MDA Space Ltd T.MDA

Revised Targets

[retiredcf]

Canaccord Genuity’s Doug Taylor cut his MDA Ltd. target to $15 from $20, remaining above the $13.50 average, with a “buy” rating, while BMO’s Thanos Moschopoulos lowered his target to $11 from $13 with a “market perform” rating.

“MDA posted a better-than-expected Q1 and kept its guidance for the year unchanged on the back of several substantial bookings that are expected to drive an uptick in growth in H2/22. The company said it expects to finalize contracting for Telesat’s Lightspeed program by the end of June, setting up a key catalyst that should give more confidence in this year’s execution against that guidance and cement the growth profile into 2023. This is likely to make the current valuation, at 8 times EBITDA using the 2022 guidance midpoint, look too cheap vs. historic norms and comps,” said Mr. Taylor.

[Capharnaum]

I always found it a bit shady that analysts can say that the Q results were better than expected and the guidance unchanged, yet they cut their target prices (by 25%, no less). I understand they do this because the current share price is on the lower end, but it does give the impression that targets are flimsy numbers that can change overnight by a lot even though nothing's in the business

[retiredcf]

You're seeing this happen with a multitude of companies. I think the analysts are as concerned about these markets as the rest of us so they are adopting a more conservative approach than normal. GLTA

[Capharnaum]

Yes, but if they believe that the changing markets won't affect MDA, then moving their targets (by changing the "multiplier" is just self-fulfilling prophecy and going where the wind blows. The targets become much more like playing catch-up to the current price than illustrating that the market price doesn't reflect the true value of a business.