A roundup of some of the North American equities making moves in both directions today
On the rise
WSP Global Inc. (WSP-T) rose 1.7 per cent on Friday after announcing the acquisition of Lievense Holding B.V., a 375-employee Dutch multidisciplinary consulting firm, before the bell.
“The acquisition, which was financed using WSP’s available cash and credit facilities, is aligned with WSP’s 2019-2021 Global Strategic Plan,” the company said in a release. “Lievense, which will enable WSP to establish a footprint in the Dutch market, ranks amongst the top-15 engineering consultancy firms within the Netherlands. It is active in the Buildings, Environment, Energy, Infrastructure and Water sectors.”
On Thursday, an equity analyst at Raymond James increased his target for WSP shares, contending the market is not properly taking to account the Montreal-based professional services firm’s “expanding and increasingly diversified platform, impressive acquisition track record and strong technical know-how in transportation.”
Tilray Inc. (TLRY-Q) was up 1.2 per cent after announcing it plans to have CBD-infused drinks on the Canadian market as early as December through its joint venture with the world’s largest brewer Anheuser-Busch InBev.
According to the company, Tourmaline will sell to Topaz: a royalty interest on Tourmaline lands, a non-operated interest in two of Tourmaline’s existing 19 natural gas processing plants, and a contracted interest in a portion of Tourmaline’s current third-party revenue for total cash and share consideration of $775-million.
In a research note, Industrial Alliance Securities analyst Michael Charlton said: “We view this as a positive and creative transaction that looks to unlock value in some of Tourmalines assets while providing an alternative form of financing in the near-term with potential for a longer term monetization of value trapped in Tourmalines substantial and undervalued asset base. In the near-term Tourmaline will be able to use proceeds to further pay down debt, buy-back shares in its NCIB or complete potential acquisitions or consolidations in its core operating areas. Based on internal estimates, 2020 cash flow is minimally impacted (less than 1 per cent) while boosting its DACF/share [debt-adjusted cash flow per share] by 5 per cent and provides optionality with a lower cost of capital vehicle while further strengthening the balance sheet and further unlocking value for shareholders. Post transaction Tourmaline looks to retain an average WI of 95 per cent in its infrastructure and is able to potentially leverage its vast infrastructure base to generate increased returns for shareholders..”
Boeing Co. (BA-N) was up 1.1 per cent despite saying Thursday that airlines had inspected 810 of the company’s 737 NG jets around the world and found 38 structural cracks requiring repair and replacement of the affected parts.
The planes will be grounded until the repairs are made, Boeing and airline officials said. Nearly 5 per cent of inspections have found cracks in a “pickle fork” - a part that attaches the plane’s fuselage, or body, to the wing structure and manages forces.
The 737 NG is the third-generation 737 and version before the now-grounded 737 MAX, which is not impacted by the cracking issue.
Walmart Inc. (WMT-N) rose 0.5 per cent after it said late Thursday its chief executive for U.S. operations, Greg Foran, will leave the company early next year and be replaced by the head of its Sam’s Club warehouse chain unit, John Furner.
Mr. Foran’s departure is likely to be considered a blow for Walmart given the New Zealand native is credited with turning around Walmart’s U.S. business by focusing on improving existing stores. Walmart reported 20 quarters of comparable sales growth under his leadership.
Mr. Foran, who has held the job since 2014, will stay with Walmart until Jan. 31 and then take on the role of chief executive at Air New Zealand Ltd, an appointment that was also announced separately by the airline.
On the decline
Before market open, Jefferies analysts Ryan Tomkins and Owen Bennett made significant changes to target prices for Canadian marijuana producers on Friday, emphasizing price performance over the next 12 months will likely see a “strong divergence between those who can execute/move to profit and the rest.”
At the same time, the analysts raised their rating for Hexo shares, seeing greater clarity following Thursday’s announcement and in reaction to the steep drop in price.
Restaurant franchisor and operator MTY Food Group Inc. (MTY-T) fell 8.7 per cent after reporting before the bell that third-quarter revenue increased 44 per cent from $113-million to $163.1-million, mainly due to the contribution from the acquisition of the Papa Murphy’s pizza chain.
Net income attributable to shareholders increased to $22.9-million, or 91 cents per share, compared to $22.1-million, or 88 cents per share for the same period last year. Analysts were expecting revenue of $168.1-million.
“Third quarter results were record-breaking for system sales and EBITDA, driven by the first full quarter of contribution from Papa Murphy’s, despite it being a seasonally softer quarter for the division. As of last week, our executive team is complete and executing initiatives to improve the performance of individual stores and of the network as a whole. We are very pleased with this acquisition which adds a brand with a differentiated position in the pizza business and allows us to alleviate a lot of the seasonality of our business,” said CEO Eric Lefebvre.
With files from staff and wires