Post by
SunsetGrill on Jan 14, 2022 2:30pm
TD and Scotia Keep Targets As Per RBC (so WTF)
TD
Recommendation: ACTION LIST BUY
Risk: HIGH
12-Month Target Price: C$10.00
12-Month Dividend (Est.): C$0.24
12-Month
Total Return: 94.3%
Market Data (C$) Current Price C$5.27 52-Week Range $4.34 - $6.54 Mkt Cap (f.d.) ($mm) $1,098.3 Float Cap ($mm) $1,040.3 Current Dividend $0.24 Dividend Yield 4.6% Avg. Daily Trading Vol. 2,187,059
Event Q1/22 results. Impact: MIXED There were pluses and minuses in the results and the outlook commentary (see details on page two). Revenues remain strong and stable (consolidated +10% y/ y, with TV advertising/subscription up 16%/3%), but regulatory requirements and pandemic distortions are disrupting programming costs (amortization expense and cash costs), so that our 2022 EBITDA and FCF estimates have declined meaningfully (less impact on 2023E, and our FCF estimate has actually increased slightly due to more program cost investment being pulled into 2022 — Exhibit 3). TD Investment Conclusion We reiterate our ACTION LIST BUY rating, with no change in our $10.00 target price. Our target continues to be based on 2023E (with a 10% time-value discount), and we have nudged our target multiple up to 6.0x EBITDA (versus 5.75x previously — still well below key U.S. comps in the range of 7-8x 2022E, as shown in Exhibit 5) based on these positive factors cited by management: - Based on its confidence in cash flows and its view that the stock is heavily undervalued, a new (and likely active, in our view) NCIB program for up to 5% (9.67 million shares) has been initiated. We now assume that 3 million share repurchases will be made in F2022, and interestingly, we would get exactly 2.50x debt/EBITDA at year-end if the entire NCIB is executed at the current share price (2.41x estimate with no buybacks). - Despite much-feared CRTC unbundling rules, subscription revenues have been resilient (Exhibit 2; see our recent report for a deeper dive: LINK). - With digital programming rights secured and extended (despite suppliers having their own streaming platforms), Corus is now adding new distribution partners for STACKTV (new deal with Rogers). When investors realize that Corus can pivot to follow viewers where they want to watch video, we believe the stock should re-rate materially higher. - The percentage of revenue from new/digital platforms and optimized advertising sales continues to increase meaningfully (Exhibit 6). - The new Broadcasting Act could be introduced in February, and an update from the CRTC on its review of radio regulations (including consolidation) is expected in the Spring. 7.5 7.5 7 7 6.5 6.5 6 6 5.5 5.5 5 5 4.5 4.5 4 4 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 CJR.B-T: Price Company Profi
Comment by
ratsnake220 on Jan 18, 2022 1:05am
TD has a target that is much mcuh higher thatn others.....Yes its a buy at $5.27.....Would you rather pay $12 a month for Netflix or $12 for Crave Tv....thought so