TSX:GSY - Post Discussion
Post by
retiredcf on Feb 09, 2024 9:46am
Desjardins Details
Ahead of its Feb. 13 earning release, Desjardins Securities’ Gary Ho hiked his Goeasy Ltd. target to $185 from $165 with a “buy” rating. The average is $193.78.
“We expect loan book growth, revenue yield and NCO to be in line with guidance. On the rate cap, we believe that 35 per cent will be implemented mid-2024, with no further step-down in the near term,” he said. “GSY will refresh its three-year outlook while introducing 2026 guidance. We expect a 10-per-cent dividend hike this quarter. We upped our EPS estimates, reflecting lower financing costs and better operating margins.”
“Our investment thesis is predicated on: (1) its 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.”
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