RBC Capital Markets lowers target price on Chesnara

(Sharecast News) - Analysts at RBC Capital Markets slightly lowered their target price on pensions and investment firm Chesnara from 370p to 360p on Wednesday, but raised its operating capital generation forecasts following the firm's FY25 earnings. RBC Capital Markets hiked its FY26/27 OCG forecasts by 9% and 8%, respectively, reflecting Chesnara's new guidance that strengthens dividend coverage to roughly 1.8x, up from around 1.3x.

The Canadian bank said focus can now shift to growth, where balance sheet flexibility and an "extended operating footprint" had positioned Chesnara well to continue sourcing and executing value-accretive M&A, despite recent broader market volatility.

"Trading on a 12m fwd yield of 8.1%, with a sustainable dividend and potential to scale rapidly through further deals, we reiterate our 'outperform' rating," said RBC.

"Our PT decreases to 360p (from 370p), as higher cash gen and 1-yr valuation roll forward are offset by +30bps increase to our discount rate."





Reporting by Iain Gilbert at Sharecast.com