Desjardins Desjardins Securities’ Gary Ho raised his target for shares of Goeasy Ltd. to $190 from $185 with a “buy” recommendation. The average is $206.11.
“We tweaked our estimates and expect loan book growth and revenue yield to be at the higher end of guidance, with NCO [net charge-offs] at the mid-point,” he said. “We view the federal budget with no rate cap implementation date and no further step-down as a positive. Our EPS estimates are slightly down to factor in increased net charge-offs, reflecting recent unemployment and insolvencies data; we will continue to monitor these.”
“Our investment thesis is predicated on: (1) GSY’s ability to manage in the current challenging macro environment through its robust credit underwriting platform, supported by its creditor insurance program; (2) rate cap has a manageable impact on future revenue yield and profitability; (3) solid loan book growth, particularly on secured products; (4) credible management team; and (5) the business has consistently generated a 20-per-cent-plus ROE.”