12.21
Outperform, Average Risk, Price Target: $13.00 (prev. $11.00)
RBC CM is assuming coverage of Groupe Aeroplan Average Risk and a one-year target of $13.00. A high quality name within the media sector – RBC CM views Aeroplan as a high quality name within the Canadian media sector reflecting (i) a healthy low-to-mid single digit organic revenue growth outlook; (ii) a strong balance sheet with net debt / adjusted EBITDA of 0.8x; and (iii) significant FCF generation ($1.35/share in 2010E excluding one-time costs). With the stock trading at 8.0x FTM EV/Adjusted EBITDA (excluding one-time costs), RBC CM sees attractive upside in the shares over the next 12 months for five reasons: 1. A favourable point in the cycle to overweight Canadian media stocks 2. Spreading its wings with a new global footprint 3. Escaping the “secular overhang” sector. 4. Data analytics is under-appreciated and 5. Company-specific risks are receding.
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