Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

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

RBC Dominion Securities analyst Robert Muller raised his near-term estimates for Apple Inc. (APPL-Q) on Friday, noting social media analysis “indicates higher customer interest and satisfaction with the current-year iPhone lineup, as well as sustained and increasing interest in Wearables (AirPods).”

"According to our RBC Elements sentiment tracker, social media mentions with positive sentiment increased 232 per cent over 2018 (Sep–Dec period) and 139 per cent over 2017," he said. "While in years past we’ve witnessed a spike around the product launch, with mentions falling soon after, positive sentiment has remained high through the holiday season. Not only do we expect this to drive near-term (Dec-quarter) results, we expect satisfied customers to return over the coming years when it’s time to upgrade. A central tenet of our positive AAPL outlook is the ability to drive repeat purchases, and positive social media mentions bolster our argument."

Story continues below advertisement

Mr. Muller said his tracking on interest in Apple’s iPhone 11 offerings has been “high” and has sustained customer interest longer than the prior two model years.

"In short, 11/11 Pro interest has been higher and higher-for-longer, which we expect to support Dec-qtr sales results," he said. "We raise our estimates accordingly; however, we adjust our ASP [average selling price] estimates downward as we incorporate a higher 11 vs. Pro mix shift."

Also raising his estimates for the company's wearable category based on continued success of its AirPods, which have a premium pricing, Mr. Muller increased his 2020 and 2021 earnings per share projections to US$13.68 and US$16.02, respectively, from US$13.17 and US$16.

Maintaining an “outperform” rating for Apple shares, Mr. Muller hiked his target to US$330 from US$295. The average on the Street is currently US$268.42, according to Thomson Reuters Eikon data.

“Given the improved near-term outlook (especially with tariffs seemingly in the rear-view mirror) and our continued belief in a multi-year upgrade cycle as we approach 5G, we raise our target multiple to 20 times (from 18 times) our calendar year 2021 EPS estimate, more in line with AAPL’s high-tech peer group,” said Mr. Muller. “We believe this multiple better reflects AAPL’s core business, which should benefit from an increasingly satisfied install base.”


Believing it has become a victim of its own success and expressing concern about the pending acquisition of Transat AT Inc. being dilutive to earnings in the first year, Cowen analyst Helane Becker downgraded Air Canada (AC-T) to “market perform” from “outperform."

Story continues below advertisement

Though she thinks its capital allocation plans and the re-launch of its loyalty program are interesting, Ms. Becker noted they are known to the market and likely priced into its current share price.

She sees limited catalysts to move shares higher at current prices.

Ms. Becker maintained a $51 target. The average on the Street is $56.79.


CIBC World Markets analyst Scott Fromson raised his rating for Park Lawn Corp. (PLC-T) in to “outperformer” from “neutral” in reaction to Thursday’s announcement of its plan to acquire 14 properties in the Nashville area.

“PLC is both adding substantial presence in a fast-growing market and building on the network of adjacent Kentucky to form a larger Mid-South regional cluster,” said the analyst. “The acquisition comes sooner than we had expected, given the high volume of deal activity in FY/19, and validates the robustness of PLC’s deal pipeline in the highly fragmented death-care industry. Our model now reflects a more aggressive growth profile. We could see earnings upside from further acquisitions this year.”

Story continues below advertisement

Mr. Fromson increased his target for Park Lawn to $34 from $30. The average is $34.10.


Following a recent $23-million equity financing, Montreal-based Xebec Adsorption Inc. (XBC-X) is “well capitalized and competitively positioned in the fast-growing Renewable Gas market,” according to Canaccord Genuity analyst Raveel Afazaal.

“We maintain our favourable view of Xebec given (1) the global regulatory push coupled with subsidies to de-carbonize natural gas network, (2) Xebec’s strong IP to upgrade biogas to RNG and refinery off-gas to ultra-pure hydrogen for fuel cell applications, and (3) the profitable Clean Tech division with a geographically diverse revenue stream on track to grow 150 per cent year-over-year in 2019,” he said. “We value XBC’s Clean Tech division using 3.0 times EV/S [enterprise value to sales] but see upside given Ballard Power (BLDPCA | Not Rated, large Canadian fuel cell company) is trading at 12.0 times EV/2020 Sales.”

Mr. Afzaal said the “small” acquisition of California-based CDA Systems LLC, which was announced in mid-December, is of “significant” importance to Xebec’s Clean Tech division.

“This acquisition is in line with the company’s strategy to leverage its strong valuation multiple to acquire cash flow positive industrial air and gas service companies at an attractive price,” the analyst said. "The company intends to make these acquisitions in regions where it sees significant scope to sell its RNG equipment. The company aims to leverage this expanding branch network to win operational and maintenance contracts on the back of RNG equipment sales. We believe successful execution of this strategy should not only provide a new and recurring source of revenue but also help Xebec develop a stronger relationship with its customers resulting in competitive positioning for follow-on orders.

Story continues below advertisement

“This tuck-in acquisition comes on the heels of Xebec signing an LOI with Maas Energy Works to provide biogas upgrading units in California. The company intends to leverage this acquisition to secure service support contracts on the back of potential sale to Maas Energy. In the US, we see California as the most attractive market for RNG projects given large subsidies offered to convert animal waste on dairy farms to RNG under its Low Carbon Fuel Standard.”

Mr. Afzaal raised both his sales and EBITDA expectations for 2020 and 2021. With those changes, he updated his valuation, leading him to increase his target for Xebec shares to $2.75 from $2.50. The average on the Street is $3.

He maintained a “speculative buy” rating.


RBC Dominion Securities analyst Kenneth Lee made a trio of rating changes in his 2020 outlook for U.S. asset managers, business development companies and mortgage REITS on Friday

Mr. Lee upgraded Ameriprise Financial Inc. (AMP-N) to “outperform” from “sector perform” with a target of US$190, jumping from US$149 and exceeded the consensus of US$183.50.

Story continues below advertisement

“For some time, AMP’s core A&WM business has been delivering strong performance and we expect growth to continue," the analyst said. "We expect robust return of capital given strong capital position.”

Mr. Lee downgraded Invesco Ltd. (IVZ-N) to “sector perform” from “outperform” with a US$19 target, down from US$22. The average is US$17.83.

"While valuation remains depressed, we think there is more uncertainty around the net flow picture vs. peers in 2020," he said. "To be sure, we continue to favor Invesco’s depth of capability and well-diversified asset mix, and we believe the company is set up well for longer-term organic growth."

He also lowered Owl Rock Capital Corp. (ORCC-N) to “sector perform” from “outperform” with a US$17 target (unchanged). The average target is US$16.88.

“We continue to view ORCC as one of the few BDCs with scale advantages, including access to meaningful deal flow, and we have visibility into dividends through 2020,” said Mr. Lee. “However, after a strong stock run-up (up 16 per cent since IPO in July versus 8-per-cent return for the S&P 500 index), we think the valuation is relatively full at 1.2 times P/NAV [price to net asset value].”


Story continues below advertisement

Citing its valuation, BMO Nesbitt Burns analyst James Fotheringham lowered Bank of America (BAC-N) to “market perform” from “outperform.”

“Following a valuation re-rating for U.S. large-cap banks over the past three months (which had been long-overdue, in our view), BAC shares now trade at a premium to their long-term historical average,” he said.

“In contrast, C and MS shares still trade at a discount; while the economic backdrop remains supportive for U.S. large-cap banks, we encourage investors to stick with these discounted stocks during the current ‘cyclicals rally.’”

Mr. Fotheringham’s US$37 target exceeds the US$35.20 average.


With files from Reuters

Related topics

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies