i3 Verticals price target lowered to $23 from $24 at BMO Capital

BMO Capital lowered the firm’s price target on i3 Verticals to $23 from $24 and keeps a Market Perform rating on the shares. Along its Q1 results last week week, the company announced it is exploring a potential sale of its Merchant Services business, which would leave RemainCo as a software-centric business with minimal leverage, the analyst tells investors in a research note. There is lots to like about i3, including its strong organic/M&A growth trajectory, less cyclical end markets, margin expansion, earnings mix shift, and organic deleveraging, but until now, the firm has not seen a clear catalyst for a re-rating, BMO added.