AGF.B: Steady quarter

Research evidence excerpt

AGF.B: Steady quarter

AGF Management Limited

Target/Upside/Downside Scenarios Investment summary

We rate AGF Outperform as we believe current valuation doesAGF Management Limited

not reflect the company’s strong investment performance

26 125 Weeks 01FEB24 - 24JUN26 track record, capital deployment optionality, and potential

24 TARGETTARGET 23.0023.00 inclusion in the Dividend Aristocrat Index. AGF has started to

20 CURRENTCURRENT 19.6419.64 pivot towards building a Private Markets business, which we

18 have a neutral view on overall driven by lack of scale. AGF

14 trades at a discount P/E multiple vs. peers and in-line with its

12 historical average. We believe a target multiple of 9x P/E is

8 justified, which is slightly above AGF's historical average and

6 at a smaller discount to peers.

6m

4m

2m Key potential catalysts include the following:

2024 2025 2026

F M A M J J A S O N D J F M A M J J A S O N D J F M

A M J i) Further improvements in net sales and better than forecast AGF/B CN Rel. S&P/TSX COMP IDX MA 40 weeks

Source: Bloomberg and RBC Capital Markets estimates for Target equity market performance

Valuation ii) FCF deployment into continued share buybacks and

Our 12-month price target is $23/share, based on applying a potential inclusion in Dividend Aristocrat Index

9x P/E multiple to our forward EPS forecast.

Risks to rating and price targetOur multiple is slightly above AGF’s historical valuation of 8.6x Key potential risks include the following:and below peers driven primarily by lower scale.

i) A significant decline in equity marketsWe believe that our price target and implied total return

support our Outperform rating. ii) Worse-than-forecast net sales performance

Upside scenario iii) Key investment personnel departures (e.g. senior PMs)