WeWork will get Chubby score in new protection at Cantor on money circulate potential (NYSE:WE)

Cantor Fitzgerald analyst Brett Knoblauch initiated protection of the versatile workspace firm with an Chubby score on Monday as traders could have given the corporate brief shrift attributable to its “a lot scrutinized historical past.”

That “creates an uneven threat/reward alternative at present ranges,” he wrote in a notice to shoppers.

As the corporate nears the tip of a cost-cutting and actual property footprint discount plan, Knoblauch believes the market is ignoring WeWork’s (NYSE:WE) money era potential. The corporate has already slashed $2.7B in prices and stands to profit from sturdy demand for versatile workspace after the pandemic.

“Additional value cuts mixed with income development end in our view that WeWork might generate $1.19/share in FCF (free money circulate) in 2027E,” he mentioned.

The inventory’s present weak point is probably going attributable to its near-term debt maturities and traders’ considerations about its capability to repay or lengthen its debt maturities. “In our view, WeWork (WE) will have the ability to lengthen debt maturities such that it might ladder debt repayments starting in 2025E,” Knoblauch mentioned. The largest near-term catalyst for WE shares is an announcement on about extending debt maturities, he added.

WeWork (WE) shares have dropped 1.9% in early Monday buying and selling.

Knoblauch’s Chubby score clashes with SA Quant score of Sturdy Promote, which assigns poor grades for profitability and momentum. It aligns with the typical Wall Avenue score of Purchase.

WeWork (WE) will launch its Q3 earnings earlier than the open on Nov. 10. The corporate’s inventory slumped after its Q2 outcomes missed Wall Avenue expectations.