Monday, December 23, 2024

Onex Rises After Shedding Lone Neutral Rating With TD Upgrade

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(Bloomberg) — Onex Corp. shares are climbing after the Canadian investment firm shed its only neutral rating, with TD Cowen upgrading the stock to buy from hold Monday morning amid blockbuster credit fundraising this year.

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Onex has raised $5.9 billion through Sept. 30, according to its financial statements. That’s “well ahead” of what was forecast at the beginning of the year, TD Cowen analyst Graham Ryding wrote in a client note. He said expectations were for $2 billion to $3 billion.

Exceeding this guidance marks a turnaround for Onex. In 2023, the Toronto-based firm said the fundraising environment was the toughest the private equity industry had ever seen, prompting some executive hiring.

Onex shares rose as much as 5% in Toronto, setting a fresh intraday record of C$116.72 after a record close following earnings Friday. The stock is now a consensus buy with the upgrade from TD, which boosted its target price for the shares to C$140 from C$111.

The shares have climbed 26% over the past two months, and Ryding sees further gains.

“The potential for further portfolio realizations in 2025 if rates migrate lower should support further buyback activity,” he wrote, adding there’s potential for per-share growth in net asset value.

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