MDA stock wins price target raise at Scotia

Scotia Capital analyst Konark Gupta likes what he sees from MDA (MDA Stock Quote, Chart, News, Analysts, Financials TSX:MDA).

As reported by the Globe and Mail, Gupta today called MDA one of his top “soft-landing” ideas for 2024. He characterized where the stock is heading into 2024.

“MDA is one of our top picks this year,” the analyst wrote. “Shares performed the best in our coverage universe in 2023 (up 80 per cent) but have recently underperformed since the market troughed on October 27, 2023. We believe last year’s outperformance was driven mainly by management’s strong execution on growth and margin as well as the mega Telesat Lightspeed contract win (worth $2.1-billion). However, the stock still has room to recover to the 2021 IPO price of $14/sh. We are most attracted to MDA’s significant double-digit growth momentum with relatively steady margins and potential for FCF inflection in 2025/2026 when capex normalizes. In addition, the company is well-positioned to win several more orders to further solidify an already robust backlog with an opportunity pipeline worth $17-billion (and counting).”

Gupta today maintained his “Sector Outperform” rating but raised his price target on MDA from $14.50 to $16.00. As MDA closed Friday at $11.01, the analyst’s target represented a return of 45.3 per cent at the time of publication.