2023-07-28 17:26:46
Both the CEO of the company and its chief financial officer made reassuring remarks. (Photo: 123RF)
What to do with the titles of Dialogue, Canadian Pacific Kansas City and Boeing? 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.
Dialogue technologies de la santé (CARE, $5.05): purchase offer from Sun Life
Dialogue announces that it has reached a definitive agreement with Sun Life Financial to be purchased at a price of $5.15 per share.
Desjardins analyst Jérôme Dubreuil does not foresee any regulatory risk for the transaction and believes that the price paid for Dialogue’s stock by Sun Life is fair given current market conditions. He recalls that the target price was only 2% higher than the purchase price.
The current offer values Dialogue at around $300 million, which represented a premium of around 43% compared to its closing price prior to the announcement of the offer and 59% compared to the average price of the last 20 days. This also represents a multiple of 2.8 times the estimated revenue in 2023, slightly higher than the 2.0 presented by virtual healthcare providers who do business with companies.
Since Dialogue’s board of directors and major shareholders have affirmed their support for the offer, he does not expect the company to receive a superior offer. Sun Life already held 23% of the shares, while two other major shareholders held 21% and are also in agreement with the proposed transaction.
The analyst saw solid long-term growth value for Dialogue and he saw potential for multiple stock appreciation when the company finally achieved positive earnings before interest, taxes, depreciation and amortization (EBITDA).
Jérôme Dubreuil adds that this transaction signals strong value in the fundamentals of this sector, even if it was difficult for a relatively small company to carve out a place for itself.
Due to the announcement of the transaction, Desjardins reduced its target price from $5.25 to $5.15.
Charles Poulin
Canadian Pacific Kansas City (CP, $109.64): an opportunity to seize
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