The Globe and Mail reports in its Friday edition that CIBC analyst Robin Manson-Hing is drastically cutting his price target for Avigilon ($14.74) as sales force growth ends and focus turns to the bottom line.
The Globe's Darcy Keith and Jody White write in the Eye On Equities column that Avigilon posts third quarter results the first week of November. Mr. Manson-Hing says: "Over the last three months, splitting of sales manager coverage regions has slowed to a near halt, while product and channel strategies will focus increasingly on EBITDA margin growth at the expense of revenue. ... As expectations for Avigilon's sales growth come down, we believe the P/E multiple should be closer to that of its peers. We also believe consensus 2015 EBITDA and EPS need to move toward our estimates."
He maintains his "sector outperformer" rating and slashed his price target to $25 from $40. The analyst consensus price target, according to Thomson Reuters, is $31.75.
Mr. Manson-Hing maintained his "sector outperformer" rating in The Globe on Aug. 7, when the shares could be had for $25.10. Cantor Fitzgerald Canada analyst Justin Kew maintained Avigilon at "buy" in the Eye column on Sept. 12. The shares were then worth $20.
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