Power Corporation Mostly as Expected in First Quarter

Power Corporation reported an OK start to 2022. Adjusted net earnings were CAD 617 million, down from CAD 924 million in the year-ago period. However, the bulk of the decline can be entirely attributable to lower adjusted earnings from alternative asset investment platforms as a result of losses and impairments at Power’s Sustainable China portfolio. Absent this, adjusted earnings would have grown. Overall, there was little in the earnings release that would alter our long-term view of the firm, and we will maintain our no-moat rating and fair value estimate of CAD 46.