Analysts Feel Quebecor World Sell-Off is Overdone

The recent sell-off for shares of Quebecor World Inc. (IQW) was an overreaction to the company’s tender offer for its senior notes, says UBS Securities’ Eric Mencke.

Investors may be worried that Quebecor may trip its debt covenants, but management is confident these can be re-established, the analyst told clients in a note.

The struggling commercial printer had another money-losing quarter, but earnings per share did come in line with second quarter estimates at UBS.

Mr. Mencke expects the company will start to see the benefits from its plant retooling program in the second half of the year.

He continues to rate the company’s shares a “buy,” while lowering his price target by C$1 to C$14.50.

IQW 1-yr chart: