BMOSeems a bit self serving. NVEI finally releases solid results so in response, they slash their target by a third. Probably hoping to keep a lid on the SP until they have added to their holdings. GLTA Assuming coverage of Nuvei Corp., BMO’s Rufus Hone trimmed the firm’s target to US$30 from US$45, reiterating an “outperform” rating. The average is US$33.91.
“Following a series of tricky quarters, NVEI reported solid 3Q results,” he said. “We believe consistency is the key demand from investors, who will need to see a string of solid quarterly reports demonstrating: (1) 20-per-cent-plus growth in Global Commerce (with no additional large customer churn), (2) improved revenue traction from Paya, and (3) EBITDA margin expansion. We see early signs that NVEI will be able to execute across these fronts, and we expect investors will become significantly more comfortable with NVEI’s growth trajectory — and re-rate the equity during 2024.”
“Our model suggests that NVEI trades at less than 9 times FCF (2025 estimate), implying a 12-per-cent levered FCF yield. We think this affords investors an excellent entry point — and highlight the significant equity accretion from debt paydown (NVEI’s top capital management priority).”