The Globe and Mail reports in its Thursday edition that Raymond
James analyst Brenna Phelan
says Home Capital Group's deal
with Berkshire Hathaway has
been a "funding fix" for the
lender and has helped stabilize
its situation. The Globe's Gillian Livingston writes in the Eye On Equities column that Ms. Phelan continues to target the shares at $17.50 and maintain a "market perform"
rating. However, she cut
her 2017 estimated adjusted earnings per share to a
loss of 45 cents from a profit of 43
cents, and reduced the 2018 estimated
adjusted EPS to $1.86 from
$2. She says in a note: "Home Capital Group is currently in the midst of rebuilding stakeholder confidence subsequent to a series of negative events which culminated in a confidence and liquidity crisis. While recent developments, including settlement with the OSC and sale of both commercial and residential mortgages have provided headline risk mitigation and onetime liquidity coupled with confidence in loan quality, respectively, the $153-million equity investment by Berkshire Hathaway, which has now closed, was the first significant step forward in obtaining the ongoing deposit funding that is critical to returning to profitability, in our view."
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