SSB starts TWE at Outperform.
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TWE: Iniating Coverage with 2H Rating, $21 Target Price.
Salomon Smith Barney
Tuesday, August 17, 1999
--SUMMARY:--TD Waterhouse Group--Brokers & Asset Managers
Iniating coverage of TWE with a 2H (Outperform, High Risk) rating, price
target of $21. Outlook for online discount brokerage growth is excellent.
TWE differentiates itself by building and maintaining large branch network
in the U.S. and Canada; target clientele is long-term investors, rather
than traders, but more focus on target clientele is needed for more of a
brand franchise. TWE has grown key variables (accounts, client assets,
revenues) faster than SCH over past 3 years; robust growth should continue
given demographics of U.S./ Canada, low penetration of customer assets,
room for U.S. branch growth. Financial Advisor and International
businesses offer additional attractive growth opportunities. Valuation is
attractive relative to peers, but absolute level of multiples (57x P/E, 25x
EBITDA) implies risk. See our coming launch report on TWE. |
