IGM Financial: A High Uncertainty Rating Brings Firm More In Line With North American Peers

There was little in narrow-moat IGM Financial's recent investor day that would alter our long-term view of the firm. While we expect to keep our CAD 38 per share fair value estimate in place, we have adjusted our Uncertainty Rating for the firm to High from Medium to better align it with the rest of the North American asset managers. For many of the past several years we've had almost all the asset managers tagged with High Uncertainty Ratings, owing to the increased volatility in both the equity and credit markets, and we expect to keep them there until we see signs of more normalized markets. As for IGM, the firm had been more stable than its peers for some time but has fallen more in line with the group the past year, informing our decision to change the uncertainty rating. We currently view IGM's shares as being slightly to modestly undervalued relative to our fair value estimate based on its new uncertainty rating.