Raymond James: 'We do not often comment on share buybacks, but FirstService's announcement this morning caught our attention'.

The analyst comments "We do not often comment on share buybacks, but FirstService's announcement this morning caught our attention. The company amended its normal course issuer bid (NCIB) to increase the maximum repurchase authorization to 4.2 mln shares (10% of the public float) from 1.6 mln shares (4% of the public float). Historically, FirstService has made limited use of its buyback program. More recently, however, FSV has repurchased 931,182 common shares at an average price of US$132.38 per share (for a total of US$123 mln). That leaves the firm with the capacity to acquire an additional 3.3 mln shares under the amended NCIB. With the current buyback program set to expire in late August, the increased authorization suggests that FirstService will be active in the market over the next three months. To support this effort, the company also announced an automatic share purchase plan (ASPP) with a designated broker. Management continues to view M&A as its preferred avenue for capital deployment, per last week's acquisition of two small fire protection businesses in Texas and Florida with combined annual revenue of approximately $15–20 mln. That said, large targets continue to command elevated multiples, limiting management's willingness to allocate large sums of money to needle-moving transactions. In that context, we are encouraged to see management directing capital toward what we believe is an undervalued FirstService share price. We recognize that FSV has been slow out of the gate in 2026. However, with an earnings growth profile that we expect to accelerate into the low teens by year-end, more than US$900 mln of dry powder on the balance sheet, and a valuation that screens very favourably on both an absolute and relative basis, we believe the current share price offers investors an attractive entry point into this high-quality business."