The Globe and Mail reports in its Tuesday edition that TD Cowen analyst David Kwan is sticking with his "hold" recommendation for Enghouse Systems. The Globe's David Leeder writes that Mr. Kwan boosted his share target by a loonie to $17. Analysts on average target the shares at $18. Mr. Kwan believes Enghouse's strong dividend/FCF yields and solid balance sheet offer downside support. However, he cautions that sustained share price appreciation will be challenging due to ongoing negative organic growth and macro headwinds, alongside competitive and artificial intelligence risks. Mr. Kwan says in a note: "AI is creating more uncertainty than opportunities for monetization. Enghouse indicated that the weakness in its contact centre business is not being primarily driven by AI but instead by aggressive pricing from (larger) competitors. That may be true now, but we believe (Gen) AI solutions represent a more material risk to Enghouse from a competitive standpoint but also from a monetization standpoint, as revenue models are evolving away from seat-based licences and management noted the difficulty in monetizing AI in its markets." Mr. Kwan notes that Enghouse's restructuring has led to a "modest" margin improvement.