Despite lowering his target for Goeasy Ltd. to $170 from $180, above the $161.80 average, with an “outperform” rating, National Bank's Mr. Gloyn recommends investors “add it to their radar.”
“While the potential for recession headwinds to drive increased charge-off rates remains a key risk, we believe the current trading multiple offers an attractive risk-reward as the market has overreacted to the Budget 2023 decision to lower the rate cap. GSY currently trades at 6.6 times P/E on our 2023 and 5.5x on our 2024 estimates (downwardly revised), roughly in line with record lows of 6.0 times (excluding the COVID bottom),” he said. Q1-23 results will be strong, and we expect management will update its three-year commercial forecast with stronger guidance than the market is pricing in today.”