Power Corp of Canada Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSPOW
72
Outperform
C$33.13B12.2711.92%4.45%7.63%8.84%
64
Neutral
$12.80B9.717.59%16985.66%12.07%-7.53%
MFMFC
$54.92B16.6010.17%3.75%
SLSLF
$36.81B16.4413.18%3.70%
$38.41B12.8913.42%3.27%
TSIAG
77
Outperform
C$13.05B14.7912.54%2.51%-7.31%28.65%
TSGWO
67
Neutral
C$47.76B12.4514.65%4.43%17.48%25.54%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:POW
Power Corp of Canada
52.15
14.92
40.08%
MFC
Manulife Financial
31.94
7.10
28.58%
SLF
Sun Life Financial
64.81
17.57
37.19%
NTIOF
National Bank of Canada
97.90
14.86
17.89%
TSE:GWO
Great-West Lifeco
51.32
13.57
35.95%
TSE:IAG
iA Financial Corporation Inc
139.67
54.66
64.30%

Power Corp of Canada Corporate Events

Executive/Board ChangesShareholder Meetings
Power Corporation Elects Board of Directors with Strong Shareholder Support
Positive
May 14, 2025

Power Corporation of Canada announced the election of its board of directors, with all nominees proposed by management successfully elected. The election results, disclosed in accordance with the Toronto Stock Exchange Company Manual, reflect strong shareholder support for the nominees, which may reinforce the company’s strategic direction and stability in its financial services operations across North America, Europe, and Asia.

The most recent analyst rating on (TSE:POW) stock is a Hold with a C$52.00 price target. To see the full list of analyst forecasts on Power Corp of Canada stock, see the TSE:POW Stock Forecast page.

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Power Corporation Reports Q1 2025 Financial Results Amid Strategic Growth Initiatives
Neutral
May 13, 2025

Power Corporation of Canada reported a decrease in net earnings for the first quarter of 2025 compared to the previous year, with net earnings from continuing operations at $689 million. However, adjusted net earnings increased to $787 million, highlighting strong performance in its subsidiaries, particularly in the Retirement and Wealth businesses. The company also saw a rise in adjusted net asset value per share and continued its share buyback program, indicating a focus on enhancing shareholder value. The strategic partnership between Sagard and GBL, along with the launch of Power Sustainable’s new investment strategy, underscores Power Corporation’s commitment to expanding its investment capabilities and strengthening its market position.

The most recent analyst rating on (TSE:POW) stock is a Hold with a C$52.00 price target. To see the full list of analyst forecasts on Power Corp of Canada stock, see the TSE:POW Stock Forecast page.

Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Power Corporation Reports Strong 2024 Financial Results and Dividend Increase
Positive
Mar 19, 2025

Power Corporation of Canada reported strong financial results for the fourth quarter and full year of 2024, with significant increases in net earnings and adjusted net earnings compared to the previous year. The company also announced a 9% dividend increase and highlighted strategic initiatives such as share buybacks and partnerships, which are expected to bolster its market position and enhance shareholder value.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.