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

ATB Capital Market analyst Chris Murray thinks a “more cautious stance” on NFI Group Inc. (NFI-T) is necessary following its weaker-than-anticipated 2022 guidance, believing “the risks and the binary nature of outcomes around covenant relief alongside the uncertain timing surrounding supply chains normalizing is likely to weigh on the investability of shares for some time.”

Though he remains “positive on the longer-term demand environment,” Mr. Murray lowered his recommendation for its shares to “speculative buy” from “outperform.”

On Thursday, the Winnipeg-based bus manufacturer dropped 22.5 per cent after announcing it expects adjusted earnings before interest, taxes, depreciation and amortization of US$100-$130-million for the year, well below the forecasts of both Mr. Murray (US$195-million) and the Street (US$191-million). It also slashed its quarterly dividend by 75 per cent (to 31 per share to 5.31 cents).

“The surprising and much weaker-than-expected guidance reflects management’s expectations that supply chains are likely to remain constrained throughout 2022 with a more meaningful recovery not anticipated until 2023,” said Mr. Murray.

“A 75-per-cent dividend cut came with Q4/21 results reflecting greater uncertainty around the cash flow profile with management confirming that discussions concerning further covenant relief remain ongoing with lenders. After the recent debt/equity deal, we see the Company maintaining adequate liquidity to bridge itself to 2023 assuming the forbearance of lenders, which are described as supportive, although likely at an unknown cost, which adds to the uncertainty for equity holders.”

After its fourth-quarte 2021 results exceeded expectations, Mr. Murray did emphasize a positive demand outlook supports NFI over the long term, noting: “Management reaffirmed its 2025 guidance while reiterating that the booking environment remains stronger than ever, underpinned by secular tailwinds around ZEBs and demand for public transit which will extend beyond current supply chain challenges with NFI Forward led cost reductions and aftermarket demand supporting a stronger margin profile over the medium term.”

Reducing his financial estimates to account for the guidance, Mr. Murray cut his target for NFI shares to $21 from $28. The average on the Street is $20.19.

Elsewhere, others making changes include:

* Scotia’s Mark Neville to $22 from $28 with a “sector outperform” rating.

“NFI’s 2022 guidance came in significantly below expectations as the company continues to face an unreliable/unpredictable supply chain, which is resulting in lower vehicle deliveries and significant manufacturing inefficiencies,” he said. “Compounding the matter is a highly specialized product and ‘Buy American’ content rules, making it harder to find substitute suppliers. With a heavy debt load and the likelihood of another near-term covenant breach, the company reduced its quarterly dividend by approximately 75 per cent and started negotiations with its lenders (re: further relief). The company also identified other opportunities to reduce leverage (e.g., A/R factoring) that could provide incremental support. We have made significant downward revisions to our forecasts.”

* National Bank’s Cameron Doerksen to $19 from $26 with an “outperform” rating.

“We concede that the Q4 report and 2022 outlook offered up much to be negative about and few positives,” said Mr. Doerksen. “However, we still see value in the stock underpinned by strong demand drivers. We expect the stock to remain pressured until there is more visibility on the supply chain, but our new target still offers 28-per-cent upside from the current share price.”

* Stifel’s Maggie MacDougall to $11.50 from $22 with a “sell” rating.

“The unfortunate war in Ukraine has compounded global supply chain issues that were already present. Furthermore, inflation in raw material prices appears to be accelerating, which needs to be considered and is likely to present a tricky pricing environment for NFI. We have reduced our 2022 forecast to be at the low end of 2022 guidance,” she said.

* CIBC’s Kevin Chiang to $18 from $25 with a “neutral” rating.

* TD Securities’ Daryl Young to $18 from $22.

* BMO Nesbitt Burns’ Jonathan Lamers to $21 from $27 with an “outperform” rating.


In response to recent share price weakness, Raymond James analyst Stephen Boland upgraded Goeasy Ltd. (GSY-T) to “strong buy” from “outperform” rating, seeing its business remaining “fairly agnostic to any near-term rate increases” and believing a “poorer economic backdrop could create additional opportunities.”

“Importantly, management recently highlighted that interest rates would need to increase by 2 per cent before any material impact would be felt in the business (due to floor agreements and fixed rates in place on current funding sources),” he said. “In addition, more prime exposure is expected to lead to lower funding costs over time.”

“We also highlight the possibility of traditional lenders tightening up their credit lines during periods of market downturns, forcing some borrowers to seek alternative sources of financing. We have provided an EPS sensitivity to a change in Net charge-offs (NCO) and found that a 1-per-cent change only impacts our EPS estimate by 9 per cent so not overly material. Our current NCO estimate is 9 per cent for 2022 in the middle of management’s 8-10-per-cent guidance.”

Believing the Mississauga-based firm’s stock “looks oversold and is now trading below historical levels despite a strong growth outlook,” Mr. Boland maintained a $207 target. The average target is $228.13.

“With GSY down 30 per cent year-to-date — versus the TSX at up 1.1 per cent — and now trading at a discount to historical averages, we see little change in the narrative and once again remind investors to take advantage of what we view as a very attractive entry point for the stock,” he said. “Despite the recent bout of market volatility, our outlook for the fundamentals of this business remain largely unchanged. Management recently reiterated its 3-year guidance and expects to deliver 20-per-cent CAGR loan growth (at the midpoint) through 2024. We believe the business is well insolated from concerns regarding interest rate increases and any deterioration in credit conditions.”


In the wake of the release of its largely in-line fourth-quarter 2021 financial results, a trio of equity analysts on the Street lowered their recommendations for Wesdome Gold Mines Ltd. (WDO-T).

After the bell on the Thursday, the Toronto-based miner reported adjusted cash flow per shares of 26 cents, missing the consensus forecast by 3 cents. It had earlier pre-released in-line production results.

Citing share price appreciation after a jump of 43 per cent year-to-date, iA Capital Markets analyst George Topping moved his rating to “buy” from “strong buy” while noting the improved sentiment toward gold.

“Wesdome will be a 200-270Koz producer at sub-US$1,000 per ounce AISC [all-in sustaining cost], possibly within two years or be part of the Val-d’Or consolidation,” he said.

Mr. Topping raised his target to $20 from $16.50 on valuation multiple expansion. The average on the Street is $15.05.

Elsewhere, Canaccord Genuity’s Michael Fairbairn lowered Wesdome to “hold” from “buy” with a $17 target, up from $13.50.

“Since we resumed coverage on January 31, 2022, WDO has significantly outperformed its peers, up 49 per cent vs. the junior peer average of 36 per cent,” said Mr. Fairbairn. “Fundamentally we continue to like Wesdome for its portfolio of high-quality assets in low-risk jurisdictions, strong management team, and expected near-term growth but flag WDO is now getting expensive relative to peers and its historic trading range. Wesdome now trades at the top of the junior group at 1.8-times NAV and 9.4-times EBITDA (junior peers at 0.9-times NAV and 6.9-times EBITDA) and its historic trading range of 5.4-13.4-times EBITDA and 0.68-1.24-times NAV.”

Echelon Partners’ Ryan Walker moved the stock to “hold” from “buy” with a $13.50 target.

“We expect WDO shares to continue to trade in tandem with gold (with potential further upside associated with gold price spikes not reflected in our PT given the high volatility owing to the conflict in Ukraine,” said Mr. Walker.


National Bank Financial analyst Cameron Doerksen sees “better days ahead” for Transat A.T. Inc. (TRZ-T), pointing to “positive” booking trends while warning leverage “remains high.”

On Thursday, the airline reported first-quarter revenue of $202-million, below Mr. Doerksen’s $231-million estimate and the consensus forecast of $239-million. An adjusted EBITDA loss of $36-million was better than anticipated (losses of $54-million and $40-million, respectively).

Airline industry still reeling from pandemic faces new challenge of soaring fuel prices

“There are encouraging signs that bookings for travel both for the remainder of the winter and the summer are strengthening,” said Mr. Doerksen. “With the lifting of border restrictions in mid-February, Transat noted bookings soared to near 2019 levels. Recovery has continued into March, and system-wide bookings were at 87 per cent of 2019 levels as of March 10th. Transat’s projected capacity for Q2 is approximately 48 per cent of 2019 levels and for summer 2022 capacity is planned to be at 91 per cent of 2019 levels over its entire network, although transatlantic will be slightly slower to recover (78 per cent of 2019 capacity for summer).”

The analyst also sees “less urgency” on Transat’s balance sheet, noting: “Transat negotiated an additional $43 million with the federal government on its credit facility for refunding passengers (at a rate of 1.22 per cent). Transat has also renegotiated some terms of its government LEEFF unsecured credit facility that sees the step-up in interest rate (currently 5 per cent but stepping up to 8 per cent) deferred to December 2023 versus April 2022 previously. These measures give Transat additional breathing room to find longer-term refinancing solutions. However, the balance sheet remains significantly levered and the risk of shareholder dilution remains, in our view.”

Keeping an “underperform” rating, Mr. Doerksen raised his target for Transat shares to $4 from $3.50. The average is $3.65.

“As noted, there are encouraging signs that bookings are strengthening, and we are confident that Transat’s EBITDA and cash flow can inflect positively in the coming quarters. However, leverage remains high, and we continue to see a risk of future shareholder dilution,” he concluded.


Predicting “significant inflationary cost pressure (including raw materials, freight, and labour) will be a significant headwind moving forward, RBC Dominion Securities analyst Paul Quinn downgraded KP Tissue Inc. (KPT-T) to “sector perform” from “outperform” following in-line quarterly results.

“Management noted that inflationary pressures increased during the second half of 2021, with similar pressures expected to continue into 2022,” he said. “Significant Q4 cost increases year-over-year included the doubling of natural gas prices, 15-per-cent increase in packaging costs, and rapidly rising labour costs. Given these substantial increases,the company released lower-than-expectedQ1 EBITDA guidance and noted that they are exploring additional options to balance their cost profile with pricing and productivity in 2022.”

“The company previously announced price increase in the AFH segment effective January 1, but the effects of rapidly increasing inflationary pressure on raw materials and logistics cost has required further incremental price increases which are effective in Q2 2022. The latest set of price increases are expected to gradually improve profitability in the struggling segment. Despite price increases, the company noted that these mitigating actions will have a lagged effect compared to the impact of inflation. We note that the price hikes may be difficult to achieve given the NA tissue capacity increases in 2022.”

Also noting freight issues “seem to be worsening,” Mr. Quinn cut his target for KP Tissue shares by $1 to 11, below the $11.17 average on the Street.


Following a “generally in line” fourth quarter of 2021, Canaccord Genuity analyst Aravinda Galappatthige expects the impact of supply chain disruptions to weigh on VerticalScope Holdings Inc. (FORA-T) through the first half of 2022.

“As we had expected, management comments suggest ongoing headwinds due to global supply chain challenges, particularly in the auto sector,” he said. “However, the recent acquisitions are serving to lower the automotive exposure of VerticalScope to sub 20 per cent. Importantly, while headwinds remain going into Q1, they do not seem to be worsening, based on the digital advertising numbers we saw in Q4. In fact, we estimate digital ad growth was near double digits on an organic basis.”

Mr. Galappathige anticipates the digital media company will see organic growth from ecommerce returning in the second half of the year following recent a recent slowdown, suggesting acquisitions could potentially drive gains starting in the second quarter.

“The aforementioned supply chain-related factors and the high pandemic-led comp period are the main causes [of the declining growth rate],” he said. “However, we expect to return to robust growth by Q3. We expect VerticalScope to see tailwinds from a series of initiatives that are currently being rolled out that could come into full effect as we progress through the year. This includes Sponsored Marketplaces which can further drive eCommerce revenues and the vendor self-serve (VSS) product. Second, we believe there can be material synergistic gains from the recent acquisitions. In particular with respect to Hometalk, we believe there is substantial upside in terms of introducing eCommerce to the property, while The Streamable could see accelerated growth through increased audience routing once integrated with VerticalScope’s 1,200+ properties.”

Though he reduced his revenue and earnings expectations to reflect “more extended headwinds from supply chain/inventory issues, as well as general macro uncertainty,” Mr. Galappatthige added “We continue to expect positive organic EBITDA growth in 2022, ahead of a steeper acceleration in fiscal 2023. Furthermore, as we play out the full year, on a ‘no acquisition assumption’ our model leads us to just 1.1 times net debt/EBITDA by year-end, suggesting meaningful room for future acquisitions. In fact, if we work off year-end F2021 levels, we estimate $75-$125-million in acquisition capacity, assuming a 2.5-3-times leverage ratio limitation, with no new equity issuances.”

Keeping a “buy” rating, he cut his target for VerticalScope, which went public last June, to $28 from $32 in order to “factor in the re-rating in the public markets over the past three months, particularly in the smaller cap and tech leaning sectors.” The average on the Street is $37.44.

“We nonetheless see FORA-TSX as a compelling pick in our sector in the current conditions due to its well-rounded investment thesis that hits all the right notes; from underlying organic growth opportunities, accretion from M&A, high margins, high FCF conversion to attractive valuations,” he said. “Crucially, we also believe that VerticalScope is less susceptible to privacy-related changes in the digital media ecosystem than many of its peers.”

Elsewhere, RBC’s Drew McReynolds cut his target to $32 from $35 with an “outperform” rating, while TD Securities’ Vince Valentini reduced his target to $31 from $40 with a “buy” rating.

“Given strong execution, a compelling business model and attractive outlook, we continue to believe the stock is mispriced and we would be buyers at current levels. Factoring in a lower terminal multiple in a higher interest rate environment, our price target decreases,” said Mr. McReynolds.


Seeing it “growing responsibly,” ATB Capital Markets analyst Martin Toner remains “confident” in Docebo Inc.’s (DCBO-T) ability to deliver high rates of expansion in the near term.

“Docebo’s growth algorithm remains strong, it is adding new, larger customers at a rapid rate, and its growth with existing customers is improving,” he said.

On Thursday, shares of Toronto-based online learning company dropped 4.7 per cent after reporting its fourth-quarter 2021 financial results. Consolidated revenue grew 58.9 per cent year-over-year to $29.8-million, topping the Street’s forecast of $29.2-million, while annual recurring revenue jumped 59.1 per cent to a record $117.7-million, up $14.2-million from the third quarter. An adjusted earnings per share loss of 4 cents was smaller than anticipated by 3 cents.

“Q4/21 results were very consistent with the current narrative, rapid, yet capital efficient growth,” said Mr. Toner.” Docebo continues to execute at a high level, and is growing rapidly relative to the broader SaaS universe. The biggest change this quarter was establishing the expectation of reaching EBITDA and FCF positive exiting 2022, which is ahead of our expectations. Given that this announcement comes with no change to the growth outlook, we view it as a positive, particularly in the current environment. The ACV of new customers continues to come in well ahead of the Company average. ACV of new customers was close to $60,000, about the same as Q3/21, and approximately 45.0 per cent of new customers had over $100,000 in ACV. When enterprises are consolidating vendors, and require a strong external use case offering, Docebo performs very well, and is experiencing strong win rates, well above average industry average. We expect external use cases will continue to become a more important learning priority, and that this tailwind will increase going forward.”

The analyst raise his near-term EBITDA estimates to “reflect the accelerated path to positive free cash flow (FCF) and EBITDA,” while he lowered his revenue growth estimates to “incorporate a more conservative outlook for 2023 (32.7-per-cent revenue growth from 2022 to 2023), which translates into a slightly lower 10-year revenue growth compounded annual growth rate (CAGR).”

Maintaining an “outperform” rating, Mr. Toner raised his target for Docebo shares to $115 from $110. The average is $101.76

“We believe that Docebo’s discount to the valuation of other fast-growing SaaS companies implies even faster deceleration for Docebo’s revenue, and that growing faster, for longer, will be a catalyst for further share price appreciation,” he said. “We believe this miscategorization is driven by the lack of exposure the stock has had within the SaaS universe given its size, liquidity, and geography, as opposed to a negative view on any fundamental factors.”

Others making target adjustments include:

* Canaccord Genuity’s Robert Young to US$65 from US$80 with a “buy” rating.

“We believe a strong enterprise pipeline supports our view of 43-per-cent ARR growth in 2022, albeit decelerating with growing scale,” said Mr. Young. “On the other hand, scale and operating leverage also support a 2022 exit with positive EBITDA and FCF, which is a positive message in the market’s current frame of mind. Management did reiterate its focus on responsible growth. Despite the recent tech sell-off, we remain positive on Docebo shares given a solid growth profile, strong sales efficiency metrics, rapidly growing enterprise cohort and a robust balance sheet.”

* Scotia’s Paul Steep to US$54 from US$79 with a “sector perform” rating.

“Our thesis on DCBO remains that the long-term opportunity depends largely on the company’s ability to sustain or accelerate organic growth, as it continues to invest in growing its sales resources to drive growth in North America and Europe over the medium term,” he said. “We continue to see M&A as having potential to drive value as well as management’s ability to maintain the firm as a ‘Rule of 40′ SaaS company.”

* Stifel’s Suthan Sukumar to US$85 from US$100 with a “buy” rating.

“DCBO delivered a solid set of results for FQ4, with record net new ARR contribution from record customer wins underscoring strength and durability of the company’s pipeline as the company continues to execute well against an expanding market opportunity,” he said. “In our view, this sets the stage for a strong growth outlook combined with stronger operating leverage ahead. We have updated our estimates to reflect modestly higher growth and margin assumptions. Early days traction in the partner channel, global expansion, and land

and expand activity keep us bullish on potential for further growth upside.”

* CIBC’s Stephanie Price to $70.50 from $102 with an “outperformer” rating

* TD Securities’ Daniel Chan to $90 from $130 with a “buy” rating.


In other analyst actions:

* TD Securities analyst Sam Damiani raised Granite Real Estate Investment Trust (GRT.UN-T) to “action list buy” from “buy” with a $115 target, while CIBC’s Sumayya Syed increased her target to $110 from $109 with an “outperformer” rating. The average is $109.82.

* TD’s Craig Hutchison cut First Majestic Silver Corp. (FR-T) to “hold” from “buy” with a $19 target, up from $18 and above the $18.80 average.

* TD’s Aaron MacNeil downgraded Shawcor Ltd. (SCL-T) to “hold” from “buy” with a $6 target, down from $8.50, while RBC’s Keith Mackey lowered his target to $8 from $9, above the $7.46 average, with an “outperform” rating.

* Stifel analyst Robert Fitzmartyn downgraded Journey Energy Inc. (JOY-T) to “hold” from “buy” with a $5.75 target, rising from $2.75 and above the $4.17 average.

“Journey reported fourth quarter results in line with our expectations,” he said. “It is lifting 2022 capital investment by $6-million to $42-million, adding 3x wells to its drilling slate. We refine our forecast with AFFO generation muted by the incorporation of higher royalty burden ahead. Stock price performance in the last 12 months has been superlative offering the highest return in our Canadian E&P coverage suite. Maintaining our prior valuation we reluctantly find ourselves reducing our rating to HOLD on a substantially higher 12-month target price, though a return to drilling wells (keep in mind Journey did not drill any wells in 2020 or 2021) could derive a number of operational catalysts ahead.”

* Canaccord Genuity’s Aravinda Galappatthige reduced his target for shares of AcuityAds Holdings Inc. (AT-T) to $7 from $13, keeping a “buy” rating, while Desjardins Securities’ Kevin Krishnaratne cut his target by $1 to $6 with a “hold” rating and TD Securities’ Vince Valentini lowered his target to $6 from $8 with a “buy” rating. The average is $8.07.

“While 4Q revenue was in line, the near-term outlook calls for continued headwinds due to supply chain disruptions and lower-than-normal travel ad spend,” said Mr. Krishnaratne. “While illumin has been ahead of expectations, much more meaningful traction with Enterprise clients is not likely to materialize until 2H. In the meantime, AT is ramping up sales efforts, causing margins to compress. We maintain our Hold rating as we await evidence of better trends and revenue beats before getting more constructive on the name.”

* National Bank Financial’s Michael Robertson raised his Ag Growth International Inc. (AFN-T) target to $49 from $46, keeping an “outperform” rating. The average is $50.67.

“We like the quarter and associated outlook, reinforcing our positive stance,” he said. “The buildout of AGI’s global platform has proven helpful in limiting the impact of severe weather or geopolitical turmoil in a specific geographic region, and with margins reaching inflection points in growth markets, AGI continues to target a 100-200 bps in EBITDA margins relative to recent levels over the medium term. With our forecasts nudged higher, we increase our target.”

* Desjardins Securities’ Gary Ho raised his Alaris Equity Partners Income Trust (AD.UN-T) target by $1 to $24 with a “buy” rating.

“Alaris reported a solid quarter which showed the early success of its pivot to common equity investments (10 per cent of total portfolio), demonstrated by robust FV gains. Two near-term catalysts for AD — Kimco redemption/crystallizing of unpaid distributions and the subsequent deployment into a follow-on investment. AD pref collars also offer rate reset benefits in an elevated inflationary environment. We upped our forecasts and bumped our target price,” said Mr. Ho.

* Scotia’s Orest Wowkodaw raised his Altius Minerals Corp. (ALS-T) target to $25, above the $23.86 average, from $19 “to reflect commodity prices that are tracking well above our current forecast, particularly for potash.” He kept a “sector perform” rating.

* Canaccord Genuity’s Matthew Lee cut his Bragg Gaming Group Inc. (BRAG-T) target to $19 from $21, exceeding the $17.40 average, with a “speculative buy” rating.

“2021 was an eventful year for BRAG, with several significant achievements somewhat dampened by challenges in Germany and the resignation of its CEO,” said Mr. Lee. “While some uncertainties remain, we expect that an action-packed F21 has set the table for the company to take advantage of ample industry tailwinds and drive high double-digit growth over the near to medium term. While Q4 financial results were largely in line with those pre-announced in its trading update, our key takeaway was the colour BRAG provided on guidance. On the call, management highlighted that the Ontario market was a negligible contributor to their forecasts, implying that a foray into the province (which opens April 4th) would entirely be upside to their current 17-per-cent revenue growth trajectory. BRAG’s guidance, in tandem with its Q4 performance, improves our confidence in revenue visibility and, as a result, drives an increase in our forecasts.”

* Wells Fargo’s Roger Read raised his targets for Canadian Natural Resources Ltd. (CNQ-T, “equal weight”) to $79 from $61 and Suncor Energy Inc. (SU-T, “overweight”) to $51 from $42. The averages are $77.50 and $45.09, respectively.

“We have significantly raised our crude oil price deck for 2022,” said Mr. Read. “Thus, our EPS and CFFO forecasts are well above consensus. It is our view that near-term consensus estimates reflect a price deck below the strip. Therefore, even if the current strip is a better indication of actual prices, then consensus expectations would rise while ours would decline in 2022. Our 2024 price deck is approximately $5/bbl below the strip. This supports our view of a more expensive incremental barrel in the future and underpins our valuation outlook as reasonable relative to the commodity.”

* BMO’s Peter Sklar cut his Canadian Tire Corp. Ltd. (CTC.A-T) target to $187 from $206 with a “market perform” rating. The average is $232.80.

“While we believe Canadian Tire demonstrated that it is one of the most progressive Canadian retailers in terms of adopting digital/omnichannel strategies, the stock was down $1 on the day,” he said. “We believe this was due to a few factors, including the higher level of capex spend out to 2025, the indication that earnings growth will be back-end loaded through the aspiration period, and an anticipated 8.3-per-cent EPS CAGR through 2025, which, while is a healthy growth rate, does not appear to be sufficient to bring incremental investors into the stock.”

* National Bank’s Zachary Evershed lowered his target for Dexterra Group Inc. (DXT-T) to $13 from $14.50 with an “outperform” rating. The average is $11.57.

* Calling its third-quarter results a “satisfying meal,” RBC’s Irene Nattel increased her Empire Company Ltd. (EMP.A-T) to $48 from $46 with a “sector perform” rating. Others making changes include: BMO’s Peter Sklar to $46 from $41 with a “market perform” rating, CIBC’s Mark Petrie to $50 from $49 with an “outperformer” rating and TD Securities’ Michael Aelst to $50 from $44 with a “buy” rating. The average is $46.89.

“FQ3 solid with food retailing EBITDA as forecast, EPS $0.77 (RBC CM $0.71, consensus $0.66) benefited from higher contribution from Investments & Other Operations. EMP on track to realize the 15-per-cent three-year EPS CAGR target of Project Horizon notwithstanding slower growth in F22,” he said. “The key caveat, in our view, is the depth and duration of inflation — not just in food but across the board — that could deepen consumer trade down, accelerate the shift to discount where EMP under indexes, and increase competitive intensity at a time of heightened investments for the company.”

* CIBC’s Cosmos Chiu bumped up his target for Endeavour Silver Corp. (EDR-T) to $9 from $8 with a “neutral” rating. The average is $7.21.

* CIBC’s Anita Soni increased her Equinox Gold Corp. (EQX-T) target to $10.75 from $10, keeping a “neutral” rating. The average is $12.59.

* Canaccord Genuity’s Yuri Lynk cut his Greenlane Renewables Inc. (GRN-T) target to $2.25 from $3 with a “buy” rating, while TD’s Aaron MacNeil reduced his target to $2 from $2.25 with a “speculative buy” recommendation. The average is $2.68.

“Greenlane reported another record revenue quarter and its fifth consecutive positive adjusted EBITDA quarter,” he said. “Revenue increased 146 per cent in 2021 while EBITDA turned positive. A record backlog of $50 million expected to be delivered over the next 9-18 months reflects increasing demand for Greenlane’s biogas upgrading systems and points toward growth continuing in 2022. However, we trim our target price on a more conservative valuation multiple to reflect sector-wide multiple compression.”

* Scotia Capital’s Phil Hardie lowered his target for Lifeworks Inc. (LWRK-T) to $28 from $32 with a “sector outperform” rating. Other changes include: BMO’s Étienne Ricard to $29 from $34 with an “outperform” rating, National Bank’s Jaeme Gloynto $28 from $32 with a “sector perform” rating, TD’s Graham Ryding to $27 from $36 with a “buy” rating and CIBC’s Stephanie Price reduced her target to $24 from $36.50 with an “outperformer” rating. The average is $31.50.

“In the near-term, LWRK has and will experience margin pressure as surging demand for mental health support drives increased utilization of the company’s more expensive third-party network,” said Mr. Gloyn. “To offset this trend, we expect LWRK to hire more in-house counselors and renegotiate higher rates on customer contract renewals. But this process takes time and likely won’t resolve in the near-term. Moreover, organic growth remains below the mid-single digit guidance, suggesting that LWRK may not capture as much revenue upside on the surging demand as we previously anticipated (at least in the near-term).”

* CIBC’s Stephanie Price raised her Magnet Forensics Inc. (MAGT-T) by $1 to $34, below the $43.90, average with an “outperformer” rating, while RBC’s Paul Treiber cut his target to $42 from $48 with an “outperform” recommendation and BMO’s Thanos Moschopoulos moved his target to $38 from $45 with an “outperform” rating.

“While Magnet’s shares, along with high-growth software peers, have been volatile of late, the company’s momentum has exceeded expectations. Looking forward, we see continued more than 30-per-cent growth, due to the high priority being placed on digital investigations in the public sector and rising adoption within private enterprises. Magnet is currently trading at 8 times FTM EV/S [forward 12-month enterprise value to sales], below cybersecurity peers at 11 times, despite higher estimated FTM revenue growth (32 per cent vs. 23 per cent),” said Mr. Treiber.

* National Bank’s Endri Leno raised his Medical Facilities Corp. (DR-T) to $12.75 from $11.50 with an “outperform” rating. Others making changes include: RBC’s Douglas Miehm to $12 from $10 with a “sector perform” rating; iA Capital Markets’ Chelsea Stellick to $12 from $11.75 with a “buy” rating and Leede Jones Gable’s Douglas Loe to $13 from $10.50 with a “buy” rating . The average is $11.81.

“Q4 is a seasonally strong quarter for MFC and Q4/21 results handily beat Street estimates for both revenue and EBITDA resulting in an upward rerating of the stock [Friday] morning,” said Ms. Stellick. “Given $61-million cash on hand, MFC has expanded its NCIB to repurchase up to 10 per cent of its outstanding common shares until November 30th and having recently completed the expansion at ASH we anticipate capital deployment in 2022 for development of new facilities or acquisitions. Despite Omicron sweeping through the nation in Q4 there has been continued improvement in surgical case volumes and we maintain our outlook for increasingly normalized surgical case volumes and phasing out of stimulus.”

* Scotia’s Mark Neville lowered his Neo Performance Materials Inc. (NEO-T) target to $27, above the $26.69 average, from $29 with a “sector outperform” rating, while Stifel’s Ian Gillies cut his target to $21 from $26 with a “buy” rating.

“Given the magnitude of the increase in rare earth prices, we have increased our 2022/2023 estimates by 5 per cent/13 per cent,” Mr. Neville said. “Importantly, the company also indicated its facility in Estonia has been unaffected (to date) by the Russia/Ukraine conflict – i.e., the company is still able to source material (for rare earth separation) from Russia (70 per cent of the feedstock), while working to accelerate shipments from Energy Fuels (UUUU-US; not covered) and exploring opportunities with other suppliers. While hard to handicap the odds of a disruption to the Russian feedstock, it doesn’t sound like the impact would be overly punitive as the rare metals business would be unaffected (50 per cent of the capacity), the company has several months (i.e., more tha n 3 months) of inventory on hand, and Magnequench could source magnetic materials from other suppliers (rather than from Estonia).”

* JP Morgan analyst Tien-Tsin Huang initiated coverage of Nuvei Corp. (NVEI-Q, NVEI-T) with an “overweight” rating and US$65 target. The average is US$104.75.

* With Thursday’s release of weaker-than-anticipated quarterly results, Canaccord Genuity’s Robert Young cut his Pollard Banknote Ltd. (PBL-T) target to $30 from $48 with a “hold” rating, while Acumen Capital’s Jim Byrne reduced his target to $42 from $58 with a “buy” rating and Raymond James’ Stephen Boland lowered his target to $47 from $51.50 with an “outperform” rating. The average is $39.63.

“Q4 results fell short our expectations mainly due to inflationary pressures on the company’s inputs,” said Mr. Byrne. “The company is still seeing very strong demand for its instant ticket products and charitable gaming operations in the first few months of 2022. Unfortunately, many of the pressures from Q4 will impact Q1/22. The company has a number of strategies in place to help mitigate the impacts as they enter the year.”

“We believe the underlying fundamentals for PBL remain very strong, and the company is poised to deliver strong growth and significant free cash in the coming years.”

* Though he said its quarterly results impressed, Stifel analyst Martin Landry lowered his target for Premium Brands Holdings Corp. (PBH-T) to $140 from $150 with a “buy” rating based on inflation concerns. Others making changes include: BMO’s Stephen MacLeod to $142 from $156 with an “outperform” rating; Scotia’s George Doumet to $145 from $150 with a “sector outperform” rating; CIBC’s John Zamparo to $120 from $135 with a “neutral” rating and Desjardins Securities’ David Newman to $160 from $157 with a “buy” rating.. The average is $145.30.

“Premium Brands continues to see strong momentum across its businesses with demand outpacing capacity in many segments,” said Mr. Landry. “This dynamic may help the company weather inflation risks and could smooth the potential of demand destruction. Management charted a path to $600 million in EBITDA by 2023 which seems achievable given the CAPEX expansion plans and recent acquisitions. The company is expected to introduce a new 5-year plan later this year which could be a near-term catalyst, providing investors with long-term visibility.”

“In our view, consumer sentiment as shifted significantly in the last month, due to rising inflation, rising interest rates, rising gasoline prices, the stock market correction and the Russian/Ukraine conflict. We are concerned that reduced consumer confidence may make it difficult to pass on price increases without an impact on demand. There are psychological threshold levels such as ($9.99 or $19.99) where past these price points, demand destruction could occur, in our view. Hence, we believe that there is a risk that demand may be more elastic than in previous recession given the “perfect storm” nature of the macro-economic headwinds.”

* National Bank’s Shane Nagle raised his target for Sherritt International Corp. (S-T) to $1 from 65 cents with a “sector perform” rating. The average is 83 cents.

“We are utilizing a revised target multiple ascribing some value to near-term cash flow as shares are expected to benefit from elevated nickel, cobalt and fertilizer pricing,” said Mr. Nagle. “Our Sector Perform rating accounts for Sherritt’s targeted exposure to Nickel and Cobalt improving the outlook for distributions in the near term offset by the need to service debt commitments under our Base Case commodity price assumptions.”

* CIBC’s Hamir Patel cut his Stella-Jones Inc. (SJ-T) target to $50 from $51 with an “outperformer” rating. The average is $52.31.

* Canaccord Genuity’s Yuri Lynk raised his target for WSP Global Inc. (WSP-T) to $200 from $190 with a “buy” rating. Others making changes include: Stifel’s Ian Gillies to $190 from $200 with a “buy” rating; Desjardins Securities’ Benoit Poirier to $192 from $185 with a “buy” rating. and RBC’s Sabahat Khan to $201 from $197 with an “outperform” rating. The average is $196.64.

“While we had high expectations for the upcoming strategic plan, management outpaced our expectations with impressive margin targets and encouraging comments with respect to M&A ... Considering WSP’s success with its two previous strategic plans, we are quite confident in management’s ability to meet, and potentially exceed, certain targets by 2024. WSP is our preferred E&C name,” said Mr. Poirier.

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