The Globe and Mail reports in its Thursday, Oct. 10, edition that Stifel analyst Justin Keywood is sticking his "buy" call on DRI Healthcare Trust. The Globe's David Leeder writes that Mr. Keywood boosted his unit target by a loonie to $17. Analysts on average target the units at $19.27.
Mr. Keywood says in a note: "[DRI Healthcare] is a portfolio of 25 royalty assets tied to the global pharmaceutical industry. After a period of substantial capital deployment and solid growth quarters recently, a surprise development related to the prior CEO and alleged expense irregularities led to a sharp correction in share price on July 8. We also downgraded the stock at the time with uncertainty of the eventual fall-out of an ongoing investigation. However, our discussions with several members of DRI's executive team and chairman have provided us confidence that the identified $6.51-million (U.S.) in irregular expenses is accurate and several initiatives to improve governance and controls are underway.
We also see limited impact on DRI's revenue and cash flow receipts for 2024 but expect one-time expenses related to the investigation. ... We see additional transactions for DRI as positive catalysts for the stock."
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