In a report released yesterday, Gary Ho from Desjardins maintained a Buy rating on CareRx, with a price target of C$4.25.
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Gary Ho has given his Buy rating due to a combination of factors that highlight CareRx’s promising growth trajectory and operational efficiency. The company is on track to achieve significant bed growth, with expectations to reach 100,000 beds by the end of 2026, supported by the aging population and long-term care demand. This growth is anticipated to drive revenue and EBITDA improvements, with a forecasted EBITDA margin target of 10% by mid-2026.
Additionally, CareRx’s hub-and-spoke model is enhancing operational leverage, particularly through its Oakville and North Burnaby facilities, which are scaling up to meet higher demand. The company is also actively engaging in share buybacks and has initiated a quarterly dividend, reflecting strong financial health and shareholder value focus. These strategic initiatives, along with a stable leverage position, underpin the Buy rating, with a target price of C$4.25 based on a 7.5x EV/EBITDA multiple.
CRRX’s price has also changed moderately for the past six months – from C$2.860 to C$3.530, which is a 23.43% increase.