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Inside the Market Market movers: Stocks that saw action on Wednesday - and why

A roundup of some of the North American equities making moves in both directions today

On the rise

Royal Bank of Canada (RY-T) was up 0.6 per cent after reporting a 5-per-cent rise in quarterly profit and raised its dividend before the bell as strong results from personal and commercial banking as well as wealth management offset a weak quarter in capital markets.

For the three months that ended July 31, RBC’s profit was $3.26-billion, or $2.22 per share, compared with $3.11-billion, or $2.10, a year ago.

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See also: Canada’s big banks are about to release earnings. Here’s what to expect

A day after passing venerable BCE Inc. in stock market value, Shopify Inc. (SHOP-T) continued to rise, sitting up 4 per cent.

The Canadian software company’s shares are up by 164 per cent so far this year, trouncing all the U.S. internet behemoths and capturing the attention of the market’s biggest growth and tech investors.

Target Corp. (TGT-N) jumped 20.9 per cent to a record high after exceeding Wall Street estimates for quarterly profit and raising its annual forecast on Wednesday, as higher investments to cater to changing shopping habits lifted online sales and attracted more shoppers.

Robust digital sales drove more than half of the 3.4-per-cent growth in same-store sales. Store traffic also grew 2.4 per cent in the quarter.

Analysts on average were expecting same-store sales to grow 3 per cent.

The company also raised its full-year adjusted profit forecast between US$5.90 and US$6.20 per share, compared with the prior range of US$5.75 to US$6.05.

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Charlie O’Shea of Moody’s said: “Q2 could not have gone better for Target. Every measurable demonstrates continued acceleration and validates the company’s strategic shift articulated in February 2017, proving that short-term pain can generate long term gains if the strategy is well executed.

"Going forward, we expect Target to continue to be one of the top performers in US retail, and we note that the runway will likely be longer and wider with food now being repositioned, which will drive traffic and provide more opportunities to sell higher margin private and exclusive product.”

After exceeding same-store sales expectations for the second quarter, Lowe’s Cos Inc. (LOW-N) sat up just over 10 per cent, as the home improvement chain stocked more equipment geared towards pulling high-spending customers.

The company’s same-store sale rose 2.3 per cent in the quarter ended Aug. 2, above expectations of a 1.8-per-cent increase.

Net sales rose marginally to US$20.99-billion from US$20.89-billion, falling in-line with analysts’ estimates.

See also: Home Depot cuts 2019 sales forecast on falling lumber prices, tariff impact

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Descartes Systems Group Inc. (DSG-T) was 2.4 per cent higher after announcing the US$11.2-million acquisition of privately-owned, Ohio-based BestTransport.com Inc..

Laurentian Bank Securities analyst Nick Agostino said: " Once integrated within DSG’s Global Logistics Network the opportunity exists to cross-sell BestTransport clients on some core DSG modules including its high-growth MacroPoint Visibility and Capacity Matching solutions. The uniqueness of BestTransport’s solution set combined with the attractive up-sell opportunities, should lead to further margins expansion for DSG’s overall operations over time."

PolyMet Mining Corp. (POM-T) sat flat after it announced that the Minnesota State Supreme Court declined to hear a petition for review by environmental groups to a lower court decision regarding the environmental review for the NorthMet copper-nickel-precious metals project.

The company stated that two environmental groups had petitioned the court for review of a unanimous May 28 Court of Appeals decision that upheld the scope of the environmental review prepared for the NorthMet Project by the Minnesota Department of Natural Resources. The company also said the Court rejected the groups’ request for the agency to prepare a supplemental environmental impact statement.

On the decline

Shares of Pembina Pipeline Corp. (PPL-T) fell 0.4 per cent after announcing on Wednesday it would buy smaller rival Kinder Morgan Canada Ltd. (KML-T) in a transaction that values it at about $2.3-billion.

The all-share deal values Kinder Morgan Canada at about $15.02 per share, representing a premium of 36.8 per cent to the stock’s Tuesday close.

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Raymond James analyst Christopher Cox said: “We believe the acquisition further strengthens the quality of the company’s integrated value chain, improves the quality of the company’s cash flows and adds a new compelling business line with the Edmonton storage business. We believe the benefits of this were reflected in the modest premium paid for these assets relative to PPL’s current valuation, although we suspect Management will work to bring down the effective acquisition cost over-time through capital-efficient expansion opportunities and integration with the company’s existing value chain.”

Kinder Morgan Canada shares were 31.6 per cent.

See also: Pipeline stocks are rallying in Canada, and this one is my favourite

Shares of Tesla Inc. (TSLA-Q) were down 2.2 per cent a day after being sued by Walmart Inc. (WMT-N).

The retail giant is accusing Tesla of “widespread negligence” that led to repeated fires of its solar systems and asking a court to force Tesla to remove solar panels from more than 240 of its U.S. stores.

Walmart shares were xxx.

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See also: Tesla tries to spark its solar-panel business in U.S. by offering rooftop rental plans

With files from Tim Shufelt, staff and wires

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