2023-12-05 22:24:33
Ontario company First Quantum Minerals is forced to close its copper mine in Panama. (Photo: 123RF)
What to do with the stocks of Cogeco Communication, First Quantum Minerals and Uber? Here are some analyst recommendations likely to move prices soon. Note: the author may have an opinion completely different from that expressed.
Cogeco Communication (CCA-T, $53.70): a game-changing auction
Investors should place more value on the 3800 MHz spectrum licenses that Cogeco Communication now holds. At least, that’s what Vince Valentini of TD Securities is doing, increasing his target price from $87 to $92.
The financial institution organized the last meeting between the company and its investors on the sidelines of the most recent auction of these licenses in which the company invested nearly 200 million dollars (M$).
Cogeco Communication has already dedicated nearly $600M in the band spectrum, recalls the analyst, including nearly $280M in key markets for which Cogeco is not the cable distributor, such as Montreal, Quebec, Toronto and Ottawa. According to him, the spectrum has such value that it must be taken into account in the evaluation of the company.
Certainly, it increases its target net debt by $200 million, but it also contributes to boosting its target price. Since for the moment, it is still difficult to know how the company will manage to monetize its licenses and deploy wireless, only take into account in its calculation 50% of the net book value of the assets seems wise to him.
Among other changes to his forecast, Vince Valentini redistributed to subsequent quarters millions of dollars in earnings before interest, taxes, depreciation and amortization expected in the first quarter of 2024.
The analyst was able to note during the meeting with investors that the management and the board of directors of the organization are concerned by the lack of appeal that the title generates. Indeed, the multiple of its enterprise value/earnings before interest, tax and depreciation ratio is at a historic low while its dividend yield is at a peak.
This leads the analyst to believe that Cogeco Communication might go into seduction mode in 2024 to try to court investors.
Vince Valentini also believes that the stock is undervalued, which is why he maintains his “buy” recommendation, as there are many factors that might increase the value of its stock.
That said, even without this increase that he anticipates, the performance of the stock alone “justifies his purchase,” he believes.
First Quantum Minerals (FM, $11.03): an analyst cuts more than half of its target price
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