Post by
Zipolitemexico on Sep 05, 2021 1:33pm
ScotiaBank PT $48!!!!
OUR TAKE:
Positive. Q2/21 Adj.EPS came in higher-than-expected, driven by realized gains in the "standalone businesses" and "alternative and other investments" portfolio. GWO and IGM also posted very strong Q2/21 results that came in above expectations and saw solid y/y EPS growth. We view this as a key highlight from the quarter as we believe that GWO and IGM's ability to demonstrate sustainable double-digit earnings growth will be a key catalyst to narrow POW's NAV discount.
The expected accretion from GWO's acquisition of Prudential's retirement services should also improve investor sentiment toward its growth expectation, operational momentum, and perceived competitive positioning. POW stock is up over 40% YTD, well ahead of the S&P/TSX Financial Index at 24%, and outperforming both GWO and IGM, driven largely by a ~900bps narrowing of its NAV discount.
That said, we believe valuation remains attractive as our estimated current NAV discount of ~21% continues to be historically wide. Increasing target price but maintaining SP rating. We continue to see upside given the potential for NAV accretion and further tightening of the NAV discount, and view POW as attractive for investors with a mid-to longer-term investment horizon.