POW Posts Record Q2 EPS of C$1.55, but Premium-to-NAV Dilemma Persists

What happened

Power Corp reported record Q2 adjusted EPS of C$1.55, up 12% YoY, driven by strong contributions from Great-West Lifeco and IGM Financial, higher portfolio valuations, and a lower share count. The headline beat extends the streak of strong subsidiary performance, notably Great-West’s capital generation and IGM’s flow momentum, but the market already priced these trends in, with the stock hovering near adjusted NAV. Because POW has been repurchasing shares above management’s last disclosed NAV of C$84.54, the buyback engine—a key thesis pillar—now risks being value-destructive rather than accretive. The Q2 results, while impressive, lack new information on the holding-company NAV per share, which remains the ultimate anchor for forward returns and buyback discipline. Without a clear NAV uplift or evidence of buyback restraint when shares trade at a premium, the record earnings alone do not resolve the structural overvaluation flagged in our prior WAIT rating.

Implication

POW’s operating momentum is real, but the investment case now hinges on two hard-to-predict variables: whether management will slow buybacks to protect intrinsic value per share, and whether Q2’s NAV (still undisclosed) has risen enough to restore an adequate margin of safety. Investors should treat this as another strong quarter in a fully-priced story and look for a pullback toward the C$82 entry zone rather than chasing the news.

Thesis delta

The record Q2 EPS reinforces the operational strength of Great-West and IGM, but it doesn’t alter the core concern that POW shares trade at a premium to adjusted NAV. Our WAIT rating stands: the next re-assessment hinges on Q2 NAV disclosure and management’s buyback discipline when the stock is above intrinsic value.