On Wednesday, BMO Capital Markets adjusted its outlook on Real Matters Inc. (REAL:CN) (OTC: RLLMF), lowering the company's price target to Cdn$6.50 from the previous Cdn$7.00. Despite the price target reduction, the firm maintained a Market Perform rating on the stock.
The adjustment followed the company's second-quarter results for fiscal year 2024, which marked a return to year-over-year net revenue growth for Real Matters, the first such increase in three years. The company also showed strong execution in gaining market share and maintaining profit margins.
The analyst cited the prolonged period of higher interest rates as a reason for adopting a more conservative stance for the second half of fiscal year 2024 and the full fiscal year 2025. This economic factor led to the revised price target.
Real Matters' current valuation was not seen as particularly attractive in comparison to BMO Capital Markets' projections. These forecasts are based on the expectation of a robust recovery in the end-market over the next few quarters. Despite the solid quarterly performance, the firm's outlook remains cautious due to the external economic environment affecting the company's prospects.
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