logo
  Join        Login             Stock Quote

IBI Group (IBG) Downgraded to 'Sector Performer' by CIBC, PT Cut To $8.50

 November 13, 2012 04:04 PM


(By Balaseshan) CIBC World Markets Inc. analyst Paul Lechem downgraded his rating of IBI Group Inc. (TSE: IBG) to "sector performer" from "sector outperformer" and lowered his price target to $8.50 from $12.50.

The brokerage reduced its 2012 EPS estimate for the multi-disciplinary professional services provider to $0.83 from $0.97 and its 2013 estimate to $0.80 from $1.03.

IBI reported weak Q3-2012 results - revenues, EBITDA and EPS of $87 million, $9.0 million and $0.13 versus a consensus of $91 million, $13.0 million and $0.23, respectively. Management attributed the miss to delays in public infrastructure projects in the U.S., U.K. and Greece, weakness in China and one less working day, Lechem noted.

In response, the company cut staff, which is expected to save about $2 million per year. Despite Q3 weakness, backlog remains strong at 9.3 months of current fee volume, the analyst noted. Management foresees Q4 revenues and EBITDA at all-time record levels (i.e., above previous highs of $88.6 million and $12.9 million, respectively).

Focus remains on cash flow and the dividend. Improvements were made in working capital, providing $2 million towards a total $6 million operating cash flow in Q3, Lechem noted. Partnership distributions are now paid through a DRIP. Management is monitoring the dividend and "will address if needed," but plans no changes for Q4.

IBI's business remains volatile and is impacted by economic conditions in its end-markets. Lechem believes the business is set to weather the downturn but, with Q3 results and added risk, he believes a dividend cut could be a possibility.

IBG is trading down 11.03 percent at $6.45 on Tuesday.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageInitial Jobless Claims Rose Unexpectedly

Claims unexpectedly rose in the latest report through last weekend to breach 300,000 for the first time read on...

article imageAll Quiet on the Record High Front

What can we glean from the media’s lack of attention to the market’s recent record read on...

article imageThe Chip Maker Short Sellers Should Be Watching

Investing in semiconductor stocks is always tricky. Industry cycles can lead to bumps in the road for the read on...

article imageChicago Fed: US Economic Growth Slowed In October

The pace of US growth slowed more than expected in October, according to this morning’s update of the read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

Recent Articles by Balaseshan
More Articles on: Finance , Business Services , Americas , Trading Idea



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.