Goeasy downgraded to Neutral from Outperformer at CIBC

CIBC downgraded Goeasy to Neutral from Outperformer with an unchanged price target of C$160 after reviewing recent developments on the interest rate cap in Canada. The impact of a reduction in the rate cap to 35% is already factored into commercial guidance and priced into the stock, but what concerns the firm “a bit more” is that when the federal government communicated its decision, it also signalled its intention to explore a further reduction to the rate cap with no indication of timing or magnitude, the analyst tells investors. Shares have run up nearly 50% since late October, which suggests “little evidence that public market shareholders are bracing for an adverse outcome,” so the firm views the range of potential outcomes as “skewed asymmetrically negative,” the analyst added.