On Tuesday, BMO Capital Markets adjusted its outlook on Power Corp of Canada (POW:CN) (OTC: PWCDF), raising the price target to Cdn$42.00 from the previous Cdn$41.00. The firm maintained a Market Perform rating on the stock.
The revision of the price target reflects an increased earnings forecast for the first quarter of 2024. The analyst at BMO Capital expects adjusted earnings per share (EPS) to reach $1.23, up from the prior estimate of $1.09, which surpasses the consensus of $1.09.
This uptick in expected earnings is attributed to stronger-than-anticipated base EPS results from Great-West Lifeco (GWO) and adjusted EPS from IGM Financial (OTC:IGIFF), as well as a higher contribution from Groupe Bruxelles Lambert (GBLB) based on its first-quarter results for 2024.
Looking further ahead, the analyst also revised the full-year adjusted EPS estimate for 2024, increasing it to $4.84 from the earlier projection of $4.57. The forecast for 2025 was similarly adjusted, with the estimated adjusted EPS now at $5.19, up from the previous $4.98. The upward revisions are primarily due to the raised estimates for Great-West Lifeco.
The Market Perform rating suggests that BMO Capital Markets believes Power Corp of Canada's stock will perform in line with the broader market. The revised price target and earnings estimates indicate an expectation of steady performance from the company based on the reported financial results and projections.
InvestingPro Insights
As BMO Capital Markets revises its outlook on Power Corp of Canada, a glance at the real-time data from InvestingPro provides a broader perspective on the company's financial health and market performance. With a market capitalization of 18.27 million USD and a notable revenue growth of 110.81% in the last twelve months as of Q4 2023, Power Corp of Canada is demonstrating a robust increase in its earnings potential.
InvestingPro Tips indicate that analysts are expecting sales growth in the current year, which aligns with the optimistic earnings forecast presented by BMO Capital Markets. Additionally, the fact that three analysts have revised their earnings upwards for the upcoming period further reinforces the positive sentiment surrounding the company's financial outlook. It's important to note that Power Corp of Canada is trading at a high P/E ratio relative to near-term earnings growth, which could be a point of consideration for investors.
With these insights in hand, investors may find additional value in the comprehensive analysis available on InvestingPro, which includes several more InvestingPro Tips for Power Corp of Canada. For those interested in a deeper dive into the company's financials and market performance, using the coupon code PRONEWS24 can secure an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Finally, it's worth mentioning that Power Corp of Canada has maintained dividend payments for 52 consecutive years, which could be an attractive feature for income-focused investors. Coupled with the company's status as a prominent player in the Insurance industry, these factors contribute to a comprehensive understanding of Power Corp of Canada's market position.
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