CA - Fairfax Financial raised to Outperform at BMO on better earnings visibility
- BMO Capital Markets analyst Tom MacKinnon upgraded Fairfax Financial Holdings ( OTCPK:FRFHF ) stock to Outperform from Market Perform as certain tailwinds enhance the company's growth prospects.
- Going forward, MacKinnon expects Fairfax's ( OTCPK:FRFHF ) earnings growth to be driven by more reliable and higher quality sources than gains from its investment portfolio, for instance.
- Those items, which are set to improve earnings visibility, include "strong underwriting income on hard market conditions, stronger interest income as FFH puts its cash to work, rebounding earnings from associates/ subsidiaries on improving market conditions," he wrote in a recent note.
- The sources together account for 93% of the Canadian company's estimated 2023 and 2024 pre-tax earnings, compared with the 40%-50% those items accounted for over the last decade, the analyst added. "This is clearly a positive."
- Analysts have increased their expectations for Fairfax's ( OTCPK:FRFHF ) fiscal Q4 FY2022 earnings by 37.8% in the past six months. At the same time, revenue expectations for FQ4 have also climbed 13.03%.
- For its fiscal Q3, Fairfax's ( OTCPK:FRFHF ) earnings and revenue topped Wall Street expectations .
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Fairfax Financial raised to Outperform at BMO on better earnings visibility