BMO Financial given IVQ 'Neutral' rating with $2 CAD targetBack of the envelope calculation:
Total asset went from $1.5B to $1.3B, while debt went from $1.052B to $0.894B.
So, if they were to dispose of all their assets while reducing debt then they would be debt-free at ~$200M USD using the same ratio of reduction.
Of course, the current difference between total assets - total debt = ~$400M USD. I am being conservative and adding in the discount of disposal.
Since they were currently disposing of non-core assets, I believe they would get a better valuation on the core assets. So, the terminal value would be somewhere between $200M to $400M USD.
They are still cashflow positive, after the interest payment, so they would earn at least $5~6M USD per quarter while they dispose of all their assets if they chose to do so.
I am getting a different valuation from what BMO has. What is missing?