The Globe and Mail reported on Friday, May 12, edition that BMO Capital Markets analyst Deepak Kaushal has downgraded Converge Technology Solutions to "market perform" from "outperform." The Globe's David Leeder writes that Mr. Kaushal slashed his share target by $3 to $4.50. Analysts on average target the shares at $5.79.
Mr. Kaushal says in a note: "Despite potential upside from current low valuation and accretive share buybacks, we downgrade to Market Perform following conclusion of the strategic review and the strategy change focusing on organic growth vs M&A. Given macro-uncertainty and higher investments, we believe it will take time to demonstrate consistent attractive organic growth and margin expansion, and re-expand valuation multiple. Consequently, we cut our forecasts and target multiple." The Globe reported on Sept. 9 that Mr. Kaushal began coverage on Converge Technology with an "outperform" recommendation and $9 share target. Converge shares could then be had for $5.86. The Globe reported on Nov. 12 that Mr. Kaushal had reaffirmed his "outperform" call when the shares were going for $4.29. The Globe's Andrew Willis said Converge was a high flyer no more. It was then worth $4.78.
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