Desjardins Securities analyst Gary Ho says that CI Financial Corp. (CIX-T) is “too cheap to ignore.” Seeing “early signs of improvements” in the wake of stronger-than-expected fourth-quarter results, he raised his rating to “buy” from “hold,” citing a 25-per-cent potential return.
While it reported January net outflows, they were better than what we modelled, and positive industry momentum should benefit CI, in our view,” he said. “In addition, management disclosed intriguing U.S. RIA metrics, including 9-per-cent net organic growth and a 40-per-cent EBITDA margin (better than our forecast).”
His target for CI shares rose to $22 from $20. The average on the Street is $21.38.
“We are encouraged to see some signs of retail net redemptions stabilizing,” said Mr. Ho. “In addition, the U.S. RIA buildout has gained traction and we are comforted by the solid net organic growth rate as well as the healthy EBITDA margins this platform generates. Valuation remains attractive and CI’s NCIB program should support the shares.”
Elsewhere, RBC Dominion Securities’ Geoffrey Kwan upgraded CI Financial to “outperform” from “sector perform” with a $24 target, rising from $19
CIBC’s Nik Priebe moved his target to $20 from $18.50 with a “neutral” rating, while Canaccord Genuity’s Scott Chan raised his target to $25 from $24 with a “buy” rating.