BMO Capital analyst Tim Casey has maintained their neutral stance on CJREF stock, giving a Hold rating on October 29.
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Tim Casey has given his Hold rating due to a combination of factors surrounding Corus Entertainment’s financial and operational outlook. The company has announced a recapitalization plan aimed at reducing its debt by approximately $500 million, which is expected to enhance liquidity and financial flexibility. However, despite these positive steps, the outlook for Corus remains challenging due to ongoing difficulties in the traditional media sector, particularly in television advertising, which is affected by macroeconomic uncertainties and competition.
Furthermore, while the recapitalization plan is set to decrease the company’s net debt to EBITDA ratio, existing equity shareholders will face significant dilution, as their shares are expected to represent only about 1% of the new company shares. This dilution, combined with the persistent challenges in the advertising market and the company’s substantial debt load, contributes to the Hold rating. The transaction provides a lifeline but does not fundamentally alter the challenging environment Corus operates in, leading to a cautious outlook.
In another report released on October 29, RBC Capital also maintained a Hold rating on the stock with a C$0.15 price target.