BMO Capital Raises MDF Commerce Target to $4.50BMO Capital Raises MDF Commerce Target to $4.50, Maintains Market Perform After InterTrade Divestment
2022-10-06 12:12:16 PM ET (MT Newswires)
12:12 PM EDT, 10/06/2022 (MT Newswires) -- BMO Capital's Deepak Kaushal has adjusted his forecasts for MDF Commerce to reflect the company's divestment of InterTrade, which eliminates debt, reduces revenue by 10%, and improves gross margin by 190 bps.
"We believe balance sheet risk has reduced substantially and narrowed focus on e-procurement and e-commerce divisions is a positive. That said, we maintained our valuation multiple at 1.5x F2023E EV/Sales to reflect industry-wide compression for growth companies, and near-term margin and cash flow challenges."
BMO has maintained its Market Perform on MDF, but raised its one year target to $4.50. "While our higher target price reflects the unlocking of further value, we believe a full re-rating will take time."