TSX:FTT - Post Discussion
Post by
retiredcf on Jul 29, 2022 7:50am
Canaccord
Canaccord Genuity’s Yuri Lynk cut his Finning International Inc. (FTT-T) target to $42 from $46 with a “buy” rating. The average is $39.50.
“Finning shares have declined 32 per cent, underperforming the broader S&P/TSX Index’s 13-per-cent decline, Toromont’s 16-per-cent decline, and Caterpillar’s 19-per-cent decline,” said Mr. Lynk. “We are surprised Finning’s stock price continues to exhibit more volatility than peers despite the improvements management has made in the business. Presently, Finning’s P/BV multiple, our preferred downside measure, is 1.7 times and approaching cyclical troughs that have ranged from 1.4 times to 1.1 times over the last 22 years. Thus, it appears recession risk is at least partially reflected in Finning’s share price, yet fundamentals remain solid, creating a valuation disconnect. We continue to view Finning as well insulated from the cost pressures eroding the margins of several companies due to its pricing power and compelling customer value proposition. While supply chain issues are likely to weigh on the top line, Finning can use the rental, used equipment, and rebuild channels to get iron into the hand of its customers.”
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