Scotia $3.40 - current SP has “created a good entry point”Write up from Scotia.
OUR TAKE: Neutral. Post Q3F21 results we are maintaining our Sector Perform rating and our $3.40 target price. Our estimates are largely unchanged. The sell-off in the share price was likely due to the lower-than expected Spark revenue in Q3 and the broader market weakness, which we believe have created a good entry point. Management was very clear in guiding to 50%+ revenue recovery in Spark next quarter (we think that could turn out to be conservative as we are above guidance). More importantly, we believe management continues to make progress in driving near-term stability and is set up for future growth through monetizing its IP across the company (advertising, licensing and consumer products). WILD has a robust pipeline of content in development across numerous brands (Peanuts, Sonic, emoji, etc.) and is showing early progress in consumer product sales and direct advertising sales. WILD plans to host an investor meeting in the fall (first under the new management team), which we see as a positive development for WILD heading into F22.