- RBC Capital Markets analyst Tom Callaghan initiated coverage on FirstService Corp (NASDAQ:FSV) with Outperform Rating with a price target of $165.
- The analyst is bullish on the long-term growth prospect of the company, given its strong track record of business execution and efficient management team.
- Callaghan believes FSV’s diversified business shields it against an unfavorable macroeconomic environment. He also commends FSV’s balance sheet flexibility to aid acquisitions.
- As per the analyst, FSV’s organic growth and bolt-on acquisitions have driven a revenue CAGR of 19% over the last 25 years and an EPS CAGR of 17% (since separation from Colliers International Group Inc. (NASDAQ: CIGI)).
- Callaghan projects adjusted EBITDA of $399 million (+13% Y/Y) in 2023, $451 million in 2024 (+13% Y/Y) on expected revenue growth of 11% Y/Y in 2023 and 10% Y/Y in 2024.
- The analyst also sees a margin expansion potential, mainly within the Brands divisions, over the medium to longer-term period.
- Price Action: FSV shares are trading higher by 1.71% at $145.29 on the last check Wednesday.
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