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

Following another quarter of outperformance, Shopify Inc. (SHOP-N, SHOP-T) continues to its multi-product growth, according to Citi’s Tyler Radke, who touted its “robust” gross merchandise volume and “significant” profitability beat.

He was one of a large group of equity analysts to raise their financial forecast for the Ottawa-based e-commerce in response to Thursday’s release of better-than-anticipated third-quarter results, which send its TSX-listed shares soaring over 21 per cent

“Shopify’s Q3 results were about as clean as we’ve seen in Sep-Q reporting, especially in SMB software,” Mr. Radke said. “Among many positives, we’d highlight GMV growth of 21.8 per cent vs. our 17.5 per cent, which notched its highest growth since the stimulus quarters of 2021 and was driven by strength in both new merchant growth as well as SSS strength. The inflection in profitability with nearly $100-million (15 per cent) in lower opex vs. expectations with solid flow through also signaled the company is serious about driving margin expansion (and also very conservative on guidance). The positive changes at SHOP this year have been positive but much of it is likely priced in and expect growth trends to moderate into 1Q24 as macro deteriorates and SHOP laps broad-based price increases which boosted recent results.”

Shopify reported GMV growth of 22 per cent year-over-year to US$56.2-billion, topping Mr. Radke’s estimate by 4.3 per cent and the Street’s forecast by 3.8 per cent. Total revenue gained 25.5 per cent to $1.71-billion, also exceeding estimates ($1.676-billion and US$1.671-billion, respectively).

“The strong top-line results and lower-than-expected operating expenses flowed through to robust operating profit of $271-million, which was well over $100-million compared to the street’s/our expectations,” he said. “Shopify achieved positive FCF for the fourth consecutive quarter, and FCF margin was 16 per cent.

“Given Shopify’s prudent posture when it comes to guidance, we think management commentary for 4Q high-teens revenue growth (excl. a 4-500 basis point impact from the logistics business sale) which was ~in-line with our estimates/consensus is conservative and reflects a continued healthy backdrop and expectations of continued share gains. GM is forecast to be lower than 3Q as it has been historically as Payments revenue will constitute a larger mix of overall revenue due to the holiday-shopping season. Guidance for a low-single digit percentage decline in GAAP OpEx in 4Q and full-year CapEx of $45-million (inclusive of $33-million in 1H related to logistics) suggests continued commitment to operating discipline.”

Maintaining a “neutral” rating for Shopify shares, Mr. Radke raised his target to US$74 from US$62 after increasing his financial projections through 2025. The average target on the Street is US$66.74, according to Refinitiv data.

“While the in-line 4Q revenue guidance limits some of the top-line upside flow through, our margins move up more meaningfully reflecting the significant profitability outperformance in 3Q and solid Q4 outlook. Our TP increases,” he said.

“We rate Shopify shares as Neutral/High Risk (2H) because while we appreciate the magnitude of the TAM [total addressable market], an acceleration of secular tailwinds coming into focus, a strong management team, and record of execution, we believe much of this is priced in at the current multiple—which earns a significant premium to the implied multiple of its growth/margin framework and implies a 10-year revenue CAGR [compound annual growth rate] that appears potentially too high.”

Other analysts making changes include:

* ATB Capital Markets’ Martin Toner to $105 (Canadian) from $95 with an “outperform” rating.

“Reaching profitability sooner than expected has a positive impact on our target price and the top-of-funnel strength of results driven by enterprise customers give us more confidence in the duration of growth. Despite the demanding valuation, we see further near-term upside to Shopify’s shares,” said Mr. Toner.

* TD Securities’ Daniel Chan to US$65 from US$60 with a “hold” rating.

“It is clear that Shopify with Jeff Hoffmeister in the CFO chair is far more focused on profitable growth and FCF,” said Mr. Chan. “Operating margin far exceeded expectations and could expand further. Mr. Hoffmeister highlighted a far more disciplined approach to investments and not wanting to unwind all the hard work done to achieve these margins. We believe margin could continue to expand from here, should management choose to do so, but there is little visibility on a potential mid-term margin range, perhaps to provide optionality to invest more if needed. Nonetheless, it is clear that the company will not compromise margin for growth as aggressively going forward.”

* CIBC’s Todd Coupland to US$82 from US$78 with an “outperformer” rating.

“Shopify reported Q3 revenue, EPS, and free cash flow that were better than expected. This confirms our view that a streamlined Shopify is poised to overachieve FactSet expectations and remains our top pick for 2023. Despite the 20-per-cent share price increase following the strong Q3 report, these factors support our recommendation to buy Shopify’s shares. The next potential share price catalyst will be the Shopify Investor Day on December 5 in New York,” said Mr. Coupland.

* D.A. Davidson’s Gil Luria to US$75 from US$73 with a “buy” rating.

* Evercore ISI’s Mark Mahaney to US$80 from US$74 with an “in-line” rating.

* Wedbush’s Scott Devitt to US$66 from US$62 with an “outperform” rating.

* Baird’s Colin Sebastian to US$75 from US$70 with an “outperform” rating.


Calling its better-than-expected third-quarter results “stout” and “indicative of the accelerated and expanded return potential of the company,” National Bank Financial analyst Dan Payne raised his recommendation for Baytex Energy Corp. (BTE-T) to “outperform” from “sector perform” on Friday, expecting “recent well successes and massive free cash projections (30-per-cent Q4/23 FCF yield forecast) to support accelerated deleveraging and returns.”

After the bell on Thursday, the Calgary-based company reported total production of 150,600 barrels of oil equivalent per day, falling in line with the consensus forecast of 150,000 barrels. Cash flow per share of 68 cents beat the Street’s projection by 3 cents.

“This being the first full quarter of the consolidated entity, volumes and returns outpaced expectations, with strong realizations (up 15 per cent quarter-over-quarter) and cash costs intact (up 5-10 per cent quarter-over-quarter) to support an expanded $42/boe cash netback (up 25 per cent quarter-over-quarter),” said Mr. Payne. “Sequential production growth was generated under a 70-per-cent payout ratio, which suggests a 15-per-cent FCF yield.”

In a research note titled Textbook Portfolio, the analyst said Baytex displayed “strength across the board.”

“Assets continue to positively evolve across its core projects, with current production pressing through 155 mboe/d (and expected to average 160 mboe/d in Q4/23), with notable highlights in: a) Its initial operated Eagle Ford program (the most significant validation of the value of its acquisition) proved strong rates (1,495 boe/d, 78-per-cent liquids) and capital efficiencies (10 per cent ahead of forecast well costs), which should compound its sustainability profile; notably, Eagle Ford volumes are trending around 92 mboe/d (60 per cent of corp.), b) Peavine Clearwater results continued to be prolific (725 bbl/d), with production in the play pressing through its ceiling at 16.4 mboe/d (up 20 per cent quarter-over-quarter), and c) Six-well Pembina Duvernay commercialization program yielded solid results in support of visible growth (950 boe/d, 89-per-cent liquids),” he said.

“With those significant tailwinds, corporate guidance remains intact, with a view towards generating a 30-per-cent FCF yield through Q4/23, which in association with an accelerated share buyback program (2 per cent bought back in Q3/23) in addition to its prevailing cash dividend (1-2-per-cent yield) and further deleveraging (debt expected to exit the year at $2.5-billion, or 1.0 times Q4 D/CF, with next return of capital inflection anticipated in 2025 upon attaining total debt of $1.5-billion).

Mr. Payne raised his target for Baytex shares to $9.25 from $8.50. The average is $7.77.

Elsewhere, other changes include:

* Canaccord Genuity’s Mike Mueller to $8 from $7.50 with a “buy” rating.

* TD’s Menno Hulshof to $7.50 from $7 with a “buy” rating.


National Bank Financial analyst Maxim Sytchev thinks “it’s too late to sell” Colliers International Group Inc. (CIGI-Q, CIGI-T), and now recommends “patient investors looking over the interest rate valley can start picking at these levels,” see it trading at “a normalized multiple on close to trough earnings.”

“This seems like a decent risk/reward dynamic,” he added.

On Thursday, the Toronto-based commercial real estate services provider reported third-quarter revenue of US$1.056-billion, down 5 per cent year-over-year and 4 cents below the Street’s expectation of US$1.096-billion due largely to a 25-per-cent drop in non-recurring revenue service lines. Adjusted eanrings per share came in at US$1.19, missing both Mr. Sytchev’s US$1.76 estimate and the consensus projection of US$1.76.

While calling it a “rare” miss for the company and emphasizing rate volatility is “materially hindering” liquidiy, Mr. Sytchev said Colliers “continues to execute despite macro headwinds.”

“The inverse correlation between rates and CIGI have played with a negative twist,” he said in a research note. “With long-dated rates seemingly stabilizing, we seem to be finding a floor on the shares. When tracking Capital Markets / Leasing declines, CIGI is doing better vs. peers, implying market share gains (CBRE print directionally neutral for CIGI as we and Street model transactional compression); Capital Markets had a $1.2-billion top line in 2021; in 2023 it will be in the $680-million range. We could slide further from there but likely by not much. Outsourcing & Advisory business is growing and so will Investment Management.

Maintaining an “outperform” recommendation, he lowered his target for Colliers shares to US$120 from US$131. The average target is US$121.50.

“Traditionally, Q4 is the period of peak revenue given timing of fund closings and easier comps on the transactional side by year-end,” he said. “On the other side of the ledger, we model 8-per-cent and 6-per-cent organic growth in 2024 (from double-digit growth previously modeled) for IM and Outsourcing as recurring revenue sources are expected to continue their high-single digit growth (we are not expecting any significant M&A). Our EBITDA is flat year-over-year with a slight increase in margin as variable cost savings flow through.”

Elsewhere, others making changes include:

* Scotia’s Michael Doumet to US$109 from US$122.50 with a “sector outperform” rating.

“Following the rapid rise in interest rates, tighter credit availability, and heightened macro uncertainty – and the weaker results from its peers – we believe a softer 3Q23 and a 2023 guidance cut was anticipated,” said Mr. Doumet. “However, the 2023 guidance cut was deeper than expected and naturally resets our 2024E EBITDA lower. While visibility on the timing of a recovery remains low, its eventuality, and a firmer performance at O&A and IM, suggest previous 2023 EBITDA expectations should now be those of 2024. Timing the bottom has been a near-impossible endeavor for the real estate services group, particularly as rising rates incrementally weighed on profit levels and deferred the expectation of a recovery. That being said, we believe CIGI shares are at least near the bottom. With cycle-resilient O&A and IM accounting for more than 70 per cent of CIGI’s EBITDA and CM EBITDA near trough, we believe CIGI’s trading multiple should anchor toward the upper end of its historical range. While we see some downside risk to 4Q23 EBITDA, we believe near-term risks are largely reflected in the share price. CIGI shares trade at 10.2 times EV/EBITDA on our 2024E vs. its historical range of 8.0 times to 14.0 times.”

* RBC’s Jimmy Shan trimmed his target to US$121 from US$130 with an “outperform” rating.

“Colliers’ relative price action to global brokerage peers reflects the lower guidance despite its quarter being relatively better,” said Mr. Shan. “We think most factors affecting CIGI are cyclical in nature and are impacting the transactional segments. O&A remains strong and IM is resilient. What’s changed is transaction activities and fundraising are slower. There are some secular factors to watch for. We have lowered our 2023E-2025E AEBITDA by 7-8 per cent. CIGI now trades in line with global brokerage peers when historically it’s traded at 1 times premium and thus, the sell off looks a little overdone.”

* Raymond James’ Frederic Bastien to US$125 from US$140 with a “strong buy” rating.

“We are cutting our target price on Colliers International ... after management lowered the bar on the seasonally strong fourth quarter and conveyed a cautious outlook for Capital Markets and Leasing activity well into 1H24. As it pertains to our recommendation, we are staying the path. Carrying a Strong Buy on the stock throughout 2023 has been a poor choice in hindsight, but giving up on it here would be just as daft a decision, in our view. We base our recommendation on 18 years of (mostly) positive experience covering this unique enterprising platform, and a steadfast belief CIGI will create substantial shareholder value from here,” said Mr. Bastien.

* BMO’s Stephen MacLeod to US$107 from US$131 with an “outperform” rating.


Stifel analyst Martin Landry said the third-quarter results further reinforced his bullish view of Gildan Activewear Inc. (GIL-N, GIL-T).

“Our 2024 forecasts remain mostly unchanged as we were already modeling strong operating margins for 2024 but the added visibility increases our confidence in our estimates. While revenue growth may be limited in 2024, we expect EPS to increase by 15 per cent year-over-year. This is despite the increase in our tax rate assumption to 15 per cent,” he said.

Before the bell on Thursday, the Montreal-based company reported revenue of US$870-million for the quarter, up 2 per cent year-over-year, exceeding both Mr. Landry’s US$833-million estimate and the Street’s expectation of US$843-million and reversing a negative growth trend of the last three quarters. Earnings per share of 74 US cents fell 12 per cent year-over-year but also topped forecasts (71 US cents and 72 US cents, respectively).

While Gildan lowered its full-year EPS guidance, expecting it come in at the low end of its previous US$2.55-US$2.65 range, Mr. Landry said it was not a surprise, noting he was already projecting US$2.55 and the Street was at US$2.56.

“Gildan continued to outperform the industry with activewear point-of-sale up mid-single-digits vs the industry down 5-15 per cent in North America,” he said. “Management discussed the potential for 2024 operating margins to exceed the top-end of its long-term range of 18-20 per cent as the company’s cost structure improves in 2024. We believe this comment explains in part why Gildan’s shares rose 16 per cent on the day as it reassured investors on the company’s outlook.”

“Management discussed a scenario where 2024 operating margins could exceed the company’s long-term target of 18-20 per cent on lower production costs. Our $2.92 EPS estimate for 2024 remains unchanged as we were already modeling operating margins of 20.3 per cent. This optimistic scenario could derail if the economy slows down further, which would create pressure on revenues and reduce fixed cost absorption. While our revenue estimates are not too demanding, expecting a growth rate of 1 per cent year-over-year, there is a risk that distributors and retailers continue to de-stock inventory in 2024.”

Touting its “strong” return on invested capital and “healthy” balance sheet, Mr. Landry raised his target for Gildan shares to US$37 from US$34, keeping a “buy” rating. The average is US$37.87.

“2024 is setting up for a strong year for Gildan driven by lower cotton costs,” he said. “EBIT margins are expected to be at the high-end of the company’s target range of 18-20 per cent in Q4/23 despite a weak product mix. In our view, this dynamic should continue into 2024, and we forecast EBIT margins of 20.3 per cent, up 297 basis points year-over-year. Hence, despite limited top-line growth next year; EPS could increase in the mid-teens-per-cent year-over-year and act as a catalyst for the shares.”

Elsewhere, other changes included:

* RBC’s Sabahat Khan to US$39 from US$36 with an “outperform” rating.

Overall, Gildan’s Q3 results reflected revenue and Adjusted EPS that were modestly above RBC/consensus expectations,” said Mr. Khan. “The company revised its 2023 revenue and Adjusted EPS guidance lower (Adjusted EBIT margin maintained) due to the softer demand trends and the uncertain macro backdrop. ... On the call, management highlighted soft demand in certain International markets (e.g., seeing de-stocking in Europe, Asia POS was down high single-digits to low double digits) and price pressures across all International geographies, which is leading to some degree of caution. Additionally, ‘trade-down’ behavior among consumers continued within the broader Activewear category this quarter (recall that at Q2 reporting, management pointed to mix shift away from hoodies and toward crew-necks, which are 40 per cent cheaper). On the other hand, Gildan’s U.S. business continues to perform well, with positive POS trends in both Activewear and Underwear & Hosiery through Q4. Looking ahead, our focus now shifts to what demand trends could look like in 2024, where the biggest uncertainty for us is on the macro backdrop and the impact that a weak macro environment could have on consumer spending.”

* Desjardins Securities’ Chris Li to $53 from $48 with a “buy” rating.

“As expected, 3Q results reflected near-term industry headwinds, and management revised 2023 sales and EPS guidance to the lower end of its range,” said Mr. Li. “We are forecasting solid EPS growth of 16 per cent in 2024, supported by low-single-digit sales growth and lower cotton costs, partially offset by a higher tax rate. Despite yesterday’s strong share price reaction (up 16 per cent), we believe valuation is inexpensive at 11 times 2024 EPS (vs 15 times average). There is potential for re-rating as macro conditions improve.

* Scotia’s George Doumet to US$39.50 from US$36.50 with a “sector outperform” rating.

“Q3 results came in modestly ahead of Street expectations. Updated 2023 guidance called for the low end of revenue and EPS projections (we and most of the Street were already there),” said Mr. Doumet. “Importantly, this confirms a strong exit to the year and positions the company to deliver low single digits (to mid single digits) top-line growth and the high end of (and potentially exceeding) its 18-per-cent to 20-per-cent operating margin guidance next year. This, coupled with GIL’s significantly discounted valuation and strong balance sheet optionality (which we believe would be increasingly used for capital return to shareholders), points to significant share upside, in our view (even after [Thursday’s] 15-per-cent-plus move). GIL remains a top discretionary idea.”

* Canaccord Genuity’s Luke Hannan to US$37 from US$35 with a “buy” rating.

“We believe, notwithstanding challenging near-term industry dynamics, GIL’s low-cost manufacturing footprint, healthy FCF generation profile, and an undemanding valuation creates a favourable long-term risk/reward profile for GIL shares,” said Mr. Hannan.

* TD Securities’ Brian Morrison to US$40 from US$38 with a “buy” rating.

* BMO’s Stephen MacLeod to US$37 from US$38 with an “outperform” rating.

* CIBC’s Mark Petrie to US$38 from US$37 with an “outperformer” rating.

* National Bank’s Vishal Shreedhar to $52 from $48 with an “outperform” rating.


In other analyst actions:

* Following the announcement of a sale of most of its European operations, CIBC’s John Zamparo raised Primo Water Corp. (PRMW-N, PRMW-T) to “outperformer” from “neutral” and raised his target to US$20 from US$17.50. Elsewhere, TD’s Derek Lessard raised his target by US$1 to US$26 with a “buy” rating. The average is US$20.13.

“The deal provides material financial and strategic benefits,” Mr. Zamparo said. “Financially, an 11 times transaction multiple was well above our expectation for any deal. On strategy, we believe this business offered more modest growth and few, if any, synergies with U.S. operations. Lower leverage should mean PRMW appeals to more investors, and this arrangement frees up cash for accretive tuck-ins, organic growth initiatives, and capital returns. Our organic growth forecasts for next year have moderated, and we acknowledge risk of a pending CEO transition, but the benefits of the strategic shift underway combine with reasonable valuation (just 7.5 times pro forma EBITDA vs. an average of 9.5 times since 2018) to create an enticing option for investors.”

* Citing a deteriorating outlook for nickel, TD Securities’ Greg Barnes downgraded Sherritt International Corp. (S-T) to “hold” from “speculative buy” with a 55-cent target, down from 85 cents and below the 80-cent average on the Street.

“Nickel sales volumes for Q3/23 were lower than finished production primarily due to lower demand for nickel from steel mills after summer shutdowns,” he said. “Higher mixed hydroxide product (MHP) and nickel matte intermediate availability also led to lower metal purchasing in Asia, with delivery of new China cathodes to the LME highlighting the lower nickel metal demand in the region. The LME nickel price has declined to the low-US$8.00/lb level, from over US $9.00/lb in early September. Nickel inventories on both the LME and Shanghai exchanges are climbing. Wood Mackenzie is forecasting that surpluses will build across all categories of nickel supply over the next several years, including nickel pig iron (NPI), nickel sulphate and Class 1 refined nickel.”

* Touting an “attractive growth profile,” CIBC’s Anita Soni initiated coverage of Allied Gold Corp. (AAUC-T) with an “outperformer” rating and $8 target. The average is $8.28.

“The company has three open-pit mines: Sadiola in Mali (80-per-cent ownership) and Agbaou (85 per cent) and Bonikro (89 per cent) in Côte d’Ivoire,” she said. “Combined, the three assets currently produce over 375koz per year. The company is seeking to grow production from 375koz in 2022 to over 620koz in 2026 through the development of its Kurmuk project (93-per-cent ownership) in Ethiopia and subsequently to 700koz-800koz in 2029 through a mine expansion at Sadiola. This growth represents a doubling of production by 2029, which would make Allied Gold one of the fastest-growing diversified gold producers in Africa. We expect the growth to be further supported by exploration efforts across the portfolio, which, paired with additional cost‑optimization efforts, should provide for an attractive free cash flow (FCF) profile post‑buildouts.”

* Canaccord Genuity’s Mike Mueller raised his target for ARC Resources Ltd. (ARX-T) to $28 from $24 with a “buy” rating. Other changes include: TD’s Aaron Bilkoski to $27 from $26 with a “buy” rating, Raymond James’ Jeremy McCrea to $27 from $26 with an “outperform” rating, Scotia’s Cameron Bean to $32 from $30 with a “sector outperform” rating, Stifel’s Michael Dunn to $24.25 from $23 with a “hold” rating and CIBC’s Jamie Kubik to $28 from $26 with an “outperformer” rating. The average is $25.73.

“ARX delivered solid Q3/23 results, with production and Adjusted Funds Flow (AFF) in line and Free Cash Flow (FCF) ahead of expectations on lower-than-expected capex,” said Mr. Bean. “The company reiterated its full year 2023 guidance and released better-than-expected 2024 guidance, with capex 10 per cent below the previous indication and the balance of metrics essentially in line. The Attachie project remains on track and on budget, with first volumes expected in late 2024 or early 2025. ARX’s preliminary expectations for 2025 line up with expectations and point to a materially undervalued large-cap energy story.”

* Scotia’s Tanya Jakusconek trimmed her Barrick Gold Corp. (GOLD-N, ABX-T) target to US$25 from US$26 with a “sector outperform” rating. The average is US$21.70.

* CIBC’s Stephanie Price lowered her BCE Inc. (BCE-T) target to $55 from $56, keeping a “neutral” rating. Other changes include: TD’s Vince Valentini to $55 from $56 with a “hold” rating, Canaccord Genuity’s Aravinda Galappatthige to $55 from $54 with a “buy” rating and BMO’s Tim Casey to $58 from $60 with an “outperform” rating. The average is $58.39.

* Desjardins Securities’ Benoit Poirier increased his Bombardier Inc. (BBD.B-T) target to $103 from $99 with a “buy” rating. Other changes include: Scotia’s Konark Gupta to $85 from $84 with a “sector outperform” rating and TD’s Tim James to $100 from $92 with a “buy” rating. The average is $77.07.

“Despite rising concerns about bizjet cycle, BBD managed to maintain the backlog, book:bill ratio and guidance, while turning around the FCF and beating earnings expectations for the 11th consecutive quarter,” said Mr. Gupta. “The pure-play bizjet OEM is not immune to industry normalization or persistent supply chain challenges, but it has been able to deliver better than peers and expectations due to its impressive management of backlog, production and supply chain. The company noted strong order pipeline and clear line of sight on delivery ramp-up heading into Q4, which points to a solid end to 2023 with a remarkable improvement in the leverage ratio, excess liquidity for more deleveraging and prospects for further growth in 2024. We maintain our annual forecasts while slightly raising our target on better-than-expected net debt trends. We also re-iterate our Sector Outperform rating given the stock is attractively trading at only 5.8 times EV/EBITDA on 2024E, significantly below its key comps at 11 times (albeit some discount is warranted).”

* RBC’s Greg Pardy raised his Canadian Natural Resources Ltd. (CNQ-T) target to $96 from $95 with an “outperform” rating, while Stifel’s Michael Dunn increased his target to $106 from $99 with a “buy” rating. The average is $98.43.

“Our bullish stance toward CNQ continues to reflect its strong leadership team, shareholder alignment, long life-low decline portfolio, abundant free cash flow generation, robust balance sheet and best-in-class operating performance,” Mr. Pardy said. “We are reaffirming an Outperform recommendation on CNQ and boosting our one-year price target by $1 to $96 per share. CNQ is our favourite senior producer and is on both our Global Energy Best Ideas and Top 30 Global Ideas lists.”

* Mr. Pardy also increased his Cenovus Energy Inc. (CVE-) target to $32 from $30 with an “outperform” rating. Other changes include: National Bank’s Travis Wood to $36 from $37 with an “outperform” rating and TD’s Menno Hulshof to $35 from $34 with a “buy” rating. The average is $32.91.

“Cenovus’s third-quarter results reinforced our confidence in the company’s integrated model and free cash flow generation,” said Mr. Pardy. “We recognize that there may be some market fatigue in terms of the company achieving its $4 billion net debt floor (which we now anticipate could occur in the first half of 2024), but we believe that patience will be rewarded. Meanwhile, Cenovus is distributing one-half of its free cash flow to shareholders.”

* CIBC’s Stephanie Price reduced her targets for Cogeco Communications Inc. (CCA-T, “neutral”) to $65 from $69 and Cogeco Inc. (CGO-T, “neutral”) to $53 from $58. The averages are $72.41 and $79, respectively.

Elsewhere, others making Cogeco changes include: TD’s Vince Valentini to $90 from $99 with a “buy” rating.

Cogeco Communications tweaks include: Canaccord Genuity’s Aravinda Galappatthige to $63 from $65 with a “hold” rating, TD’s Vince Valentini to $87 from $96 with a “buy” rating, BMO’s Tim Casey to $64 from $75 with a “market perform” rating, Scotia’s Maher Yaghi to $72.75 from $75.50 with a “sector perform” rating, National Bank’s Adam Shine to $63 from $67 with a “sector perform” rating and Desjardins Securities’ Jerome Dubreuil to $73 from $77 with a “buy” rating.

“CCA appears to be strongly considering the launch of a wireless service in Canada, the U.S. or both,” said Mr. Dubreuil. “The company is accelerating its investments in the venture and is now committing significant capital in preparation for a potential launch. We are currently in the camp that believes IRRs on wireless resale are low on a risk-adjusted basis. We maintain our Buy recommendation given the value of the cable assets but highlight the medium-term capital allocation risk.”

* Scotia’s Jason Bouvier raised his Enerplus Corp. (ERF-T) target to $27 from $25 with a “sector perform” rating, while Stifel’s Cody Kwong bumped his target to $32.25 from $31 with a “buy” rating. . The average is $24.84.

* CIBC’s Bryce Adams lowered his target for Ero Copper Corp. (ERO-T) to $24 from $26 with a “neutral” rating, while BMO’s Jackie Przybylowski cut her target to $22 from $25 with a “market perform” rating. The average is $27.23.

* JP Morgan’s raised his Gibson Energy Inc. (GEI-T) target to $26 from $25, exceeding the $24.96 average, with an “overweight” rating.

* RBC’s Sabahat Khan cut his Jamieson Wellness Inc. (JWEL-T) target to $35 from $38 with an “outperform” rating. Other changes include: TD’s Derek Lessard to $42 from $50 with an “action list buy” rating, BMO’s Stephen MacLeod to $40 from $42 with an “outperform” rating and Scotia’s George Doumet to $32 from $35 with a “sector perform” rating. The average is $40.30.

“Q3 results were modestly ahead of expectations & JWEL nudged up its 2023 revenue guidance and kept its adj. EBITDA and adj. EPS largely unchanged,” said Mr. Doumet. “Consumption trends remain robust, restocking seems to be underway for Q4 and JWEL is confident in its ability to grow Jamie Canada in the low single digits next year. Given that the shares are down 23 per cent since JWEL reported Q2 results, we believe we could see relief. That being said, we would like to see improved visibility on volume growth in Canada 2024, operating leverage down the P&L and higher FCF conversion before getting more constructive on the name.”

* Scotia’s Kevin Krishnaratne cut his Kinaxis Inc. (KXS-T) target to $200, below the $217.32 average, from $225 with a “sector perform” rating.

* CIBC’s Todd Coupland raised his Lightspeed Commerce Inc. (LSPD-T) target to $24 from $23 with a “neutral” rating. Other changes include: Barclays’ Raimo Lenschow to US$19 from US$17 with an “overweight” rating and Scotia’s Kevin Krishnaratne to US$21 from US$25 with a “sector outperform” rating. The average is US$20.27.

“LSPD remains one of our favourite names in our coverage given its valuation (3.0 times CY24 GP vs. peers at 4.7 times) and the opportunity for GP upside on its Unified Payments push,” said Mr. Krishnaratne. “Q2 results were impressive, with a Revenue beat helped by better payments attach, lower-than-anticipated location churn, and positive software trends, while Adj. EBITDA was slightly positive – a milestone achieved a quarter earlier than forecast. Although the near-term outlook for GTV trends may be softer given LSPD’s exposure to discretionary categories and a more cost-conscious consumer, these dynamics appear to be well captured in the company’s Q2 guide. Meanwhile, we like the levers in the model that are within management’s control such as product (One Lightspeed) and Unified Payments, both of which could surprise to the upside. We also think the set up is strong for a much better H2 ahead of a return to a focus on software and location growth acceleration in FY2.”

* In a third-quarter earnings preview for Canadian insurance companies, Scotia’s Meny Grauman lowered his Manulife Financial Corp. (MFC-T) target to $30 from $32 with a “sector outperform” rating. The average is $28.58.

“As we head into another lifeco earnings season, we reiterate our preference for lifecos over banks,” he said. “The TSX Life and Health Index has already outperformed the Bank Index by about 1,600 basis points year-to-date, but we expect that gap to continue to widen over the coming months due to both macro factors and capital dynamics. On the macro side, the ‘higher for longer’ rate environment is increasing the downside risk for Canadian banks, especially given the wave of expected fixed-rate mortgage renewals coming in 2025 and 2026. Conversely, we know that lifecos are one of the few sectors that benefit from higher rates. Meanwhile, on the capital side, while Canadian banks continue to deal with higher minimum capital ratios and the ongoing implementation of the Basel III updates, the capital picture for lifecos is a lot more stable and hence we continue to see strong growth in excess capital levels, which is driving buybacks and providing plenty of opportunity for M&A, especially at IAG where we see inorganic capital deployment as a key catalyst for the shares.”

* RBC’s Irene Nattel lowered her Maple Leaf Foods Inc. (MFI-T) target to $32 from $36 with an “outperform” rating. Other changes include: Canaccord Genuity’s Luke Hannan to $35 from $39 with a “buy” rating, Scotia’s George Doumet to $36 from $37 with a “sector outperform” rating and CIBC’s Mark Petrie to $36 from $37 with an “outperformer” rating. The average is $36.

“Results were largely in line with expectations, however there were two blemishes in the quarter,” said Mr. Doumet. “Firstly, volumes came in significantly worse than expected due mainly to the volumetric response to price increases, but also some trade-down in certain categories (notably RWA and bacon). Secondly, the pork complex weakened at the start of the Q4 quarter (but remains in a healthy bandwidth). All in all, while the aforementioned creates some noise, it doesn’t change our investment thesis (and would be buying the share price weakness). We see significant upside in MFI as the end of capex cycle paves the way for accelerated deleveraging (over the next 12-18 months) and as shares are currently trading at a discounted valuation (7.5 times EBITDA on our 2024 estimates vs. a historical average closer to 9.5 times).”

* RBC’s Andrew Wong cut his Nutrien Ltd. (NTR-N, NTR-T) target to US$80 from US$85 with an “outperform” rating. Other changes include: CIBC’s Jacob Bout to US$87 from US$88 with an “outperformer” rating and TD’s Michael Tupholme to US$75 from US$81 with a “buy” rating. The average is US$74.82.

“We think Nutrien delivered a solid Q3 result that hit all the right notes — potash improvement, Retail margin recovery, and further capex discipline,” said Mr. Wong. “We view shares as undervalued, implying a 1-2 times EV/EBITDA multiple discount to peers on the fertilizer business. We see more stable company and fertilizer market performance as the path to restoring investor confidence and a recovery in valuation.”

* Stifel’s Cody Kwong cut his Paramount Resources Ltd. (POU-T) target to $40 from $41 with a “buy” rating. Other changes include: ATB Capital Markets’ Patrick O’Rourke to $38 from $39 with an “outperform” rating , Scotia’s Cameron Bean to $40 from $41 with a “sector perform” rating and National Bank’s Dan Payne to $42.50 from $45 with an “outperform” rating. The average is $39.95.

* CIBC’s Kevin Chiang raised his Parkland Corp. (PKI-T) target to $50 from $48.50 with an “outperformer” rating. Other changes include: Canaccord Genuity’s Luke Hannan to $51 from $50 with a “buy” rating, Raymond James’ Steve Hansen to $55 from $50 with an “outperform” rating, Scotia’s Ben Isaacson to $50 from $45 with a “sector outperform” rating, TD Securities’ Michael Van Aelst to $52 from $50 with a “buy” rating, National Bank’s Vishal Shreedhar to $47 from $45 with an “outperform” rating and ATB Capital Markets’ Nate Heywood to $50 from $48 with an “outperform” rating. The average is $48.36.

“We exit Q3 with a more positive view of PKI, and recommend investors buy the stock ahead of its Nov. 14 Investor Day,” said Mr. Isaacson. “PKI remains focused on integration/synergy capture, improving leverage, as well as portfolio optimization, and has made meaningful gains on these (e.g., leverage at sub-3 times for the first time since ‘19). This includes the acceleration of its $2B EBITDA ambition to ‘24, which should result in $5/sh of FCF. Of course, $5 is not the goal, it’s now the base from which PKI will grow. Investors are keen to hear how PKI will fund this next stage of growth, without putting the B/S at risk, while at the same time growing the divvy. As a base, investors can expect PKI to grow EBITDA organically by 3 per cent to 5 per cent annually, with disciplined M&A on top of that. We have raised our PT to $50 from $45, largely to acknowledge (via higher multiples) solid execution by management, a better B/S, a refreshed board, and energy transition progress (although perhaps less urgency now, with GM/Ford decelerating EV development and Exxon/Chevron doubling down on oil ambitions). PKI is perhaps one of the most defensive names in our universe, and one of the few stocks that continues to work amidst the macro overhang, in our view.”

* CIBC’s Robert Catellier moved his target for Pembina Pipeline Corp. (PPL-T) to $52 from $51, above the $50.23 average, with an “outperformer” rating, while Scotia’s Robert Hope raised his target to $49 from $48 with a “sector outperform” rating.

* Canccord Genuity’s Mark Rothschild bumped his target for Primaris REIT (PMZ.UN-T) to $17.25 from $16 with a “buy” rating. The average is $16.64.

* TD Securities’ Derek Lessard lowered his Savaria Corp. (SIS-T) target to $18 from $21, keeping a “buy” rating. Other changes include: Raymond James’ Michael Glen to $18 from $19 with an “outperform” rating and Scotia’s Michael Doumet to $17 from $19 with a “sector outperform” rating. The average is $19.86.

* RBC’s Keith Mackey raised his Step Energy Services Ltd. (STEP-T) target to $5.50 from $5 with a “sector perform” rating. The average is $6.57.

* CIBC’s John Zamparo reduced his Spin Master Corp. (TOY-T) target to $47 from $50 with an “outperformer” rating. Other changes include: Canaccord Genuity’s Luke Hannan to $52 from $55 with a “buy” rating and TD Securities’ Brian Morrison to $50 from $51 with a “buy” rating. The average is $50.57.

“Given Spin Master’s ability to create coveted toy brands and verticals, the complementary acquisition of Melissa & Doug (pending close of the deal in Q1/24), and the current valuation, we believe the shares are compelling at current levels,” said Mr. Hannan.

* RBC’s Michael Siperco cut his SSR Mining Inc. (SSRM-Q, SSRM-T) target to US$15 from US$22 with an “outperform” rating, while National Bank’s Mike Parkin lowered his target to $20 (Canadian) from $23 with a “sector perform” rating. The average is $25.07.

“The near term production/cost outlook has been downgraded during a new 3-year investment period at Copler, Marigold and Hod Maden,” said Mr. Siperco. “While updated plans could pay off post-2026, until then we see the weaker outlook and increased execution/capital risk as capping relative upside, leading to our lower target and more cautious view. We still see significant long-term value in the portfolio, however we think more clarity is needed (potentially with 1Q24 technical reports/updated guidance) before the market can get more comfort with the investment plan.”

Editor’s note: An earlier version of this article did not reflect a change in coverage at BMO for Jamieson Wellness to reflect the current analyst. It has been updated.

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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 26/02/24 4:00pm EST.

SymbolName% changeLast
Allied Gold Corporation
Arc Resources Ltd
Barrick Gold Corp
Baytex Energy Corp
Bombardier Inc Cl B Sv
Canadian Natural Resources Ltd.
Cenovus Energy Inc
Cogeco Communications Inc
Cogeco Inc Sv
Colliers International Group Inc
Ero Copper Corp
Enerplus Corp
Gibson Energy Inc
Gildan Activewear Inc
Jamieson Wellness Inc
Kinaxis Inc
Lightspeed Commerce Inc.
Manulife Fin
Maple Leaf Foods
Nutrien Ltd
Paramount Resources Ltd
Parkland Fuel Corp
Pembina Pipeline Corp
Primo Water Corp
Primaris REIT
Savaria Corp
Sherritt Intl Rv
Shopify Inc
Step Energy Services Ltd
Spin Master Corp
Ssr Mining Inc

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