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

Desjardins Securities analyst Jerome Dubreuil raised his recommendation for shares of Rogers Communications Inc. (RCI.B-T) on Friday, expressing greater comfort in its high leverage level given shifting economic conditions.

“We are moving to a Buy (from Hold) rating as many of the risks we anticipated for RCI (and which made the high leverage more uncomfortable) are now better understood,” he said following Thursday’s quarterly release. “In addition, the company appears well on track to meet its Shaw acquisition synergy objective, which we believe would make the stock attractive on a FCF [free cash flow] yield basis, especially when a larger part of the market starts looking at 2025 estimates. This should occur when the company reports its 4Q earnings in early 2024.”

In a research report titled Leverage is much easier to accept with visibility, Mr. Dubreuil cautioned the direction of interest rates remains “unclear,” however he thinks “upward momentum appears to be stalling and lower multiples in Canadian telecom make it easier to recommend adding exposure to RCI.”

“We now better understand many of the risks that kept us on the sidelines: 1. Increased competition—financials are resilient. RCI has fared well so far during the heightened competitive environment, and QBR appears to be entering English Canada with a non-disruptive approach centred on profitable growth. 2. Regulatory changes—manageable impact. This week’s CRTC decision is probably a net positive for RCI in light of BCE’s reduced FTTH deployment expectations. MVNO agreements in place should improve the position of smaller players, but RCI’s recent wireless execution has been strong. 3. Integration risk—ahead of plan. RCI now expects to achieve its synergy target earlier than anticipated. 4. 3800MHz spectrum auction—still a risk. RCI has the lowest amount of spectrum to buy in large cities before reaching the government cap. Moreover, market reactions to spectrum auction results have historically been relatively muted,” he said.

Mr. Dubreuil also expressed increasing confidence in its ability to success take advantage of synergies stemming from the Shaw deal.

“Another reason for our recent cautiousness on RCI was the very high 2025 cable margin consensus of 63 per cent , which looked like a set-up for eventual disappointment,” he said. “We currently forecast 57 per cent, but nonetheless forecast FCF in 2025 that is broadly in line with the Street and would provide a 14-per-cent FCF yield (our definition). This means we have a different view of how synergies should be allocated (not 100 per cent in cable opex), but synergy allocation should not be a concern for FCF-driven investors.”

Believing Rogers stock “looks good on 2025 numbers,” he hiked his target to $69 from $66.50. The average target on the Street is $72.33, according to Refinitiv data.

“As most analysts will roll over their valuations to their 2025 estimates, we believe it will become more evident that RCI is undervalued on a relative basis,” said Mr. Dubreuil. “RCI boasts the highest FCF yield among the Big 3, both in terms of FCFF/EV [free cash flow to the firm to enterprise value] and FCFE/market capitalization despite faster expected growth. We believe the gap is clearly too large on 2025 FCF yield. Indeed, RCI generates an attractive 13.7-per-cent FCFE/market capitalization yield on our 2025 numbers. This is using our definition of FCF, which is more conservative than management’s.”

“RCI’s FCF yield on 2025 estimates is too high given the acceptable level of risk — we recommend buying the stock.”

Other analysts making target adjustments include:

* Scotia’s Maher Yaghi to $69.50 from $68 with a “sector outperform” rating.

“We are maintaining our Sector Outperform rating and increasing our target price due to improved FCF metrics ... We believe that as the company begins to reap the benefits of cost synergies and the diversification of the business (East and West), as well as the increased scale of the business (wireless and cable), management will be able to de-lever the balance sheet and improve the stock’s discounted valuation versus peers,” said Mr. Yaghi. “In addition to these financial benefits, one aspect of the acquisition that is still a few years away is what scale will enable management to undertake in terms of projects that will eventually differentiate Rogers from the competition. We think scale is a meaningful advantage that will allow the company to take bold steps to invest in converged technologies that some of its smaller competitors will have a hard time executing. We don’t expect this to be visible in the short term, but believe it is a part of the investment thesis that will contribute to valuations over time.”

* RBC’s Drew McReynolds to $71 from $69 with an “outperform” rating.

“With an eye on our 2025E NAV of $74 per share post the Shaw integration, we believe current levels represent an attractive and timely entry point into the stock, reflecting: (i) close proximity to realizing the bulk of the more than $1-billion in Shaw operating cost synergies through H1/25 driving an attractive 10-per-cent adjusted EBITDA CAGR [compound annual growth rate] (2023E–25E); (ii) what is likely to be a steady de-risking of the stock as visibility on Shaw integration synergies increases, the competitive landscape post-Rogers-Shaw-Quebecor transactions finds a new equilibrium, leverage declines, and management’s track record of improved execution lengthens; (iii) option value on non-core and/or non-telecom asset sales/crystallizations; and (iv) what we believe are recalibrated expectations for wireless ARPU (stable), a sustained tougher cable environment for Internet (telco fibre competition), structural pressure for television (cord-cutting/cord-shaving), and elevated capex (more than $4-billion annually, 19–20-per-cent capex intensity),” he said.

* TD Securities’ Vince Valentini to $82 from $82 with an “action list buy” rating.

“We think Q4/23 results in February could be a bigger catalyst than Q3/23 because we should have more visibility on key debt leverage drivers by then (spectrum auction; non-core asset sales; and 2024 EBITDA/FCF guidance). The Canadian wireless industry is not broken (in other words, we are not in a price war), and the CRTC decision this week (note on that here: LINK) shows that the regulator is not seeking to disrupt the industry, so the only headwind remaining for RCI.B shares, in our view, is above-average debt leverage. We remain confident that debt fears will ease soon, which could push RCI.B shares to much higher levels,” said Mr. Valentini.

* CIBC’s Stephanie Price to $69 from $67 with an “outperformer” rating.


Desjardins Securities analyst Chris Li warns share price volatility is likely to continue for Canadian Tire Corp. Ltd. (CTC.A-T) until better macroeconomic conditions become visible.

However, he does think the retailer’s current valuation “largely reflects” those headwinds, leading him to maintain his “positive long-term view” following Thursday’s quarterly release and announcement of a plan to reduce his workforce by 3 per cent.

“While 3Q had a few puts and takes, we would characterize the results as largely in line, with softer Retail results partly offset by stronger performance in Financial Services,” said Mr. Li. “CTC’s cautious retail outlook reflects softening discretionary spending and increasing competition. These pressures will accelerate in the near term and we have adjusted our estimates accordingly.”

Before the bell on Thursday, Canadian Tire reported normalized earnings per share of $2.96, missing both Mr. Li’s $3.18 estimate and the consensus forecast on the Street of $3.29. He attributed the underperformance to a lower-than-expected favourable impact from the dealer margin sharing agreement (MSA) adjustment ($33-million versus his $80-million).

To reflect “a cautious retail outlook from continued softness in discretionary spending and increasing competition,” Mr. Li reduced his 2023 earnings per share projection by 18 per cent to $11.23 from $13.64, while his 2024 expectation slid by 8 per cent to $13.80 from $15.=

“We expect Retail revenue (excluding Petroleum) to recover by approximately 3 per cent in 2024 (vs down 5 per cent in 2023),” he said. “All else equal, flat revenue would lower our EPS by $1.80, net of cost offsets. There are a few puts and takes with the downturn. On the positive side, we believe CTR’s resiliency is supported by Triangle Rewards, enhanced data analytics (more effective promotions), stronger product assortment with “good, better and best”, owned brands, cost management, etc. CTR’s diverse product mix will also help as we saw in 3Q (essentials up 4 per cent). On the negative side, pressures on discretionary spending will be prolonged by looming mortgage renewals and the impact of higher interest rates. We expect Financial Services earnings to increase by 2 per cent in 2024 (vs down 7 per cent in 2023) assuming unemployment remains under control. Assuming macroeconomic conditions deteriorate, we estimate 70-cent downside to segment EPS. Our downside scenario essentially calls for no earnings growth next year. Applying a 10.5 times P/E (roughly one standard deviation below its 12 times 10-year average) implies a $120 downside valuation.”

Keeping a “buy” recommendation for Canadian Tire shares, Mr. Li lowered his target to $170 from $180 The average target on the Street is $168, according to Refinitiv data.

Other analysts making target adjustments include:

* Scotia’s George Doumet to $160 from $172 with a “sector outperform” rating.

“While there is uncertainty around when trough earnings will occur at the bank (with CTR likely occurring in the next few quarters), we believe a significant amount of pessimism has been baked into valuation (shares trading at 10.4 times NTM P/E vs. 08/09 average of 10 times). This in the context of robust margin management, recently announced capital preservation measures and potential upside resulting from the CTFS strategic review, we view the risk/reward as compelling at current levels,” he said.

* National Bank’s Vishal Shreedhar to $152 from $166 with a “sector perform” rating.

“We consider Q3/23 results to be tepid,” he said. “A major element of the EPS miss vs. NBF is related to a change in accounting of the margin-sharing agreement (MSA; $33-million reported vs. $80-million modeled, or $0.62 EPS delta); though, MSA pressure will persist. Also, higher costs related to share-based compensation impacted EPS by $0.22.”

* RBC’s Irene Nattel to $199 from $205 with an “outperform” rating.

“Results broadly in line, management commentary on the conference call around accelerated shipments to dealers in Q3 and slowing demand for discretionary items supports our cautious view around 2023/2024 financial results. We were already the low on 2023/24 forecasts, but are further moderating our underlying assumptions. Assuming RBC Economic forecasts for modest GDP growth, increase in unemployment and moderating interest rates proves correct, H2/23 and H1/24 should mark trough earnings. While valuation seems attractive investor sentiment is likely to remain tepid until visibility improves,” said Ms. Nattel.

* BMO’s Tamy Chen to $170 from $180 with an “outperform” rating.

“Management commentary was largely consistent with current macro trends,” she said. “The incremental negative is the lower-than-expected retail GM in Q3/23 and 2023 guidance commentary have led us to pare back our GM projections for 2024. We continue to rate CTC shares Outperform as the current stock price arguably reflects much of the macro uncertainties and at some point (we assume starting H2/24), the consumer demand environment should improve.”

* CIBC’s Mark Petrie to $153 from $177 with a “neutral” rating.

* Canaccord Genuity’s Luke Hannan to $167 from $172 with a “buy” rating.


In response to weaker-than-anticipated third-quarter financial results and a “surprise” acquisition, National Bank Financial’s Richard Tse lowered Altus Group Ltd. (AIF-T) to “sector perform” from “outperform” previously.

He was one of four equity analysts to downgrade the Toronto-based provider of asset and fund intelligence for commercial real estate on Friday.

“Besides the FQ3 results, Altus announced a material acquisition which has us taking pause to reflect its impact on valuation as we’re unfamiliar with the asset and from our initial assessment, it’s unclear from our vantage point as to whether we can ascribe a similar target multiple to that business,” he said.

After the bell on Thursday, Altus reported revenue for the quarter of $185.2-million, falling short of both Mr. Tse’s $200-million estimate and the consensus projection on the Street of $197.3-million. Adjusted EBITDA of $29.7-million also missed expectations ($37.1-million and $37.2-million, respectively). While organic recurring revenue was up 13.7 per cent year-over-year, new bookings slid 17.3 per cent.

“While we recognize the revenue correlation with bookings is not paired given the contractual terms of Altus’s engagements, we need to acknowledge it does drive incremental revenue and that the bookings growth is notably lower than what has been a higher normalized run rate,” the analyst said. “Beyond that, 72 per cent of Altus’s AE user base on Cloud continued its positive upward trajectory (up 200 basis points quarter-over-quarter) with expectations that most of the remaining base will be converted over the next year. All in, we believe Altus could miss hitting its $400-million revenue target for its [”higher-valuation” Altus Analytics (AA) segment] this year.”

Concurrent with the quarterly release, Altus announced it has signed definitive agreements to acquire Situs Group, LLC, a commercial real estate valuation and advisory services business known as REVS, for total consideration of US$225-million and Forbury Property Valuations Solutions Limited, a CRE valuation software provider in the Asia Pacific region, for an undisclosed amount

“It’s unclear to us the revenue mix for REVS coming from professional services / consulting and software / tech,” said Mr. Tse. “From our vantage point, it appears Altus is acquiring a channel to sell its existing products. Bottom line, between the soft FQ3 results, challenging macro backdrop in CRE and incremental (acquisition / integration) risk from the above-noted acquisitions, we’re taking pause.”

Mr. Tse dropped his target for Altus shares to $50 from $65. The average is $59.61.

Elsewhere, others downgrading the stock were:

* BMO’s Stephen MacLeod to “market perform” from “outperform” with a $53 target, down from $68.

“We now expect New Bookings to remain under pressure absent a recovery in CRE transaction activity (H2/24E earliest), and the postponed Ontario tax reassessment to weigh through 2024E; these two factors reduce near-term earnings visibility, in our view. While we appreciate the merits of the proposed REVS acquisition, we expect revenue growth to be subdued (similar to Altus’s VMS business) and leverage ticks higher (2024E: 3.1 times funded debt/EBITDA). Based on our revised lower estimates and target, we see balanced risk-reward,” said Mr. MacLeod.

* Eight Capital’s Christian Sgro to “neutral” from “buy” with a $50 target, down from $66.

“Altus reported lackluster results alongside a large acquisition that will lever up the business while scaling the Analytics segment,” he said. “Given continued market uncertainty, leading metrics could reasonably be reaching trough levels; however,we think there is a higher potential for some of this softness to persist through 2024. We think a ‘wait and see’ approach is prudent in the near-term, with full confidence that Altus is unlocking significant strategic value when market conditions improve.”

* Scotia’s Kevin Krishnaratne to “sector perform” from “sector outperform” with a $48 target, down from $66.

“While our view of the company’s industry leading technology (ARGUS) and valuation management services remains very high, we have less conviction on the near-term organic growth outlook given the general pause in capital deployment activity in CRE,” he said. “We believe that a rebound (and resulting acceleration in AA organic growth) is more a matter of when, not if, but would rather wait for clearer signs of a recovery before getting more constructive. Meanwhile, AIF’s $310-million acquisition of REVS (at approximately 5 times sales) does appear to be a strong and complementary asset that can expand the company’s leadership in VMS and drive cross-sell revenue synergies in the mid-term, but it also temporarily elevates leverage (up 3.5 times vs. 2.1 times at end of Q3).”

Others making target adjustments include:

* Canaccord Genuity’s Yuri Lynk to $63 from $73 with a “buy” rating.

* Raymond James’ Brian MacArthur to $25 from $25.50 with an “outperform” rating.

* RBC’s Paul Treiber to $52 from $55 with a “sector perform” rating.


While he continues to believe HLS Therapeutics Inc. (HLS-T) “still has value in its assets and expected to be profitable, albeit at slightly lower levels,” Stifel analyst Justin Keywood thinks “a good ‘2024 story’ is now shifting to 2025.”

Heading to “the sidelines” on the Toronto-based pharmaceuticals company, he lowered his recommendation to “hold” from “buy” previously.

On Thursday, HLS reported third-quarter revenue of US$16-million, up 2 per cent year-over-year but down 3 per cent sequentially and below Mr. Keywood’s US$16.3-million estimate. Adjusted EBITDA of US$5.1-million was also narrowly lower than the US$5.4-million expectation.

“HLS reported Q3 results that were a tad light of expectations and generally a consistent trend with 7/8 quarterly misses,” the analyst said. “However, HLS disclosed that royalties, related to Boston Scientific’s Emblem S-ICD will end in Q4/2023 and will impact approximately US$6-7-million of revenue and what we estimate to be similar EBITDA in 2024 or 30 per cent of the LTM [last 12-month] total run-rate. The news is unexpected and contrary to the Sept. 2020 HLS press release when the assets were acquired. Although, a new CEO has been in-place since May 2023, we see substantial headwinds to navigate through over the NTM [next 12 months] and cut our forecasts, leading to a new Hold rating.”

He added: “We cut the expected royalty contributions for HLS in 2023 from US$11.5-million to US$3.6-million, consistent with the company’s new communication. This is contrary to the Sept. 2020 press release, when the assets were acquired and stated to be stable in a long-duration portfolio ‘through 2032 at a minimum’. HLS does have a growth royalty asset in Xenpozyme, in an early launch phase and expected to make up for some of the headwinds. Xenpoxyme may also have greater value in a liquidity event. We also cut our Vascepa forecasts.”

With his reduced forecast, Mr. Keywood dropped his target for HLS shares to $5, a low on the Street, from $12.25. The current average is $10.


In other analyst actions:

* CIBC World Markets’ Kevin Chiang downgraded Airboss of America Corp. (BOS-T) to “underperformer” from “neutral” with a $3.75 target, dropping from $6 and below the $5.75 average on the Street. Elsewhere, TD Securities’ Tim James raised his target to $8.50 from $7 with a “speculative buy” rating.

“We recognize its shares are down 48 per cent year-to-date, but we are moving to the sidelines given the continued lack of earnings visibility,” said Mr. Chiang. “We do acknowledge that its order pipeline is large and BOS’s valuation is undemanding, but we suspect that any large ADG orders are not likely until 2024. Even then, given the ‘boom-bust’ profile BOS has exhibited in its earnings through and coming out of the pandemic, we suspect any re-rate in the stock will require a more consistent level of execution against its backlog, which will take time.”

* National Bank’s Zachary Evershed dropped his Adentra Inc. (ADEN-T) target to $47 from $56, keeping an “outperform” rating, while Stifel’s Ian Gillies lowered his target to $34 from $36 with a “buy” rating. The average is $41.08.

* ATB Capital Markets’ Chris Murray lowered his Street-high AutoCanada Inc. (ACQ-T) target to $62 from $70. Other changes include: CIBC’s Krista Friesen to $22.50 from $26 with a “neutral” rating and BMO’s Tamy Chen to $24 from $26 with a “market perform” rating. The average is $30.51.

“The stock closed down over 20 per cent on the headline EPS miss,” said Ms. Chen. “Versus BMO, the miss was largely in higher opex, partially offset by better GPUs in all segments. This quarter suggests that many dynamics of the past two years (strong used vehicle volume and GPU, F&I GPU) are beginning to normalize. The one area that remains surprisingly strong is new vehicle demand. We are cautiously optimistic on ACQ’s agreement with Kijiji while we take a wait-and-see stance on Project Elevate.”

* CIBC’s Jacob Bout raised his Bird Construction Inc. (BDT-T) target to $14.50 from $12.50 with an “outperformer” rating. The average is $14.75.

* Scotia’s Mario Saric raised his Boardwalk REIT (BEI.UN-T) target to $77.50 from $76 with a “sector perform” rating. Other changes include: National Bank’s Matt Kornack to $80 from $79 with an “outperform” rating and CIBC’s Dean Wilkinson to $73.50 from $70 with a “neutral” rating. The average is $76.10.

* National Bank’s Rupert Merer trimmed his Boralex Inc. (BLX-T) target by $1 to $38 with an “outperform” rating, while BMO’s Ben Pham lowered his target to $36 from $40 with an “outperform” rating. The average is $38.70.

“Q3/23 results were not as bad as feared and while BLX (like many of its peers) is facing some project development delays (mainly NY solar), the upshot is higher potential returns on resubmission into upcoming solicitations. In the meantime, the balance sheet is in good shape and BLX has one of the lowest payout ratios of the renewable group (approximately 50 per cent vs. 90-100 per cent). Similar to peers, we are lowering our target,” said Mr. Pham.

* JP Morgan’s Ken Worthington raised his Brookfield Corp. (BN-N, BN-T) target to US$48 from US$47 with an “overweight” recommendation. Other changes include: BMO’s Sohrab Movahedi to US$42 from US$45 with an “outperform” rating, Scotia’s Mario Saric to US$45 from US$47.50 with a “sector outperform” rating, TD Securities’ Cherilyn Radbourne to US$55 from US$54 with an “action list buy” rating, CIBC’s Dean Wilkinson to US$42 from US$47 with an “outperformer” rating and KBW’s Michael Brown to US$37 from US$36 with a “market perform” rating. The average is US$45.69.

“Overall, BN delivered a decent DE beat, giving us confidence that the thesis is heading in the right direction, with a ‘Soft’ landing = particularly constructive for sentiment, in our view,” said Mr. Saric. “Valuation remains really cheap, bordering on highly compelling. While BN should naturally appeal to ‘Value’ investors, we think ‘Growth’ folk should take a look too.”

* National Bank’s Matt Kornack bumped his CAP REIT (CAR.UN-T) target to $53.50 from $50 with an “outperform” rating. Other changes include: Echelon Partners’ David Chrystal to $56.50 from $57 with a “buy” rating and CIBC’s Dean Wilkinson to $50 from $55 with a “neutral” rating. The average is $55.11.

* TD Securities’ Aaron MacNeil raised his CES Energy Solutions Corp. (CEU-T) target to $5.50, above the $4.66 average, from $5 with a “buy” rating, while ATB Capital Markets’ Tim Monachello bumped his target to $5 from $4.75 with an “outperform” rating.

* CIBC’s Sumayya Syed lowered her Choice Properties REIT (CHP.UN-T) target to $15, matching the average, from $15.50 with a “neutral” rating.

* TD Securities’ Tim James raised his Chorus Aviation Inc. (CHR-T) target to $5 from $4.75 with a “buy” rating, while Scotia’s Konark Gupta cut his target to $3.50 from $4 with a “sector perform” rating. The average is $3.93.

“We believe the CPA with Air Canada provides Chorus with the long-term cash flow necessary to continue meeting financial obligations, and a source of equity to finance growth in its leasing portfolio. We believe the eventual upside earnings potential RAL provides is not reflected in the current valuation,” said Mr. James.

* RBC’s Walter Spracklin cut his CCL Industries Inc. (CCL.B-T) target to $72 from $75 with an “outperform” rating. Other changes include: BMO’s Stephen MacLeod to $76 from $77 with an “outperform” rating and Raymond James’ Michael Glen to $70 from $71 with a “market perform” rating. The average is $75.44.

“: We are taking a largely neutral view on the results and (near-term) outlook provided by the company [Thursday],” said Mr. Spracklin. “While Q3 was in-line, the Q4 outlook was somewhat muted (and by our measure below expectations); however on the other hand, sentiment (and share price trends) coming into the quarter were suggestive that the quarter and outlook would be much worse. In the end, we believe that ramping up acquisitions (noting leverage very low at 1.37 times) would be a key driver of growth and valuation going forward; however we have not seen strong evidence of a pick-up to date.”

* Scotia’s Phil Hardie trimmed his CI Financial Corp. (CIX-T) target to $17 from $17.50, which is the current average, with a “sector perform” rating.

“Financial market performance is likely the biggest source of risk, opportunity, and uncertainty for CI shareholders,” said Mr. Hardie. “As such, we continue to view CI as a high-beta play that can offer solid upside through sustained bull markets but outsized downside risk through a steep and protracted market sell-off.”

* RBC’s Drew McReynolds raised his Cineplex Inc. (CGX-T) target to $15, exceeding the $13.25 average, from $14 with an “outperform” rating, while BMO’s Tim Casey bumped his target to $12.50 from $11 with a “market perform” rating.

* RBC’s Paul Treiber increased his Constellation Software Inc. (CSU-T) target to $3,400 from $3,300, keeping an “outperform” rating. Other changes include: BMO’s Thanos Moschopoulos to $3,350 from $3,150 with an “outperform” rating and Raymond James’ Steven Li to $3,150 from $2,850 with a “market perform” rating. The average is $3,125.71.

“Constellation reported a solid quarter, with adj. EBITDA up 39 per cent year-over-year and normalized adj. EPS up 56 per cent year-over-year, both above consensus,” said Mr. Treiber.” Constellation saw multiple operational improvements in the quarter, including better organic growth, higher core margins, and improvement at Altera. Even though Q3 acquired revenue was lighter than expected, the shortfall reflects timing and lumpiness, in our view; we believe Constellation’s M&A model is scaling, as shown by record YTD capital deployed on acquisitions.”

* CIBC’s Sumayya Syed cut her Crombie REIT (CRR.UN-T) target to $17 from $18 with an “outperformer” rating, while Scotia’s Mario Saric lowered his target to $16.75 from $18.25 with a “sector outperform” rating. The average is $15.54.

* Canaccord Genuity’s Robert Young raised his Docebo Inc. (DCBO-Q, DCBO-T) target to US$50 from US$45 with a “buy” rating. Other changes include: Scotia’s Kevin Krishnaratne to US$50 from US$45 with a “sector outperform” rating, National Bank’s Richard Tse to US$60 from US$50 with an “outperform” rating, ATB Capital Markets’ Martin Toner to $95 from $90 with an “outperform” rating and CIBC’s Stephanie Price to $68.50 from $65 with an “outperformer” rating. The average is $71.79.

* CIBC’s Dean Wilkinson cut his Dream Residential REIT (DRR.UN-T) target to $9 from $10.50, below the $10.96 average, with an “outperformer” rating.

* RBC’s Keith Mackey cut his Enerflex Ltd. (EFX-T) target to $12 from $14 with an “outperform” rating, while ATB Capital Markets’ Tim Monachello lowered his target to $11 from $13 with an “outperform” rating. The average is $11.39.

“Enerflex’s 3Q23 results allayed near-term market concerns with the company generating FCF, recording strong bookings, and reaffirming FY23 guidance range. We remain constructive on the stock given potential for FCF inflection on strong fundamentals and merger integration progress,” said Mr. Mackey.

* Raymond James’ Brian MacArthur lowered his Franco-Nevada Corp. (FNV-N, FNV-T) target to US$163 from US$173 with an “outperform” rating. Others making changes include: National Bank’s Shane Nagle to $205 from $210 with a “sector perform” rating and BMO’s Jackie Przybylowski to $219 from $222 with an “outperform” rating. The average is $205.16.

* RBC’s Sabahat Khan lowered his High Liner Goods Inc. (HLF-T) target to $13 from $15 with a “sector perform” rating. The average is $15.33.

“High Liner Foods Inc. reported Q3 Sales and Adjusted EBITDA below RBC forecasts. Looking ahead, we reiterate our cautious view on HLF’s shares given the potential for the uncertain macro backdrop to continue impacting consumer spending in the company’s channels,” said Mr. Khan.

* CIBC’s Sumayya Syed reduced her Granite REIT (GRT.UN-T) target to $84 from $93 with an “outperformer” rating. The average is $89.06.

* Canaccord Genuity’s Aravinda Galappatthige reduced his target for Illumin Holdings Inc. (ILLM-T) to $3.25 from $4 with a “buy” rating. Other changes include: TD Securities’ Vince Valentini to $2 from $3 with a “hold” rating and RBC’s Drew McReynolds to $2.50 from $3 with an “outperform” rating. The average is $3.31.

* National Bank’s Rupert Merer moved his Innergex Renewable Energy Inc. (INE-T) target to $15.50 from $16 with an “outperform” rating, while RBC’s Nelson Ng cut his target to $13 from $16, keeping an “outperform” rating. The average is $14.33.

“The company is progressing well on its organic growth initiatives that should generate attractive returns. However, weak results from the operating portfolio, an elevated payout ratio, and a levered balance sheet keep us on the sidelines. We are reducing our price target ... to reflect the elevated interest rate environment, high payout and levered balance sheet,” said Mr. Ng.

* RBC’s Darko Mihelic raised his Manulife Financial Corp. (MFC-T) target to $32 from $30 with a “sector perform” rating. The average is $28.83.

“MFC’s core EPS was solid overall at $0.92 versus our estimated $0.79. We model good CSM recognition growth in Asia as we believe the segment will be a driver of growth for MFC, even though there may be some weakness in certain Asian regions. We believe there may be continued CRE pressures in the near term, but we believe MFC’s holdings are generally long term, probably well-marked, and not too dissimilar from what other lifecos might own. While we like MFC’s Asia business, the U.S. business continues to have challenges that prevent a higher valuation,” said Mr. Mihelic.

* BMO’s Ben Pham lowered his Northland Power Inc. (NPI-T) target to $31 from $34 with an “outperform” rating. The average is $32.25.

“After underperforming for most of 2023 on concerns around its off-shore wind projects, NPI shares have held up recently despite continued negative headline news in global renewables. As NPI executes on its projects under construction and de-risks key milestones including closing the Gentari sell-down, we expect the market to better appreciate the step change increase in FCF beginning in 2026. Timing the shift in sentiment perfectly will be difficult and as such we recommend owning ahead,” said Mr. Pham.

* RBC’s Irene Nattel cut his Park Lawn Corp. (PLC-T) target to $25 from $27 with an “outperform” rating. The average is $27.44.

“Q3/23 results a hair below forecast, underlying trends reflective of normalization of death rates and lower pre-need sales. Early look at reclassification of assets/liabilities to reflect imminent sale of under-performing assets reaffirms our view that while overall earnings will take a step back, surfacing of capital to fund high-grading of assets is a very sensible decision from this highly focused, return-oriented management team. Our forecasts do not yet reflect the asset sales pending details around line items, but we reiterate our view that net impact should be very modest with NT EPS dilution estimated 2 per cent,” said Ms. Nattel.

* Desjardins Securities’ Jerome Dubreuil raised his Quebecor Inc. (QBR.B-T) target to $38 from $36.50 with a “buy” rating. Other changes include: Scotia’s Maher Yaghi to $36 from $35.50 with a “sector perform” rating and National Bank’s Adam Shine to $39 from $38 with an “outperform” rating. The average is $38.13.

“It is increasingly clear that QBR is adopting a prudent approach to its Freedom integration,” said Mr. Dubreuil. “We believe the Freedom brand relaunch is making the industry more competitive, but at the same time it does not look like the company is aiming for pure disruption. While this approach could potentially delay the brand’s growth, it does reduce operational and financial risk.”

* National Bank’s Maxim Sytchev bumped his RB Global Inc. (RBA-N, RBA-T), formerly known as Ritchie Bros. Auctioneers, target to US$73 from US$71 with an “outperform” rating. Other changes include: RBC’s Sabahat Khan to US$73 from US$75 with an “outperform” rating, Raymond James’ Steve Hansen to US$78 from US$75 with an “outperform” rating and Scotia’s Michael Doumet to US$74 from US$76 with a “sector outperform” rating. The average is US$71.86.

“RB Global Inc. reported Q3 results that were well ahead of RBC/consensus forecasts, reflecting strong results from both Ritchie Bros.’ “legacy” business and the acquired IAA business,” said Mr. Khan. “The strong results were somewhat overshadowed by a customer loss at IAA. While this is a negative development (see below for a more detailed perspective), we believe the strong recent results, progress with synergy realization, a supportive operating backdrop, and continued leverage reduction position RBA well over the coming year.”

* JP Morgan’s John Ivankoe moved his Restaurant Brands International Inc. (QSR-N, QSR-T) target to US$74 from US$73 with an “overweight” rating. The average is US$78.55.

* Scotia’s Michael Doumet bumped his Russel Metals Inc. (RUS-T) target to $43 from $42 with a “sector perform” rating, while Stifel’s Ian Gillies raised his target to $46 from $45.50 with a “buy” rating. The average is $43.13.

* CIBC’s Dean Wilkinson lowered his target for SmartCentres REIT (SRU.UN-T) to $30 from $31 with an “outperformer” rating. The average is $27.07.

* CIBC’s Stephanie Price raised her Softchoice Corp. (SFTC-T) target to $19 from $17.50 with a “neutral” rating, while TD Securities’ David Kwan increased his target to $26 from $24 with a “buy” rating. The average is $21.

* Raymond James’ Frederic Bastien increased his Stantec Inc. (STN-T) target to $105 from $100, exceeding the $98.64 average, with an “outperform” rating.

“Our target price increase follows the release of exceptionally strong 3Q23 results [Thursday] and very positive messaging about what the future holds for the engineering consultancy,” he said. “STN is punching above its weight in organic revenue and backlog growth, capitalizing on strong secular trends, and making sustainability core to everything it does. For these reasons, we believe our Best Pick for 2023 has more runway ahead.”

* Stifel’s Ian Gillies raised his Stelco Holdings Inc. (STLC-T) target to $41 from $37 with a “buy” rating. Other changes include: JP Morgan’s Michael Glick to $45 from $40 with a “neutral” rating, Cormark’s David Ocampo to $53.50 from $50 with a “buy” rating and National Bank’s Maxim Sytchev to $47 from $43 with a “sector perform” rating. The average is $45.86.

“HRC [hot rolled coil] ups-and-downs have thrown a number of curve balls over the last several months, and now it’s certainly a tailwind,” said Mr. Sytchev. “Because we did not have enough conviction to upgrade during the auto strike, today’s share price move is commensurate with a better industry body language. We have upped our numbers accordingly but from a risk/reward skew find it’s a bit too late to chase the stock at this level.”

* Eight Capital’s Ty Collin became the first analyst to initiate coverage of Sucro Ltd. (SUG-X), giving it a “buy” rating and $15.50 target.

“Sucro is an integrated sugar company with operations throughout the Americas that include sourcing, refining, and managing the logistics of sugar for customers across North America,” he said. “We believe that Sucro is the only publicly traded company that provides pure-play exposure to the North American sugar industry, a reliable and growing sector that is ripe for an innovative new entrant. The North American sugar industry has been through a decades-long consolidation process, leaving the entire US$14-billion market with just a handful of major suppliers and a shortage of capacity. With rising logistical costs and supply chain risks, customers are highly motivated to support an innovative new competitor like Sucro, who has built the first new sugar refinery in Canada in decades and another new sugar refinery in the U.S. Founder and CEO, Jonathan Taylor, detected this opportunity early on and assembled an expert management team to position Sucro as a first mover to disrupt the aged and inefficient sugar oligopoly. We believe that attractive industry dynamics, combined with Sucro’s low-capital-cos operations and geographically advantaged assets, position the Company to capture share and grow within a growing and profitable industry.”

* RBC’s Greg Pardy bumped his Suncor Energy Inc. (SU-T) target to $53 from $51 with an “outperform” rating. The average is $54.63.

“As a multi-quarter turnaround story, Suncor’s solid third-quarter results provided just a sample of how much cash flow/free cash flow the company can generate as its operating performance steadily improves,” said Mr. Pardy.

* CIBC’s Robert Catellier raised his target for Tidewater Renewables Ltd. (LCFS-T) to $15 from $14, keeping an “outperformer” rating. The average is $15.

* RBC’s Drew McReynolds increased his target for Verticalscope Holdings Inc. (FORA-T) to $13, above the $7.45 average, from $11 with an “outperform” rating, while TD Securities’ Vince Valentini bumped his target to $7.50 from $6.50 with a “hold” rating.

* CIBC’s Hamir Patel reduced his Western Forest Products Inc. (WEF-T) target to 85 cents, matching the average, from $1 with a “neutral” rating.

* RBC’s Chris Dendrinos cut his Westport Fuel Systems Inc. (WPRT-Q, WPRT-T) target to US$10 from US$12 with a “sector perform” rating. The average is US$12.10.

* ATB Capital Markets’ Chris Murray raised his WSP Global Inc. (WSP-T) target to $210 from $200 with a “sector perform” rating. Other changes include: Scotia’s Michael Doumet to $217 from $216 with a “sector outperform” rating, Desjardins’ Benoit Poirier to $210 from $208 with a “buy” rating, CIBC’s Jacob Bout $208 from $204 with an “outperformer” rating, TD Securities’ Michael Tupholme to $220 from $215 with a “buy” rating and RBC’s Sabahat Khan to $212 from $210 with an “outperform” rating. The average is $208.

“WSP reported strong 3Q results with positive organic growth across all regions,” said Mr. Poirier. “Overall, we are not overly concerned with the potential for some IIJA funding delays as this is a long-term tailwind (peak in 2026–27) and steps are being taken to get money out the door faster. We believe WSP is well-positioned to continue increasing its win rate as 62 per cent of the disbursements so far have been allocated to transportation which, when combined with infrastructure, represents close to half of WSP’s revenue.”

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 22/04/24 3:00pm EDT.

SymbolName% changeLast
Adentra Inc
Airboss America J
Altus Group Ltd
Autocanada Inc
Bird Construction Inc
Boardwalk Real Estate Investment Trust
Boralex Inc
Brookfield Corporation
CDN Apartment Un
Canadian Tire Corp Cl A NV
Ces Energy Solutions Corp
Choice Properties REIT
Chorus Aviation Inc
Ccl Industries Inc Cl B NV
CI Financial Corp
Cineplex Inc
Constellation Software Inc
Crombie Real Estate Investment Trust
Docebo Inc
Dream Residential REIT
Enerflex Ltd
Franco-Nevada Corp
High Liner
Hls Therapeutics Inc
Granite Real Estate Investment Trust
Acuityads Holdings Inc
Innergex Renewable Energy Inc
Manulife Fin
Northland Power Inc
Park Lawn Corp
Quebecor Inc Cl B Sv
Restaurant Brands International Inc
Rb Global Inc
Rogers Communications Inc Cl B NV
Russel Metals
Smartcentres Real Estate Investment Trust
Softchoice Corp
Stantec Inc
Stelco Holdings Inc
Sucro Limited
Suncor Energy Inc
Tidewater Renewables Ltd
Verticalscope Holdings Inc
Western Forest Products Inc
Westport Fuel Systems Inc
WSP Global Inc

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