The Globe and Mail reports in its Wednesday, April 11, edition that BMO Nesbitt Burns analyst Nik Priebe began coverage of Home Capital Group ($14.26) with a "market perform" rating. The Globe's David Leeder writes in the Eye On Equities column that Mr. Priebe set a share target of $15.50. Analysts on average target the shares at $18.55. Mr. Priebe says in a note: "Following the liquidity crisis in Q2/17, the outlook appears more stable for Home Capital. Deposit gathering capabilities have been restored, the liquidity position has stabilized and the backstop credit facility has been repaid in full. Investor focus has now shifted to the asset side of the balance sheet, as the company attempts to regain lost market share and scale up its lending activities. Despite the improved outlook, many risks remain including: i) a timely ramp up of the underwriting team to restore originations sufficiently to avoid further balance sheet contraction; ii) poor earnings visibility and limited guidance; iii) possible NIM compression as a cost of market share gains; iv) significant exposure to the Toronto housing market, and; v) a higher rate of portfolio attrition in the traditional single family book."
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