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Inside the Market’s roundup of some of today’s key analyst actions

Seeing an improved free cash flow outlook and “compelling” long-term potential, Desjardins Securities analyst Benoit Poirier raised his rating for Bombardier Inc. (BBD.B-T) on Friday, believing its risk/reward profile is increasingly “attractive.”

“We have been impressed by management’s execution of its turnaround plan since the beginning of the pandemic,” he said in a research note. “The business jet sector is supported by strong tailwinds and we applaud management’s disciplined approach with respect to production rates, which should enable the company to successfully deliver on its margin expansion initiatives.”

On Thursday, shares of the Montreal-based business aircraft manufacturer slid 4.3 per cent with the premarket release of its third-quarter financial results, which largely fell in line with Mr. Poirier’s expectations.

Van Praet: Bombardier improves in third quarter, suggesting early results in turnaround effort

He now sees the company’s 2021 FCF guidance “well within reach, paving the runway to turn positive in 2022.”

“Management reiterated its 2021 FCF guidance of better than -US$300-million although the strong FCF performance after nine months of negative US$214-million (vs management’s guidance of better than negative US$300-million) leads us to believe that the guidance is conservative as 4Q is generally the strongest quarter from a FCF perspective (up US$209-million in 4Q20),” he said. “While capex and cash interest costs are expected to be higher in 4Q (vs 3Q), management noted that the current FCF guidance is likely conservative if the level of orders remains strong in 4Q. We now forecast FCF of -US$75-million in 2021, followed by US$228-million in 2022.”

Mr. Poirier also believes Bombardier’s management has remained “disciplined with respect to future production rate increases,” noting: “While management is quite happy with the company’s current backlog (US$11.2-billion) and the level of demand for its products (book-to-bill ratio based on units of 1.7 times in 3Q21 and 1.8 times in 2Q21), it intends to remain disciplined with respect to future production rate increases to ensure that it delivers on its margin expansion ambitions — we applaud management’s strategy, especially in the context of global supply chain issues (not a major challenge at BBD for now). We are also encouraged that aftermarket services were back to 2019 levels in 3Q for the first time since the beginning of the pandemic.”

With that optimistic view, Mr. Poirier moved his recommendation to “buy” from “hold” with a target for its shares of $2.75, rising from $2.25. The average target on the Street is $2.17, according to Refinitiv data.

“Longer-term, we believe the stock could be worth $5.25-plus using a 10-times EV/ EBITDA multiple if management delivers on its 2025 objectives (US$1.5-billion in adjusted EBITDA with a leverage ratio of 3.0 times),” he said.

Other analysts making target adjustments include:

* ATB Capital Markets’ Chris Murray increased his target to $3 from $2.50 with an “outperform” rating.

“Management reaffirmed guidance and issued positive commentary around progress made under its 2021 strategic priorities and end-market demand conditions for the remainder of 2021 and into 2022 with the Company maintaining good visibility around its ability to source materials despite global supply chain challenges,” said Mr. Murray. “With book-to-bill trends continuing to reflect robust end-market demand conditions and Global 7500 deliveries set to increase in Q4/21, we view the Company as well-positioned to meet or potentially exceed full-year guidance while taking positive steps towards its 2025 targets.”

* CIBC World Markets analyst Kevin Chiang to $1.70 from $1.60 with an “underperformer” rating.

“On the back of BBD’s Q3 results, we continue to see a favourable macro environment for the business aviation industry, with the company progressing well along its restructuring plan. That said, we view the company as fairly valued on its 2025 targets,” he said.

* TD Securities’ Tim James to $3 from $2.75 with a “speculative buy” rating.


In response to a 5.9-per-cent drop in share price on Thursday, iA Capital Markets analyst Elias Foscolos raised his rating for Mullen Group Ltd. (MTL-T) to “strong buy” from a “buy” recommendation, seeing “enhanced” upside.

The Okotoks, Alta.-based logistics provider fell following the premarket release of third-quarter results that largely fell in line with Mr. Foscolos’s forecast. Consolidated revenue of $433-million topped both his $408-million and the consensus on the Street of $410-million as its new U.S. & International Logistics segment blew past estimates ($57-million versus $45-million). Those beats were offset by lower-than-expected margins.

“The Company believes that revenue will remain strong, but that inflationary pressures and supply chain bottlenecks will likely put pressure on economic growth and consumer spending going forward,” said Mr. Foscolos. “MTL’s near-term focus will be on integrating acquisitions, managing inflationary pressures, and improving margins.”

Seeing valuation upside to its peers, Mr. Foscolos maintained a $17.50 target for Mullen shares. The average on the Street is $15.77.

“We view MTL’s Q3/21 results as being in line with expectations overall, but we have adjusted our model assumptions based on various puts and takes,” he said. “Our 2022 OIBDA remains largely unchanged, and near the Street low, which we believe is justified as we consider the likelihood of MTL being impacted by inflationary and supply chain headwinds.”

Elsewhere, others making changes include:

* RBC Dominion Securities analyst Walter Spracklin to $14 from $15 with an “outperform” rating.

“Q3 EBITDA was below expectations on weaker Specialized & Industrial Services results reflecting pipeline delays and wage inflation,” said Mr. Spacklin. “We therefore view management’s continued pivot towards transportation and logistics (and away from energy) as a key positive, and the driver behind our positive view on the shares. We expect pricing and demand to pick-up in MTL’s transportation segments reflecting solid consumer spending and tightening capacity. While we tempered our M&A assumption following commentary on high target valuation, we continue to see value in the shares at current levels.”

*Scotia Capital’s Konark Gupta to $16.50 from $17.50 with a “sector outperform” rating.

“We remain positive on MTL following a slight Q3 miss, which negatively weighed on the stock [Thursday] (down 5.5 per cent vs. TSX up 1.2 per cent),” he said. “While Q3 highlighted incremental margin headwinds, some of which are likely to stick around, we continue to see MTL as a strong top-line growth story into 2022 with a more diversified portfolio, relatively steady margins, and attractive valuation (including an enviable FCF yield). The company also remains well-positioned to make more accretive acquisitions with good access to liquidity (plus headroom on leverage) and strong FCF generation, which could once again prove expectations conservative over time. Investors should also expect incremental returns (dividend and/or buybacks) should M&A activity slow down. We would take advantage of stock’s weakness ahead of the upcoming catalysts, including 2022 business plan (around Dec. 9) and next acquisition (potential for within 3-6 months). Buyback could lend some support in the immediate term.”


Raymond James analyst Frederic Bastien deemed Aecon Group Inc.’s (ARE-T) third-quarter results as “good ... with an asterisk.”

“We are constructive on Aecon Group based on its commanding position in Canada’s utilities, urban transit and nuclear refurbishment sectors, strong financial position, and attractive dividend yield,” he said. “We also believe that ARE offers some of best return potential within our coverage universe, but in response to a contractual dispute flaring up on the Coastal GasLink Pipeline project, we can no longer justify a Strong Buy recommendation on the stock.”

With that view, he lowered his rating for its shares to “outperform” from “strong buy.”

With the results, Aecon announced late Thursday that its joint venture with RB Somerville, SA Energy Group, has “commenced an arbitration to resolve matters including, but not limited to, significant scope changes, delays, and COVID-19 impacts on the Coastal GasLink Pipeline project, which could result in a material impact to Aecon’s earnings, cash flow, and financial position if not resolved favourably in a timely manner.”

“As we understand it, the project owner instructed SAEG to carry out a material change order without agreeing on the price for that work, and without making any additional payments to cover the increased costs. At issue is RB Somerville’s inability to continue funding its share of the cash flow requirements beyond 1Q22 should the situation not improve, at which point ARE’s obligation to fund further shortfalls would double. We do not know how this commercial dispute will shake out, but one would think Aecon holds the big end of the stick given today’s tight labour market and rising gas prices.”

Mr. Bastien maintained a $26 target for Aecon shares, exceeding the $23.96 average.

Elsewhere, deeming the results “solid,” Canaccord Genuity analyst Yuri Lynk raised his target to $25 from $23 with a “buy” rating.


Canaccord Genuity analyst Dalton Baretto sees Lundin Mining Corp. (LUN-T) “at an inflection point,” expecting “strong” fourth-quarter financial results and “a potential positive guidance surprise in early December as Chapada hits its stride, engineering work at Candelaria bears fruit, and ZEP nears completion.”

Accordingly, he raised his rating for the Toronto-based miner for “buy” from “hold.”

On Thursday, Lundin shares rose 4.4 per cent in response to the release of third-quarter financial and operating results after the bell on Wednesday that “modestly” fell below Mr. Baretto’s projections.

Revenue for the quarter of $756-million fell below both his $784-million estimate and the consensus forecast on the Street of $792-million, due largely to lower sales volumes and realized copper pricing. Adjusted earnings per share of 23 cents also missed projections (28 cents and 26 cents, respectively).

Concurrently, the company maintained its production and cost guidance and reiterated its Neves-Corvo Zinc Expansion Project (ZEP) remains on track.

“LUN exited Q3 with $428-million in cash, no debt, and its strongest expected operating quarter ahead of it,” said Mr. Baretto. “The company has returned $211 million (36 cents per share) to shareholders year-to-date via a combination of regular dividends, special dividends and buybacks. Given the commodity price environment and a lack of meaningful capital programs on the horizon, we expect shareholder returns to ramp up in 2022 – we currently estimate regular and special dividends to total 65 cents per share in 2022, implying a 6.5-per-cent yield at the current share price.”

Mr. Baretto maintained a target of $12.50 per share. The average is $12.87.

Elsewhere, JP Morgan’s Patrick Jones increased his target to $12.20 from $11.90, keeping an “overweight” recommendation.


While its third-quarter results topped his forecast, Raymond James analyst Andrew Bradford lowered his recommendation for Trican Well Service Ltd. (TCW-T) to “outperform” from “strong buy” in response to recent share price gains.

After the bell on Tuesday, Trican reported earnings before interest, taxes, depreciation and amortization of $32-million, in line with Mr. Bradford’s Street-high $33-million estimate and exceeding the Street’s $29-million forecast.

“Despite the beat, the market essentially shrugged; with the stock off just a few cents from its Tuesday pre-reporting close,” he said. “As we near the end of the 2021 E&P budget cycle, field activity is flattening-out to a degree; this is to be expected. However, as new 2022 budgets are floated into the public domain in late November and early-December, we should expect some capital program increases.

“We believe this will be particularly important for Canadian fracturing companies as the cost of equipment reactivations are relatively high and will require additional compensation through price increases. For this reason, we have an upward bias on our formal 2022 outlook.”

With that view, Mr. Bradford increased his target for Trican shares to $4.20 from $4.15. The average is currently $4.17.


Waste Connections Inc.’s (WCN-N, WCN-T) “strong” third-quarter results and a “healthy” raise to its full-year guidance reaffirm its “ability to execute amidst an uncertain and constantly changing industry/macro backdrop,” according to RBC Dominion Securities analyst Walter Spracklin.

“Actions taken by management earlier this year (primarily through the implementation of price increases) paid dividends during Q3/21 and helped to mitigate inflationary and supply chain pressures that impacted peers and other players in the industry during the quarter,” he said. “Importantly, while these headwinds impacted peers in the industry, we note that WCN was able to manage through without issue.”

On Thursday, Waste Connections shares rose over 1 per cent in Toronto following the premarket release of better-than-anticipated third-quarter results. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 17 per cent year-over-year to US$506-million, topping guidance of US$495-million as well as the US$498-million estimate of both Mr. Spracklin and the Street. He attributed the beat to “solid” pricing and better-than-expected volumes, both of which topping the company’s projections.

“WCN increased their full-year guidance for the second straight quarter following strong Q3/21 results, with virtually all key metrics coming in ahead of our and consensus expectations,” said Mr. Spracklin. “As has been the case with their prior guides, the updated full-year outlook assumes no contribution from M&A not yet completed and no improvement in the current macro – which to us embeds a degree of conservatism and areas for potential upside.

“The company also provided some helpful detail on their Q4/21 outlook, with pricing growth expected to reach 5.5 per cent year-over-year and M&A growth expected to maintain similar (or better) contribution levels to what we saw in Q3 (up 4.8 per cent year-over-year). We see these top-line assumptions boding considerably well for next year’s outlook and further reinforce our view that the pricing and M&A environment should remain robust in the near-to-medium term.”

After raising his full-year 2021 and 2022 estimates to align with guidance changes, Mr. Spracklin increased his target for Waste Connection shares to US$147 from US$139 with an “outperform” rating. The average on the Street is US$145.64.

Elsewhere, CIBC World Markets analyst Kevin Chiang increased his target to US$145 from US$140 with an “outperformer” rating.


Thinking it’s “just the right moment to get involved,” Benchmark analyst Daniel Kurnos initiated coverage of WildBrain Ltd. (WILD-T) with a “buy” recommendation, seeing the streaming landscape as an “ideal setup”

“WildBrain is, in our view, the last standalone public portfolio of premium quality kids’ content, owning a 40-per-cent stake in Peanuts, as well as other well-known titles such as Yo Gabba Gabba and Teletubbies,” he said. “In total, WildBrain features a library of 500 brands (estimated 2/3 owned), significantly differentiating them from other libraries and AVOD/SVOD players. Furthermore, while WildBrain does generate revenue from production, licensing and distribution, the real growth opportunity should come from 1) significantly enhancing the ad yield on and the distribution of their AVOD (WildBrain Spark) network, which reaches 1-in-3 kids globally on YouTube; and 2) growing their consumer products (CP) division, underpinned by new content and merchandising under the Peanuts brand plus activating their long runway of other IP. We expect industry drive to migrate additional content behind paywalls creating an incremental dearth of quality content, especially in the highly desirable kids’ arena, further increasing WildBrain’s IP value and ultimately, we would suspect, leading to a takeout.”

Mr. Kurnos set a target of $6 per share, exceeding the $4.09 consensus on the Street.


Following a site visit to its flagship Keno Hill silver project in the Yukon, Canaccord Genuity analyst Kevin MacKenzie raised his rating for Alexco Resource Corp. (AXU-T) to “speculative buy” from “hold.”

“Following a longer-than-expected permitting/development period, Alexco is now emerging as the next high-grade silver producer within the industry,” he said. “Once steady state has been achieved over multiple successive quarters, we expect that Alexco will trade at a premium to peers given Keno Hill’s (1) safe operating jurisdiction, and (2) peer leading % silver production.”

His target for the Vancouver-based miner’s shares remains $3.25. The average is $3.75.


In other analyst actions:

* Following the announcement of CAE Inc.’s (CAE-T) US$392.5-million acquisition of Sabre Corp.’s AirCentre airline operations portfolio, Desjardins Securities analyst Benoit Poirier raised his target for its shares by $1 to $41 with a “hold” rating.

“The strategic rationale for the acquisition is sound in our view, as it should enable CAE to meaningfully expand its presence in crew management optimization solutions (limited presence previously),” he said. “The strong margin profile of the acquired assets should bode well for CAE’s future expansion in this market. We have incorporated the acquisition into our forecast, which boosted our target price to $41 (from $40). We prefer to remain on the sidelines while waiting for additional details on the recovery.”

* In response to its “solid” financial results and a return of its capital framework, including a monthly base dividend of 0.83 cents, Desjardins’ Chris MacCulloch bumped up his Tamarack Valley Energy Ltd. (TVE-T) target to $5.50 from $5 with a “buy” rating. The average is $5.06.

“There is no question that equity markets are placing a greater emphasis on shareholder returns than ever before. From our perspective, [Wednesday’s] announcement was a critical step toward TVE’s ability to compete for capital vs its larger peers,” he said.

* Evercore ISI analyst Mark Mahaney raised his Shopify Inc. (SHOP-N, SHOP-T) target to US$1,770 from US$1,575 with an “in line” rating, while Susquehanna’s John Coffey cut his target to US$1,700 from US$1,800 with a “positive” rating and Mizuho’s Siti Panigrahi lowered his target to US$1,400 from US$1,500 with a “neutral” rating. The average on the Street is US$1,685.98.

* IA Capital Markets analyst Elias Foscolos increased his target Canadian Utilities Ltd. (CU-T) to $39 from $38, exceeding the $37.19 average, with a “buy” rating.

“CU’s Q3/21 EPS was in line with our forecast, reinforcing our constructive outlook. CU continues to progress its investment strategy, with several near-term energy transition projects expected to commence operations in Q4/22, providing earnings growth upside beyond our short-term forecast horizon. We reiterate our Buy rating, as we believe that CU’s discount relative to peers is unduly wide as the Company is likely receiving minimal credit for its non-regulated energy transition growth potential. We also believe CU is favourably positioned from an FX standpoint relative to U.S.-focused peers, as we expect further relative strength for the Canadian dollar.”

* Mr. Foscolos also raised his Pulse Seismic Inc. (PSD-T) to $2.70, matching the consensus, from $2.50 with a “speculative buy” recommendation.

“PSD’s better-than-expected Q3/21 results reflected improving industry fundamentals, which enabled the Company to retire all of its debt post quarter-end,” he said. “As a result of improving near-term fundamentals and a clean balance sheet, the Company has reinstated a 5-cent annual dividend (paid quarterly) along with a special 4-cent dividend. Finally, the Company also plans to augment shareholder returns by reintroducing its NCIB. Consequently, we have boosted our outlook for 2022, resulting in a revised $2.70 target price.”

* CIBC’s Stephanie Price increased her Telus International Inc. (TIXT-N, TIXT-T) target to US$45 from US$39.95, topping the US$36.38 average, with an “outperformer” rating.

“We expect the focus on the Q3 call will be on the business environment, with TELUS International (TI) recording mid-teens constant-currency organic growth in Q2 with strong demand in its core Tech & Games vertical and growing demand in the E-commerce and Fintech vertical. TI ended Q2 with an opportunity pipeline of over $2-billion. The company is seeing demand for its Content Moderation offerings from a customer base that is concentrated in high-growth verticals (44 per cent of revenue from Tech & Games). We foresee opportunities to expand the Content Moderation business outside of the social media industry and to cross-sell data annotation services.,” she said.

* Ms. Price increased his Constellation Software Inc. (CSU-T) target to $2,400 from $2,200, exceeding the $2,328.67 average, with an “outperformer” recommendation.

“Constellation has posted record M&A spending in 2021 and we expect the M&A strength to continue in Q3, with Constellation subsidiaries announcing 24 deals in the quarter. We expect that M&A spend will be a focus on the quarterly call, in addition to EBITDA margins. Margins in Q2 were 140 basis points below consensus and down 220 bps year-over-year. These margin results were an outlier as the majority of companies under our coverage continued to see margin expansion. We believe that the reduced margins were a function of M&A transaction and restructuring costs and expect that Constellation could continue to face margin pressure in the near term as it integrates recent deals,” said Ms. Price.

* Citing increased near-term free cash flow generation, CIBC’s Hamir Patel raised his target for Canfor Corp. (CFP-T) target by $1 to $36 with an “outperformer” rating. The average is $40.17.

“As one of the largest lumber producers in North America and Europe, Canfor is well positioned to benefit from the strong U.S. housing market for both new home construction and R&R, as well as growth opportunities in Europe,” he said.

* CIBC’s Dean Wilkinson raised his Morguard North American Residential Real Estate Investment Trust (MRG.UN-T) to $22 from $21 with an “outperformer” rating, while RBC’s Matt Logan moved his target to $22 from $21 with a “sector perform” rating. The average is $20.70.

“Morguard North American Residential REIT’s Q3 results were in line with our expectations,” said Mr. Logan. “In the U.S., demand remains robust, particularly in the Sun Belt, while Canadian demand has started to inflect higher as the economy reopens. Looking ahead, we think the business is well-positioned for 2022–23 with continuing strength in MRG’s U.S. assets and improving visibility in Canada. That said, we see few catalysts (aside from fundamentals) to meaningfully close the 40-per-cent discount to NAV in the near-term.”

* Raymond James analyst Steve Hansen increased his Nutrien Ltd. (NTR-T, NTR-N) target to US$95 from US$92, maintaining an “outperform” rating. The average is US$77.31.

“We are increasing our target price on Nutrien ... based upon a sustained rally in global NPK prices that’s driven several key benchmarks to decade highs in recent months,” he said. “While robust crop fundamentals have played a central role in this rally, it has been a string of unexpected supply concerns, rapidly dwindling inventories and, most recently, the tremendous surge in energy-linked feedstock costs that’s added significant fuel to the fire, most notably in nitrogen markets. By almost all accounts, these are extraordinary times. We expect Nutrien’s earnings and free cash flow to also push extraordinary levels, ultimately demonstrating the true power of the Agrium – Potash Corp. merger in 2018.”

* Raymond James’ Brian MacArthur cut his Champion Iron Ltd. (CIA-T) target to $7.25, or 3 cents below the consensus, from $7.50 with an “outperform” rating.

“We believe CIA offers investors good exposure to premium iron ore through its Bloom Lake asset, which is a long-life, lower-cost asset producing high-grade iron ore concentrate (~66% Fe) located in Quebec, Canada, a lower-risk jurisdiction,” he said. “In addition, we believe there is potential for near-term growth through its Bloom Lake Phase 2 expansion project at favourable capital costs, given the previous owners spent significant capital. Given CIA’s exposure to premium iron ore, high-quality asset, growth potential, and low jurisdictional risk, we rate the shares Outperform.”

* Raymond James’ Jeremy McCrea increased his target for Crew Energy Inc. (CR-T) to $4.75 from $4.25, topping the $3.88 average, with an “outperform” rating.

“CR put out a rather impressive operations update, which unfortunately, given the timing on a busy 3Q reporting day, seemed to be missed by the market,” he said. “The importance of the ‘exploration’ Montney well results and clean-up disposition of its legacy heavy oil assets could be marked as the final milestone needed for the company to really begin attracting broad institutional interest. When combined with strengthening gas prices, a materially improved leverage position and among the highest growth rate in the E&P sector, there is increasingly a lot to like with Crew. We suspect that when Crew begins marketing its story post-3Q and investors begin looking for names that have yet to see their valuation run, we will begin to see interest build.”

* JP Morgan analyst Matthew Boss increased his Lululemon Athletica Inc. (LULU-Q) target to US$570 from US$500, topping the US$458.11 average, with an “overweight” rating.

* JP Morgan’s Patrick Jones raised his First Quantum Minerals Ltd. (FM-T) target to $29 from $27 with a “neutral” rating. The average is $33.24.

* National Bank Financial analyst Maxim Sytchev raised his North American Construction Group Ltd. (NOA-T) target to $27 from $25 with an “outperform” rating. The average is $24.90.

* National Bank’s Gabriel Dechaine increased his targets for Sun Life Financial Inc. (SLF-T, “outperform”) to $78 from $73 and IA Financial Corp. Inc. (IAG-T, “outperform”) to $86 from $80. The averages on the Street are $74.38 and $83.94, respectively.

* National Bank’s Jaeme Gloyn cut his Intact Financial Corp. (IFC-T) target to $209 from $212, exceeding the $196.85 average, with an “outperform” rating.

* National Bank analyst Vishal Shreedhar initiated coverage of Pet Valu Holdings Ltd. (PET-T) with a “sector perform” rating and $33 target. The average is $33.25.

* Scotia Capital analyst Himanshu Gupta raised his Granite Real Estate Investment Trust (GRT.UN-T) target to $104 from $100 with a “sector outperform” rating. The average is $100.20.

* Scotia’s Mario Saric increased his target for Allied Properties Real Estate Investment Trust (AP.UN-T) to $53 from $52.50, exceeding the $50.96 average, with a “sector outperform” rating.

* Scotia Capital’s Justin Strong increased his Anaergia Inc. (ANRG-T) target to $29 from $26.50, reiterating a “sector outperform” rating. The average is $31.60.

“Anaergia is set to develop one of the world’s largest anaerobic digestion facilities,” he said. “This facility will be located in Denmark, use agricultural waste as feedstock, and have nameplate capacity of 3,800 MMBTU/day. ANRG anticipates the project will achieve an unlevered pre-tax IRR that is in the low-double digits. This announcement (and the two other updates outlined below) gives us, and should give the market, incremental confidence in the company’s ability to achieve its growth targets.”

* Scotia’s Tanya Jakusconek cut her Agnico Eagle Mines Ltd. (AEM-N, AEM-T) target to US$87 from US$88 with a “sector outperform” rating. The average is currently US$77.33.

“Q3 was in line with expectations, and the company is expecting a stronger Q4 operationally (higher production at lower costs). Inflationary pressure in the industry will impact 2022 costs (we have adjusted our costs upward by 3 per cent including 2023) and made some adjustment to grades in the Nunavut platform. As a result, our NAV and target price declined by $1 per share. Moving forward, the focus is on the KL merger, with the information circular expected on November 1 and shareholder votes on November 26,” she said.

* Scotia’s Benoit Laprade raised his Acadian Timber Corp. (ADN-T) target to $18.25 from $17.50 with a “sector perform” rating. The average is $18.45.

“We continue to expect the solid lumber and housing fundamentals to support robust softwood sawlog demand, while LPX’s Houlton mill conversion to siding should improve regional hardwood pulp markets in Maine,” he said.

* Stifel’s Robert Fitzmartyn became the first analyst on the Street to initiate coverage of Rubellite Energy Inc. (RBY-T), giving it a “buy” rating and $4 target.

“Rubellite Energy is a newly formed public Canadian E&P growth vehicle spun out of Perpetual Energy and focused on the Clearwater heavy oil play of north central Alberta,” he said. “It is managed by the existing Perpetual Energy management team with high insider ownership. We offer a $4.00 per share target price on an ambitious growth forecast that is very early stage and hence will carry some risk, though we expect the market to remain optimistic, given the breadth of its inventory position and management’s extrapolation that it could grow organically to a 5,000-7,500 bbl/d level with assets in hand at this juncture.”

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