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

With supply chain issues and inflationary “challenges” lingering with the COVID-19 pandemic, National Bank Financial analyst Michael Robertson sees a “supportive commodity price backdrop moving forward” for TSX-listed diversified industrial companies with exposure to the energy industry.

“As we enter year three of a world disrupted by COVID-19, we are optimistic the recent surge in global case counts will speed a transition from pandemic to endemic in 2022, hopefully setting the table for a less volatile year ahead and a return to some semblance of normalcy in our daily lives,” he said. “While our crystal ball refuses to illuminate the future trajectory of COVID-19, what we can see clearly in 2022 are several ripples lingering in the wake of the pandemic, including disrupted supply chains, inflationary pressures, and a tight labour market (expected to persist through the early innings of the year, at minimum). We see widespread implications from those challenges with our management teams implementing a variety of counter measures to mitigate negative impacts where possible, across our diverse coverage list.”

“With the Bank of Canada commodity price index up significantly relative to recent historical levels, we see a supportive backdrop in 2022 for our names under coverage with segments exposed to oil and gas industry activity levels, including (to varying degrees) CEU, EFX, GIP, PSI, MTL and SCL. Similarly, strength in grain prices continues to offer support for farmer income levels facing inflationary headwinds related to input costs (with AFN’s backlog at record highs entering 2022). While we suspect rising input costs (be it related to labour, fuel or raw materials) will continue to impact the majority of our coverage space in the early quarters of 2022, we note that in most cases we expect inflationary pressures to be passed on in the form of higher prices with little more than a transitory impact on margins.”

In a research report released on Friday, Mr. Robertson made a pair of rating changes to companies in his coverage universe.

Following a recent share price appreciation, he lowered CES Energy Solutions Corp. (CEU-T) to “sector perform” from “outperform” with an unchanged $2.85 target. The average on the Street is $3.30.

“Despite a still constructive outlook, we are taking our foot off the gas on the back of CEU’s recent impressive share price performance ... CEU took proactive measures in 2021 to minimize exposure to raw material shortages and commodity chemical price increases, strategically investing in inventory throughout the year to secure supply for customers on both sides of the border with opportunistic purchases,” said Mr. Robertson. “While cost increases related to certain input products and labour could not be avoided, CEU has been able to largely offset margin erosion with targeted price increases while maintaining ample supply and sufficient levels of staffing (despite the challenges of a highly competitive labour market with a significant portion of the workforce exiting the industry during the downturn). We view CEU as relatively well-positioned to weather supply chain disruption and inflationary pressures, leveraging the company’s counter-cyclical balance sheet to opportunistically secure critical inventory as well as advantages related to manufacturing many products in-house and being less reliant on external suppliers. Management has highlighted expectations for an industry shortage of key products in Q1 of 2022 in Canada, but owing to the proactive inventory procurement CEU anticipates sufficient inventory levels on the ground to get through the busy Canadian winter.”

The analyst raised Enerflex Ltd. (EFX-T) to “outperform” from “sector perform” following its recently announced acquisition of Exterran Corp. (ETXN-N). He kept a $10.75 target, which falls below the $11.28.

“We continue to view the proposed transaction positively from a fundamental perspective, offering enhanced scale (roughly doubling adj. EBITDA), improved efficiency, a more global presence and recurring revenue growth,” he said. “

“With our target implying an attractive 60-per-cent return following the post-announcement pullback in EFX share price, we upgrade to Outperform.”

Concurrently, Mr. Robertson said Mullen Group Ltd. (MTL-T, “outperform” and $16.50 target) and Shawcor Ltd. (SCL-T, “outperform” and $8.50 target) and Green Impact Partners Inc. (GIP-X) offer “the most appealing risk/reward balance.”

Mr. Robertson hiked his target for Green Impact to $12 from $9, exceeding the $10.30 average, with an “outperform” rating, citing “the recent development progress in GIP’s initial clean energy projects and the potential to sell equity stakes in the company’s development projects at Notice to Proceed, helping bridge the funding gap between GIP’s readily available dry powder and the company’s multi-billion-dollar portfolio of development projects.”

He added: “We highlight Mullen and Shawcor as our top picks at present owing to what we perceive as attractive valuations coupled with stable leverage profiles. While MTL is not immune to inflationary pressures surrounding labour, fuel and maintenance expenses, we view the company as relatively well-positioned in our coverage to pass through cost increases. We continue to highlight Shawcor as a deep value pick given the transformative changes SCL has implemented over the past two years, right-sizing the company’s global footprint and expanding business lines best positioned for growth. Lastly, while more speculative given a limited operating history, we continue to highlight considerable upside potential in Green Impact Partners’ [GIP-X] shares as the company progresses development of several clean energy projects.”


Following a “mixed” fourth quarter of 2021, National Bank Financial analyst Travis Wood sees Suncor Energy Inc. (SU-T) in a strong position to exhibit operational improvement this year.

“We believe Suncor remains in the penalty box, operationally speaking, and is now in year three of working towards execution improvement,” he said. “With the second train now in operation at Fort Hills and expectations of 90-per-cent average utilization for 2022, the stage is set to deliver volumes within budget, and more importantly, safely. We will wait and see if improvement unfolds in 2022 and remain skeptical, given operational issues seem to have emerged later in the year.”

Shares of the Calgary-based company fell 3.5 per cent on Thursday following the premarket earnings release and update on recent incidents that occurred at Syncrude and Firebag.

Average production rose 6 per cent from the third quarter to 743,300 barrels of oil equivalent per day (boe/d), falling in line both the forecasts of both Mr. Shine and the Street (752,700 and 751,000, respectively). Cash flow per share jumped 21 per cent (and 135 per cent year-over-year) to $2.16, also meeting estimates ($2.13 and $2.15).

“Given the lackluster operational performance over the last couple of years, coupled with what seemed to be a solid Q3/21 heading into 2022, we felt cautiously optimistic that Suncor was nearing the early stages of an operational turnaround,” said Mr. Shine. “Although the recent downtime is minor on a production base for 2021, we believe the major issue is the fact that annual operational issues seem to be ongoing, leaving us unenthused about how quickly production can be restored at major facilities. As a result of further operational slips, we reiterate our Sector Perform rating and believe Suncor will continue to lag its peer group on a total return basis and suspect major changes will be required to right the ship in regard to the company’s operational and safety culture.”

With his “sector perform” recommendation, the analyst cut his target by $1 to $52. The average on the Street is $43.

“Although Suncor trades at a discount relative to its historical valuation, we believe this has been efficiently earned since 2019 and don’t yet see a scenario for multiple expansion until several quarters of unencumbered execution are met (again, safely). Since our 2019 downgrade and despite a couple of one-off strong quarters, the overall change in operational momentum has yet to be captured,” he said.

Elsewhere, JP Morgan analyst Phil Gresh downgraded Suncor to “neutral” from “overweight” with a $38 target, down from $42, while Wells Fargo’s Roger Read raised his target to $42 from $38 with an “overweight” rating.

“A combination of profit taking and downward Q1 volume guidance resulting from outages (unplanned and planned and accelerated) likely drove [Thursday’s] share price retreat, in our view,” said Mr. Read. “In spite of near-term weather-related production impacts, our long-term outlook for SU remains positive.”


Following the release of in-line quarterly results, Desjardins Securities’ Jerome Dubreuil called BCE Inc. (BCE-T) “an excellent ‘sleep well at night’ stock with a strong dividend yield and solid recent execution.”

Posadzki: BCE targets 5% revenue growth this year even as Omicron uncertainty weighs in some areas

However, though he thinks its “dividend growth model should be around for a while” after a 5-per-cent raise and seeing “significant runway” for additional increases, the analyst said he continues to prefer other opportunities in the sector, believing BCE offers “relatively low growth at a relatively high valuation.” It remains at the bottom of his pecking order.

“We expect the share price outperformance of RCI and T could dwarf the dividend yield gap with BCE, in part due to T’s higher sensitivity to interest rates,” Mr. Dubreuil said. “Moreover, BCE’s elevated exposure to legacy landline and B2B services (which face increasing competition from cloud giants) should lead to weaker-than-peer growth for several years.”

He added: “BCE’s share price is often seen as having a relatively high negative correlation with interest rates due to its bond-like profile (predictable dividends, relatively low risk). We have reviewed market activity over the last 10 years to see if this perception is aligned with reality ... BCE and RCI had the sector’s worst performance over the last 10 years during periods of rapid interest rate increases. We note that excluding August–November 2021 for RCI (during which management/board issues affected its stock price), RCI’s average excluding high and low values would be negative 8 per cent, better than BCE’s average of negative 12 per cent. Obviously, share price performance is also affected by company-specific events. However, we believe our analysis over several periods suggests our conclusion is valid. Moreover, we highlight that we have standardized returns (annualized and normalized for a 100bps rates change) for better comparability, which has caused performance to look strong for some stocks during specific periods.”

Though he trimmed his earnings expectations for 2022 and 2023, Mr. Dubreuil raised his target for BCE shares to $68 from $66.50. The average on the Street is $66.03.

“While we believe BCE will remain a core holding for many funds, we believe it is too early to put an overweight tag on the stock,” he said. “We support the company’s strategy to accelerate its wireline network deployments, but its weaker medium-term FCF outlook (vs the past few years), high exposure to legacy wireline and lack of near-term catalysts keep us on the sidelines at this point.”

Others making adjustments include;

* RBC Dominion Securities’ Drew McReynolds to $66 from $65 with a “sector perform” rating.

“We believe BCE is a model of consistency with the company delivering an attractive balance of growth and profitability while continuing to make significant investments to future-proof the business,” he said. “In addition to major strategic initiatives anchored around FTTH, we continue to be impressed by BCE’s extensive array of existing and new tactical initiatives. Bigger picture, we continue to believe BCE’s competitive position relative to peers could see the greatest gains over the medium term, driven by FTTH expansion and 5G deployment across Canada’s largest integrated wireline-wireless network footprint and growth in 5G B2B. We believe the migration to unlimited plans/EIPs, residential Internet market share gains driven by sustained FTTH/FWA investment, a gradual improvement alongside digital initiatives at Bell Media, and the realization of additional cost efficiencies that leverage a scale advantage position BCE for continued annual dividend growth.”

* National Bank Financial’ Adam Shine to $71 from $70 with an “outperform” rating.

* CIBC World Markets’ Robert Bek to $67 from $65 with a “neutral” rating.


A series of equity analysts on the Street trimmed their targets for shares of Lightspeed Commerce Inc. (LSPD-N, LSPD-T) following the release of better-than-expected third-quarter financial results and the announcement founder Dax Dasilva is stepping down.

Silcoff: Lightspeed founder Dax Dasilva steps down as CEO, hands reins to president of Montreal tech giant

Those making changes include:

* National Bank Financial’s Richard Tse to US$75 from US$90 with an “outperform” rating. The average is US$61.55.

“Lightspeed reported what we believe to be solid fiscal Q3 results,” said Mr. Tse. “That said, softer/in-line fiscal Q4 (Mar) guidance coupled with founder Dax Dasilva moving into a new role of Executive Chairman while JP Chauvet assumes the CEO role are only adding some uncertainty given the current market backdrop for tech stocks that’s further complicated by a continuing short overhang in the name. Yet, while the headlines may do little to draw short-term performance, the underlying details in the results combined with valuation make for an increasingly attractive risk-to-reward profile for investors. At approximately 7 times EV/S [enterprise value to sales] under an organic growth rate that’s expected to sustain at 35-40 per cent, we think LSPD is also becoming a potentially compelling acquisition target.”

* RBC’s Paul Treiber to US$50 from US$62 with an “outperform” rating.

“In what has been a very contentious stock over the past several months, we believe the current quarter and guidance suggests LSPD is regaining its footing after a few missteps last quarter. Although there remain several moving parts to both the model and the story, we see a pathway to greater clarity emerging this quarter, which we believe is necessary for investors to reengage with the name,” he said.

* Barclays’ Raimo Lenschow to US$50 from US$57 with an “overweight” rating.

“While Q3 was not a totally clean quarter for Lightspeed, the headwinds (Q4 seasonality, Omicron) are now priced in, leaving a favorable set-up for shares moving forward. Our view is that the stage is set for Lightspeed to take more meaningful steps in executing on its organic growth ambitions through 2022, more specifically after Q4 results. We expect payment penetration to more meaningfully inflect in FY23, and coupled with technology / GTM improvements, this will result in sustained strong organic growth. With execution we would expect to see multiple expansion, as the company currently trades at less than 5 times calendar 2023 estimated Sales. Hence, we maintain our Overweight rating,” he said.

* Credit Suisse’s Timothy Chiodo to US$45 from US$75 with an “outperform” rating.

* Piper Sandler’s Clarke Jeffries to US$54 from US$70 with an “overweight” rating.


Equitable Group Inc.’s (EQB-T) valuation “provides an opening” for investors, according to Scotia Capital analyst Meny Grauman.

That led him to raise his rating to “sector outperform” from “sector perform” ahead of the Feb. 17 release of its fourth-quarter 2021 results.

“EQB’s transformation into a full-fledged challenger bank has been backed up by strong and consistent financial performance led by impressive loan growth, solid credit metrics, and an improved funding mix,” Mr. Grauman said. “The macro environment has certainly been a key driver here, but despite the prospect of higher rates, the outlook for real estate remains very favorable, especially over the next few months. Yet despite all of these positives, the shares are down 16 per cent since peaking in early November and have underperformed EQB’s smaller peers by a similar amount. The good news is that this selloff in the face of strong fundamentals is the opening that we have been waiting for. With the shares now trading at just under 8.0 times 2022 consensus earnings and 1.3 times book value (despite an ROE that has consistently remained in the mid teens) we take the opportunity to upgrade the shares.”

For the quarter, the analyst is projecting earnings per share of $2.16, up from $1.99 during the same period a year ago and exceeding the consensus forecast on the Street of $2.12. He pointed to “impressive loan growth, stable margins, and a $2.5-million PCL recovery versus flat PCLs in Q4/20.”

“PTPP earnings growth missed our forecast in Q3 due to an unexpected drop in non-interest income that we see persisting into Q4 as well, but despite that we still expect revenue growth to come in at a strong 12 per cent year-over-year,” said Mr. Grauman. “Expenses were also elevated in Q3 and modestly above our forecasts. Looking ahead we expect the pace of spending to remain high to close out the year, but we do see EQB’s efficiency ratio improving ever so slightly on a sequential basis.”

Also expecting Equitable to announce a 50-per-cent increase to its quarterly payout during this earnings season, Mr. Grauman maintained a $94 target for its shares. The average is $92.64.


With its “significant” $153.8-million acquisition of a 50-per-cent interest in a portfolio of 11 private-pay retirement residences from Extendicare Inc. (EXE-T), Canaccord Genuity analyst Christopher Koutsikaloudis sees an “attractive entry point” into Sienna Senior Living Inc. (SIA-T).

That led him to raise his rating for the Markham, Ont.-based company to “buy” from “hold.”

“We view this transaction positively as it increases Sienna’s exposure to private-pay seniors housing, which has higher margins than long-term care and should generate stronger cash flow growth over the long term,” said Mr. Koutsikaloudis. “Following the transaction, Sienna’s retirement portfolio will represent over 50 per cent of NOI [net operating income], with the remainder derived from long-term care.

“Sienna’s recent operating performance has been strong, with same-property occupancy for the retirement portfolio increasing to 85.3 per cent as of December 2021, above the prepandemic occupancy rate of 84.5 per cent as of Q1/20.”

He maintained a $16.25 target for Sienna shares. The average is $16.42.

Elsewhere, CIBC World Markets analyst Scott Fromson bumped up his target to $16.50 from $16 with a “neutral” rating.


Ahead of the March 23 release of its fourth-quarter 2021 results, Desjardins Securities analyst David Newman cut his estimates for Boyd Group Services Inc. (BYD-T), citing “continued COVID-19-related challenges, including a slow recovery in driving activity and collision claims, technician shortages and escalating wage costs (covered in time through pricing), supply chain and parts challenges, and warmer weather in 4Q21.”

That led him to reduce his target for Boyd shares to $225 from $244 with a “hold” rating. The average is $244.71.

“We believe collision repair industry conditions could remain challenging through 1H22, given: (1) worsening technician shortages and escalating wages, which will eventually be covered through negotiations with the property and casualty (P&C) insurers (early signs of traction, but chasing wage inflation); (2) supply chain and parts challenges, with higher-cost non-primary suppliers and more expensive OE parts being utilized; (3) eroding shop floor KPIs (rising cycle times and length of rental (LOR)); and (4) the impact of Omicron, leading to a deferral in full reopening and traffic levels,” he said.

“While there is a lack of near-term catalysts, BYD is well-equipped to navigate the challenges and emerge a stronger player with: (1) pricing to recover labour and parts inflation; (2) its arsenal of DRP relationships, OE certifications, WOW Operating Way and superior metrics; and (3) a significant pipeline of acquisition opportunities, backstopped by its strong balance sheet.”


While the outlook for 2022 “remains encouraging,” Canaccord Genuity analysts Matt Bottomley and Derek Dley expect “a rather flat finish” to 2021 for U.S. cannabis companies.

“Per our review of state-level sales data in the U.S., as well as retail point-of-sales metrics (where available), it appears that end-user sales remained relatively flat in Q4/21 after starting to decelerate in the prior quarter,” they said. “We believe record-high inflation rates have had an overall net negative impact on average basket sizes and the frequency of store visits as the cost to consumers for gasoline, food and other staples have likely reduced discretionary spending on cannabis.”

“It also appears that several markets have begun to experience increased pricing headwinds in wholesale channels as additional capacity continues to come online. Although we believe much of this capacity will still have a longer-term use as markets continue to ramp (and new recreational markets are legalized), we are nonetheless anticipating near-term wholesale pricing headwinds to persist for the time being.”

In a research note released Friday, the analysts reduced their target prices for several companies ahead of the start of fourth-quarter earnings season. Their changes were:

  • Acreage Holdings Inc. (ACRG.B.U-CN, “buy”) to US$5 from US$5.50. Average: US$5.10.
  • Ayr Wellness Inc. (AYR.A-CN, “buy”) to US$57 from US$62. Average: $70 (Canadian).
  • Columbia Care Inc. (CCHW-CN, “buy”) to $11 from $13. Average: $13.52.
  • Cresco Labs Inc. (CL-CN, “buy”) to $15 from $16. Average: $22.62.
  • Curaleaf Holdings Inc. (CURA-CN, “buy”) to $18 from $22. Average: $24.10.
  • Green Thumb Industries Inc. (GTII-CN, “buy”) to $46 from $53. Average: $54.47.
  • Jushi Holdings Inc. (JUSH-CN, “buy”) to US$7 from US$8. Average: $11.64 (Canadian).
  • Planet 13 Holdings Inc. (PLTH-CN, “hold”) to $4.25 from $5. Average: $6.68.
  • Trulieve Cannabis Corp. (TRUL-CN, “buy”) to $70 from $97. Average: $79.33.
  • Verano Holdings Corp. (VRNO-CN, “buy”) to $26 from $29. Average: $36.13.

“Since the highs of this past February, U.S. Cannabis equities have remained under pressure with our Canaccord Genuity US Cannabis Index down more than 60 per cent during this time frame,” they said. “We believe a large majority of this pressure is coming from structural challenges in the equity markets given that cannabis remains an illicit Schedule 1 drug at the federal level. However, we continue to assert that fundamentals remain strong (even if slowed) and although pressure may persist over the near term, we believe the divergence between fundamentals and price action has resulted in an attractive entry point for those able to participate in the space.”


In other analyst actions:

* In a fourth-quarter earnings preview for TSX-listed asset managers, Desjardins Securities analyst Gary Ho cut his targets for CI Financial Corp. (CIX-T, “buy”) to $31 from $34 and Sprott Inc. (SII-T, “hold”) to $43 from $46. The averages on the Street are $32.33 and $59.82.

“Share prices for the group gained 6.9 per cent in 4Q21 and 38.2 per cent in 2021, but have had a rough start to the year, down 9.6 per cent year-to-date in 2022 vs 5.4 per cent for the S&P/TSX Capped Financials Index,” he said. “Flows outlook, capital allocation priorities and FY22 SG&A guidance are key themes we are looking out for. We have marked to market AUM across the group and made adjustments to estimates.”

* Seeing it “managing well through the supply chain/inflation headwinds,” RBC’s Sabahat Khan raised his Gildan Activewear Inc. (GIL-N, GIL-T) target to US$48 from US$45, exceeding the US$47.03 average, with an “outperform” recommendation, ahead of the Feb. 23 release of its fourth-quarter results.

“Recall the company implemented pricing increases at the start of Q4, which should help mitigate input/freight cost pressures,” he said. “In regard to navigating supply chain headwinds, we believe Gildan is relatively well-positioned as its products from South America are brought into the U.S. through the less congested East Coast ports (e.g., Port of Miami;). On labor, there were some concerns through 2021 related to the availability of labor at the company’s yarn spinning facilities; however, in our view, the acquisition of Frontier Yarns in December 2021 should alleviate any yarn supply related concerns.”

“For Q4, we expect investor focus to be on: 1) how POS/ demand trends in the U.S. Printwear channel evolved through the quarter; 2) the potential impact of labor shortages/input cost inflation on the company’s operations/outlook; 3) trends in the retail channel; and, 4) updates on capital allocation plans for the remainder of the year.”

* Raymond James analyst Stephen Boland initiated coverage of Q4 Inc. (QFOR-T) with an “outperform” rating and $14.50 target. The average is $13.83.

“QFOR’s platform is arguably the most comprehensive, end-to-end investor relations solution available on the market. Many competitors offer single-point solutions which fail to address the increasingly interconnected nature of the capital markets. On top of the company’s core investor relations offering, QFOR’s more advanced CRM and Analytics solutions provide alternative communication channels for corporates to liaise directly with both current and potential investors,” said Mr. Boland.

* Coming off restriction from its $64.1-million acquisition of U.S-based Microsoft cloud solutions provider Vitalyst, Scotia Capital analyst Paul Steep raised his target for Alithya Group Inc. (ALYA-T) to $4.25 from $3.75, below the $4.97 average, with a “sector perform” rating.

“We view Alithya as an emerging IT services provider that is pursuing an active M&A strategy in building out a mid-market IT services firm,” he said. “A key factor for the stock we will be monitoring over the coming quarters will be the firm’s progress on integrating and leveraging acquired operations. Volatility remains a risk as recent quarterly results have been impacted by seasonality and the ongoing COVID-19 pandemic.”

* Prior to the Feb. 11 release of its third-quarter results, Scotia Capial’s Konark Gupta trimmed his CAE Inc. (CAE-T) target by $1 to $44 with a “sector outperform” rating. The average is $40.20.

“We expect a sequential improvement and year-over-year growth in both civil and defence segments, although we have toned down our estimates to reflect the potential impact of Omicron,” he said. “We think CAE can still meet Street’s EBIT expectations while beating on margin, driven by favourable mix (bizjet training) and ongoing cost cuts. However, we are cautious on revenue and EPS vs. consensus. Stock is flattish year-over-year and has lost 16 per cent since last earnings, which suggests to us that investor expectations are low.

“Still, we would not expect the quarter to be a major catalyst as the market typically focuses on any negatives in the results. Thus, we would take advantage of any weakness around earnings, given bizjet activity is robust, air traffic is recovering, airlines need pilots ahead of busy summer season, and defence segment is due for a rebound organically while growing through the L3HMT acquisition. In addition, we believe CAE remains well-positioned to execute on more outsourcing and M&A opportunities with a liquidity position of $2.2-billion and reasonable leverage.”

* Scotia’s Phil Hardie cut his Propel Holdings Inc. (PRL-T) target to $18 from $21, remaining above the $17.33 average, with a “sector outperform” rating.

“Propel provided an operational update that revealed stronger-than-expected growth in originations and loan balances that reached record levels,” he said. “We are encouraged by the momentum and expect it to generate significant shareholder value over the longer term. That said, we expect the growth and transition in the portfolio to create near-term sales strain on earnings given a rise in acquisition and data costs in addition to higher credit provisions for performing loans on the expanded portfolio.”

* Mr. Hardie also reduced his TMX Group Ltd. (X-T) target to $150 from $154, reiterating a “sector perform” rating. The average is $150.14.

“TMX is set to report what we expect to be a relatively solid end to a strong year that benefited from a broad tailwind driven by heightened capital markets activity,” he said. “We are forecasting TMX to deliver 20-per-cent EPS growth in 2021, following a healthy 11-per-cent rise in 2020.

“TMX faces tougher year-over-year comparables and potentially reduced benefit of operating leverage over the near term as it continues to invest in new growth initiatives and encounters somewhat higher cost inflation across its largely fixed expense base. Looking into 2022, we expect a year-over-year decline in earnings from a record 2021, with fewer opportunities for upside earnings surprise.”

* RBC Dominion Securities analyst Paul Treiber cut his Altus Group Ltd. (AIF-T) target to $74 from $78, falling below the $75 average, with an “outperform” rating.

“Altus announced that CEO Mike Gordon will be replaced by current head of AA Jim Hannon. The news is surprising, given Mike Gordon’s short tenure and transformative impact to date. Solid Q4 results show Altus’ software momentum is strong; however, we are reducing our target,” he said.

* RBC’s Luke Davis increased his target for Parex Resources Inc. (PXT-T) to $34 from $32, reiterating an “outperform” rating. The average is $36.45.

* Barclays analyst Raimo Lenschow increased his Open Text Corp. (OTEX-Q, OTEX-T) target to US$51 from US$50 with an “equalweight” rating, while Raymond James’ Steven Li cut his target to $60 (Canadian) from $63 with an “outperform” rating. The average is US$58.78.

“Q2 FY22 was a relatively uneventful quarter with slightly better results, but a lower beat level than last quarter,” said Mr. Lenschow. “Organic revenue growth of 2.7 per cent year-over-year in constant currency (cc) remains low and hence, will not necessarily invite increased discussions about a new narrative for OTEX. Zix will be integrated next quarter and means higher reported growth, but also lower EBITDA margins in the short term while the business is being integrated. We suspect investors will likely look to the analyst day in a few weeks to see if a rethink around cloud adoption and overall growth is needed. However, until then, we are not sure OTEX will be a relative outperformer.”

* CIBC’s Hamir Patel cut his Loop Energy Inc. (LPEN-T) target to $4.50 from $7. The average is currently $8.60.

* Stifel analyst Stephen Soock initiated coverage of Moneta Gold Inc. (ME-T) with a “buy” rating and $5.60 target. The average is $4.90.

“We see Moneta’s Tower project as one of the next major gold deposits in North America to be developed,” he said. “With a resource base approaching 10Moz from a combination of high grade underground and bulk tonnage open pit sources, the project lends itself to a variety of different production scenarios of scale and ample opportunities for optimization. Tower is located just 60 minutes east of Timmins, ON with excellent access to infrastructure in Canada’s premier mining district. While we have no knowledge of any M&A discussion or activity, we believe the combination of all these factors make it a very attractive takeout candidate for major gold producers. We see a re-rate on both an EV/oz and spot P/NAV basis as inevitable as the market comes to appreciate the rare nature and high quality of the Tower gold project.”

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