CIBC: Target at 45$ (from 42$)IGM Financial (Outperformer, $45 Price Target)
GM Financial is scheduled to report Q1 earnings on Thursday, May 6 after market close with a conference call the following day at 8 a.m. ET (1-800-319-4610). We are forecasting Q1 EPS of $0.89, modestly above consensus at $0.87.
IGM pre-reported record net flows for Q1 of $2.2 billion compared to $821 million the same quarter last year. IG Wealth experienced its best sales result in over two decades, and Mackenzie achieved an all-time high. It appears IGM is gaining market share as it continues to strengthen its consultant network at IG Wealth and delivers solid investment performance at Mackenzie. Additional commentary around flows subsequent to quarter-end will be helpful to gauge the outlook beyond the more seasonally active RSP period. We are currently forecasting a continuation of positive net flows throughout 2021.
Against the backdrop of an improving industry environment, IGM has been gaining market share, which is an attractive setup, in our view. The transformation at IG Wealth also appears to be maturing, with the number of consultants stabilizing and productivity improving. A sustained period of positive net flows at IG Wealth could be a catalyst as the transformation starts to bear fruit.