The Desjardins analyst’s recommendation is to keep the title of BCE. (Photo: LesAffaires.com)
What to do with titles from Open Text, BCE and D2L? Here are some recommendations from analysts likely to move prices soon. Note: the author may have a totally different opinion from that expressed by the analysts.
Open Text (OTEX-NASDAQ, US$34.70): Strong 2Q leads BMO analyst to raise target price
The 2nd quarter results of the financial year of the Waterloo company, specialized in digital document management and data interchange, were solid, so Thanos Moschopoulos, analyst at BMO Capital Markets, raises its target price from US$34 to US$39, while maintaining, of course, its recommendation to “outperform”.
It should be noted that the share price of Open Text started a good recovery in October, the title going from 25 $US to 34 $US in less than 4 months. In addition, Open Text is about to complete the acquisition of the British company Micro Focus International which was announced last August.
Although the BMO analyst says he has some apprehension about the long-term growth trajectory of Micro Focus, he says he is encouraged by Open Text’s strong execution in its second quarter, and believes the risk/ yield makes a lot of sense at the current stock price.
The company’s revenue for the last quarter was $897.4 million (M$). Although up only 2% compared to the corresponding quarter of the previous year, this result exceeded analysts’ consensus expectations, which forecast $878.4 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $341.0 million, down 1% compared to the previous year. But again, this result exceeded the analyst consensus forecast of $313.7 million. Adjusted earnings per share were $0.89, beating the consensus forecast of $0.78.