Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Analyst Michael Markidis resumed BMO Capital Markets’ coverage of retail REITs,
“We are reinstating coverage of six Canadian Retail REITs. Outperform ratings on Choice Properties REIT (CHP) and Crombie REIT (CRR) reflect our current preference for lower leverage, less onerous near-term debt maturity schedules, and lower capital commitments to active development. Outperform-rated First Capital REIT (FCR) is our pick among the three non-sponsored names, for its emphasis on dispositions, debt reduction, and underlying earnings profile. SmartCentres REIT (SRU), CT REIT (CRT), and RioCan REIT (REI) are rated Market Perform. We believe our call on REI is most at odds with consensus… Retail renaissance. Post-pandemic operating performance has been buoyed by solid in-store sales growth and reinvigorated retailer demand for space. Mounting pressures on the consumer (inflation, higher interest rates, rising unemployment, etc.) may take some of the wind out of the proverbial sail; however, we believe the group is well positioned given portfolio composition, tenant rosters, and relatively limited supply risk”
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RBC Capital Markets head of global commodity strategy Helima Croft previewed the imminent OPEC meeting and the possibility of more crude production cuts,
“On the eve of the delayed OPEC Zoom meeting, the issue of the adjusted 2024 quotas for Angola and Nigeria remains to be resolved. Due to the requirement of unanimous consent for OPEC agreements, solving the Angola and Nigeria production dispute appears to be imperative before the group can move to the topic of additional collective and unilateral cuts for 2024. In many respects, the deadlock appears to be a continuation of the June meeting deliberations and lingering tensions over how that meeting was resolved appear to be bubbling to the surface. Both countries insist that their reductions of 175 kb/d and 360 kb/d, for Angola and Nigeria respectively, impose serious economic costs and undermine their investment plans. .. We still believe it’s likely that the group will be able to reach an agreement by tomorrow that will enable the broader group discussion to commence. One potential scenario could be to table the Angola and Nigeria conversation until early next year in order to allow for additional conversations with secondary source providers. If the holdout issue can be settled, we certainly see significant scope for the group to do a deeper cut”
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Scotiabank analysts Tanya Jakusconek, Ovais Habib, Eric Winmill, Orest Wowkodaw, Ben Isaacson, Patrick Bryden provided top picks in the mining sector in the wake of the company’s major conference,
“OUR TAKE: We hosted over 80 precious, base metals, uranium, fertilizer, and lithium companies for fireside chats, presentations, and investor meetings over two days (November 29/30). ... Our top picks remain AEM [Agnico Eagle Mines Ltd], GOLD [Goldmining Inc.] and KGC {Kinross Gold Corp.] in the senior golds, and AGI [Alamos Gold Inc.] , DPM [Dundee Precious Metals Inc.], EDV [Endeavour mining Corp.], and PAAS [Pan American Silver Corp] in the mid-tier gold space. WPM [Wheaton Precious Metals Corp.] and TFPM [Triple Flag Precious Metals Corp.] are our top streaming picks. For base metals/uranium, our top picks remain TECK.B [Teck Resources] and CCO [Cameco]. Top recommendations in the fertilizer/lithium space are NTR [Nutrien] and SQM [Sociedad Quimica Y Minera S.A. ADR].
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Diversion: “For the first time, we’re seeing views of China’s entire space station” – Ars technica
Scott Barlow