Wedbush Downgrades MDC Partners (MDCA) to Neutral; Growth Guide and Confidence in Management Cut by Half
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Wedbush downgraded MDC Partners (NASDAQ: MDCA) from Outperform to Neutral with a price target of $8.00 (from $20.00), as guidance and confidence in management cut in half. Also management suspended the dividend, to improve cash retention by ~$11m per quarter, for improved liquidity, deleveraging and investment in growth.
Analyst James Dix commented, "... downgrading to NEUTRAL from OP on lack of business visibility and risks from execution and financial strategy. To 3Q’s miss, third guide cut this year and vanishing net new business, MDCA added strategy changes to address short-term shortfalls in performance, but calling into question the underlying competitive position of the company and/or its portfolio. Going forward, we see further risks from execution and changes in capital structure (e.g., dilution)."
Shares of MDC Partners closed at $8.40 yesterday.
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