On Monday, RBC Capital Markets adjusted its financial outlook for Colliers International (NASDAQ:CIGI) stock, raising the price target on the company’s shares to $174.00, up from the previous target of $160.00. The firm maintained its Outperform rating on the real estate services and investment management company.
The update from RBC Capital comes amid considerations of Colliers International potentially spinning off its Investment Management (IM) business into a separate publicly traded entity in the future.
While RBC Capital does not anticipate an immediate spin-off nor is aware of any active plans for such a move, it suggests that the concept could be gaining momentum.
This speculation is based on the high valuation multiples seen in both public comparable companies and private market transactions, coupled with Colliers’ aspirations to expand its IM business.
RBC Capital sees potential benefits and growth opportunities for Colliers if a spin-off were to occur. The firm references the successful precedent set by Colliers’ own previous spin-off from FirstService Corporation (NASDAQ:), which could serve as a strategic model for the IM business.
The new price target of $174.00 represents a 9% increase from the previous target, reflecting RBC Capital’s confidence in a higher valuation multiple for Colliers International, regardless of whether a spin-off takes place. This adjustment underscores the firm’s positive outlook on the company’s future financial performance and growth prospects.
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