RE:RE:News?Here's the reason
from Globe
Though he maintains a “constructive long-term view” of Exchange Income Corp. (EIF-T), Raymond James analyst Steve Hansen downgraded his rating for the stock, citing an “outsized” surge in share price in recent weeks and, accordingly, a decline in his “perceived risk-reward.”
The stock has increased 13.5 per cent in price over the past three weeks, compared to a 3.6-per-cent rise in the S&P/TSX Composite. Mr. Hansen called that increase a “big move on little news.”
“Given the lack of any concrete new information to explain/justify this upturn, coupled with the stock’s swift move through our $38.00 target price (unchanged), we feel it prudent to downgrade our rating,” said Mr. Hansen, who lowered the stock to “market perform” from “outperform.”
He did admit his bullish long-term view for its fortunes have not changed, and growth visibility remains in focus.
“As suggested in prior missives, we expect EIF will continue to demonstrate solid momentum through 2H16 and 2017, largely underpinned by healthy organic growth in its Aerospace & Aviation segment (including Regional One & Provincial Aerospace), an uptrend that continues to drive healthy FCF and dividend growth (including one last quarter),” said Mr. Hansen. “In this context, while management recently called out some minor 3Q headwinds, including reduced fire-fighting activity this past summer, we will continue to look for additional colour regarding future growth, both organic and acquisitive, given the firm’s healthy balance sheet and plentiful dry powder currently available. Stay tuned.”
His target of $38 is slightly lowered than the analyst consensus of $39.15.
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