RE:RE:RE:RE:RE:RE:RE:Target Price & Valuation Increases...These banks are heavily discounting Maxar's future due to uncertainty and debt levels (despite TD indicating that they expect NO bank covenant breaches).
TD is valuing and discounting based on their 2022 numbers (which I do not see them disclosing and I do not value their opinion enough to reverse engineer it lol) and then they give it a 6-6.5 multiple and then they go and discount that by 15%.
It's literally bordering on the asinine. Why they even bother putting a number to it is beyond me. At least they should provide a matrix and let the reader decide the realm of possibilities EBITDA levels, multiples applied, and discount rate.
Remember these were the same banks recommending purchase of Maxar at prices almost 8x - 10x recent price levels...so you need to make up your own mind.
Having said that, there is definitely risk and uncertainty here and IF that uncertainty is addressed then the valuation will shoot up once they start changing their multiples and discount rates.
Also as an aside, everyone should practice prudent money management. As a riskier stock at this point in time it would be wise to limit your holdings in such a stock to a small percentage of your overall worth / portfolio. That may require rebalancing as the price increases / changes.