On Monday, Canaccord Genuity (TSX:CF) maintained its Hold rating on shares of Surf Air Mobility Inc (NYSE:SRFM) with a price target of $2.20. The firm's analyst has updated the investment model to reflect the company's recent reverse stock split and the subsequent acceptance by the New York Stock Exchange of Surf Air Mobility's plan to regain compliance with listing standards. The company has been given a deadline until November 20, 2025, to meet the exchange's listing requirements.
The updated price target represents an adjustment from the previous target of $1.00, prior to the reverse split. The analyst has also factored in assumptions for a potential capital raise following the reverse split. Despite the new price target suggesting potential upside, the firm has decided to maintain a cautious stance with a Hold rating due to near-term uncertainties facing the company.
The analyst's valuation of Surf Air Mobility is based on a discounted free cash flow (FCF) analysis extending through the year 2030. The method takes into account projected cash flows discounted to present value, which is a common approach in equity valuation to determine a company's worth.
Surf Air Mobility's plan to regain compliance with NYSE listing standards reflects the company's efforts to stabilize its financial and operational standing. The acceptance of this plan by the NYSE is a positive step for the company as it works towards meeting the necessary criteria within the given timeframe.
The announcement does not alter the firm's neutral outlook on Surf Air Mobility's stock in the immediate term. The Hold rating indicates that the firm does not recommend buying or selling the stock at the current price level, given the uncertainties that may affect the company's performance in the near future.
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