FirstService Initiation: Analyst Bullish On Long Term Growth Prospects

RBC Capital Markets analyst Tom Callaghan initiated coverage on FirstService Corp FSV with Outperform Rating with a price target of $165.
The analyst is bullish on the long-term growth prospect of the company, given its strong track record of business execution and efficient management team.
Callaghan believes FSV's diversified business shields it against an unfavorable macroeconomic environment. He also commends FSV's balance sheet flexibility to aid acquisitions.
As per the analyst, FSV's organic growth and bolt-on acquisitions have driven a revenue CAGR of 19% over the last 25 years and an EPS CAGR of 17% (since separation from Colliers International Group Inc. CIGI).
Callaghan projects adjusted EBITDA of $399 million (+13% Y/Y) in 2023, $451 million in 2024 (+13% Y/Y) on expected revenue growth of 11% Y/Y in 2023 and 10% Y/Y in 2024.
The analyst also sees a margin expansion potential, mainly within the Brands divisions, over the medium to longer-term period.
Price Action: FSV shares are trading higher by 1.71% at $145.29 on the last check Wednesday.