Monday’s analyst upgrades and downgrades

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

The outlook for commodities has “significantly improved” in recent months, according to Scotia Capital analyst Orest Wowkodaw, who thinks the “risk-reward proposition for the equities remains attractive despite the impressive performance post the COVID-19 pandemic collapse in early 2020.”

“Although most of the world continues to battle the COVID-19 pandemic, the recent development of several vaccines and clarity on the governing U.S. administration has significantly improved the outlook (and sentiment) for commodities,” he said. “There is little doubt that the remarkable Chinese economic recovery beginning in Q2/20 rescued most commodity markets from complete disaster last year given the pandemic-induced demand implosion outside of China. Looking ahead, massive coordinated global stimulus will be required for most nations to successfully navigate through and eventually recover from the current pandemic. In our view, this stimulus should serve as a very positive tailwind for commodities particularly given the heightened focus on a ‘green recovery.’ Our base case continues to assume that global commodities demand strongly recovers in the 2021-2022 period supporting an improved pricing environment for most metals. In the medium to long term, we believe that severe under-investment in new capacity in the context of a declining existing production base combined with growing demand from global decarbonization efforts has set the stage for the next commodities super cycle ahead.”

In a research report released Monday, Mr. Wowkowdaw said he “strongly” prefers copper exposure among base metals, expecting the market to “post a meaningful 2021 deficit driven by demand recovery before transitioning to a large medium-term structural deficit due to supply erosion.”

“Moreover, we anticipate Cu to be among the biggest beneficiaries of growing global decarbonization efforts,” he said. “We forecast near-term over-supply in both Zn and Ni markets. While we still see downside pricing risks for Fe from current elevated levels as supply recovers, the market appears to be tighter for longer than we previously envisioned. We anticipate HCC prices to gradually recover as ex-China steel markets improve and current trade tensions inevitably ease. U3O8 fundamentals are slowly improving on supply constraints and the increasing role for nuclear in green energy.”

“We have increased our average 2021-2024 prices for Zn, Ni, Cu, and 62 per cent Fe by 9 per cent, 14 per cent, 14 per cent, and 16 per cent pa; U3O8 is unchanged; HCC declined by 7 per cent pa. In 2021, we anticipate year-over-year improvements in 62 per cent Fe, U3O8, Zn, Ni, and Cu prices of 6 per cent, 16 per cent, 17 per cent, 20 per cent, and 21 per cent, with HCC declining by a minor 2 per cent.”

With those changes to his commodity price deck, Mr. Wowkodaw raised his 2021 EBITDA estimates by an average of 26 per cent and his 2022 projections by 28 per cent. His 8% NAVPS estimates by an average of 32 per cent.

“With different fundamentals, each commodity appears to be at a somewhat different stage of its own respective cycle stage (i.e., peak and trough),” the analyst said. “Our analysis suggests that copper fundamentals are tightening while nickel and zinc appear to have moved into multi-year surplus positions. Of the three base metals, the recovery in copper appears the most advanced by far. Iron ore currently remains the closest to its peak-cycle levels given the perfect storm of material ongoing supply side constraints combined with surprising strength in Chinese steel markets. On the other hand, met coal remains near its bottom of its cycle due to relatively weak ex-China steel markets and the over supply dislocation caused by the China-Australia trade dispute.”

With that view, Mr. Wowkodaw raised his ratings for a pair of stocks and made several target price revisions.

He upgraded Copper Mountain Mining Corp. (CMMC-T) to “sector outperform” from “sector perform,” citing “an attractive valuation, significant leverage to copper, easing balance sheet risks, and a solid near-to-medium term production growth profile.”

His target for its shares rose to $3 from $1.75. The average on the Street is $2.31.

Mr. Wowkodaw raised Taseko Mines Ltd. (TKO-T) to “sector perform” from “sector underperform,” pointing to “easing balance sheet risks, high leverage to copper, and a more reasonable valuation.”

His target for Taseko shares rose to $2 from $1.20, exceeding the $1.66 average.

Mr. Wowkodaw’s target price changes included:

• Altius Minerals Corp. (ALS-T, “sector perform”) to $16 from $12.50. The average on the Street is $15.63.
• Cameco Corp. (CCO-T, “sector outperform”) to $22 from $19. Average: $17.95.
• Capstone Mining Corp. (CS-T, “sector outperform”) to $4 from $3. Average: $2.65.
• Champion Iron Ltd. (CIA-T, “sector outperform”) to $6.50 from $5. Average: $5.54.
• Ero Copper Corp. (ERO-T, “sector perform”) to $24 from $21.50. Average: $23.75.
• First Quantum Minerals Ltd. (FM-T, “sector outperform”) to $30 from $19.50. Average: $22.87.
• Hudbay Minerals Inc. (HBM-T, “sector outperform”) to $12 from $8.25. Average: $9.02.
• Labrador Iron Ore Royalty Corp. (LIF-T, “sector outperform”) to $40 from $36. Average: $35.14.
• Lundin Mining Corp. (LUN-T, “sector outperform”) to $14 from $9.50. Average: $11.25.
• Nevada Copper Corp. (NCU-T, “sector perform”) to 25 cents from 20 cents. Average: 43 cents.
• Sherritt International Corp. (S-T, “sector underperform” ) to 40 cents from 20 cents. Average: 44 cents.
• Teck Resources Ltd. (TECK.B-T, “sector outperform”) to $30 from $25. Average: $24.88.
• Titan Mining Corp. (TI-T, “sector perform”) to $1 from 60 cents. Average: 75 cents.
• Trevali Mining Corp. (TV-T, “sector underperform”) to 25 cents from 10 cents. Average: 21 cents.
• Turquoise Hill Resources Ltd. (TRQ-T, “sector outperform”) to $27 from $22.50. Average: $18.39.

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North American rail companies have several tailwinds working in their favour that should drive “robust” revenue and earnings growth as 2021 begins, according to Citi’s Christian Wetherbee.

In a research note previewing fourth-quarter earnings season for the sector, the analyst said he expects “a lot, but so does everyone else.”

“Arguably, the fundamental set up (high single-digit volume, improving pricing and lots of operating leverage from PSR [precision scheduled railroading]) is as good as we’ve seen recently and comparisons to 2014 and 2018 – but with universal PSR – seem reasonable, if not cautious,” he said. “So we expect a big year from the group…but so does everyone else. We’re not saying the group won’t work, and in fact we still are positively positioned with 4 of 6 Buy ratings, but given expectations it seems less likely that the rails will beat 2020′s 800 basis points of relative outperformance. So while we want exposure, we think remaining focused on the new PSR stories makes sense, as gains in 2021 could moderate.”

Despite that positive view, Mr. Wetherbee trimmed his fourth-quarter earnings per share projections by 3 per cent, now sitting below the consensus projections on the Street by just below 2 per cent. For 2021, he increased his estimates by 1 per cent and now projects 21-per-cent year-over-year earnings growth, which is 2 per cent above the consensus.

“We are taking our price targets higher for the rails, as we move target multiples up to 22-24 times for the group on our raised 2022 estimates,” he said. “It’s clear that the group has re-rated higher, but the rails still look reasonably attractive vs. the broader Industrials and the market. Historically the rails have traded at a 0.8-times premium to the XLI. Yet, the rails’ average P/E currently sits at relative parity. Similarly, the group has typically traded at a 2-4-times premium to the S&P 500 during growth years (2014 & 2018), but sits at only a modest 1-times premium today. Ultimately, we still see double digit upside for the group, but it seems less likely to see another year of sharp outperformance unless volume growth surprises to the upside more than we anticipate.”

His target price changes were:

* Canadian National Railway Co. (CNI-N/CNR-T, “neutral”) to US$127 from US$110. The average on the Street is US$114.35.

“We are slightly decreasing our 4Q20 EPS estimate by 0.3 per cent to C$1.42, which is largely driven by a 30 basis points increase in our OR estimate to 61.0 per cent,” he said. “That said, we are maintaining our 2021 EPS estimate and increasing our 2022 EPS estimate by 1 per cent to C$6.70, primarily driven by a higher revenue estimate. We are also introducing a 2023 EPS estimate of C$7.20 that equates to 7 per cent year-over-year growth.”

* Canadian Pacific Railway Ltd. (CP-N/CP-T, “buy”) to US$430 from US$355. Average: US$360.06.

“We are decreasing our 4Q20 EPS estimate by 5 per cent to C$4.85, which is largely driven by a 460 basis points reduction in our revenue growth estimate to capture headwinds to yield growth, namely from fuel and FX (we are decreasing our yield growth estimate by 600 bps),” he said. “That said, we are increasing our 2021 and 2022 EPS estimates by 1 per cent each to C$20.25 and C$22.10, respectively, driven largely by higher revenue growth estimates and lower OR estimates on better expected operating leverage, while are also introducing a 2023 EPS estimate of C$23.60 that equates to 7-per-cent year-over-year growth.”

* CSX Corp. (CSX-Q, “neutral”) to US$105 from US$87. Average: US$95.08.

* Kansas City Southern (KSU-N, “buy”) to US$250 from US$220. Average: US$204.05.

* Norfolk Southern Corp. (NSC-N, “buy”) to US$290 from US$250. Average: US$244.74.

* Union Pacific Corp. (UNP-N, “buy”) to US$250 from US$215. Average: US$221.

“Our preference order continues to rank Kansas City Southern at the top followed by Norfolk Southern,” said Mr. Wetherbee. “We put the ‘new PSR’ stories at the top as we believe this group has the potential to post among the strongest earnings growth in 2021. We also think expectations for KCS and NS are most manageable, yielding solid upside to consensus estimates (we’re 6 per cent and 3 per cent above the street in ’21, respectively). Along these lines, we think the market still remains skeptical of real margin improvement, as consensus models the second worst incrementals in 2021 for KCS in spite of solid PSR momentum in 2020 and management’s comments, which suggest a mid-50-per-cent target is reasonable over time. For NS, consensus seems cautious in 2021 with a 61-per-cent-plus estimate.”

Elsewhere, Desjardins Securities analyst Benoit Poirier expects both CN and CP to “adopt a cautiously optimistic view” for 2021 and guide toward double-digit earnings per share growth.

“We believe consensus is optimistic at up 19 per cent for CN and up 14 per cent for CP,” he said. “Bottom line, we believe both railroads are richly valued given the current growth expectations in the market and prefer to wait for a better entry point.”

Maintaining “hold” ratings for both, Mr. Poirier trimmed his target for CN to $150 from $154 with his CP target rising to $460 from $456.

Credit Suisse’s Allison Landry raised her CN target to US$411 from US$367 with an “outperform” rating. She increased her CN target to US$124 from US$120 also with an “outperform” recommendation.

“Following a prolonged downturn in rail volumes (7 consecutive quarters for the US Class Is), the freight recovery is well underway, with carloads having turned positive in Q4,” said Ms. Landry. “While the recent spike in COVID cases creates uncertainty and risks of further shutdowns, we are broadly positive on freight market fundamentals heading into 2021.”

“The industrial economy is improving and consumer related demand remains robust – with inventory restocking appearing to have plenty of room for runway in the near term. And to the extent that inventory management strategies shift to ‘just in case’ vs. ‘just in time,’ this could lead to stronger freight demand for longer. Pricing gains – which remained solid throughout the freight recession – are likely to accelerate through ’21, in part boosted by what is expected to be LDD TL contract rate hikes from tight TL capacity.”

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Expecting “substantial” company-specific and hydrogen industry catalysts to come in 2021, Raymond James analyst Michael Glen upgraded Ballard Power Systems Inc. (BLDP-Q, BLDP-T) to “strong buy” from “outperform” on Monday.

“In previous publications we have described 2021 as a ‘watershed moment’ in the history of the hydrogen economy,” he said. “One short week into 2021, and we are already seeing this play out in a substantial way. As many investors will have seen, last week U.S. based hydrogen peer Plug Power announced a $1.5 billion direct equity investment from SK Group, a large South Korean industrial conglomerate. Perhaps to no surprise, this announcement triggered large moves across most hydrogen stocks, Ballard included.

“That said, behind the scenes, developments with respect to Ballard continue to move forward in a meaningful way. In particular, over the weekend, in a document dated Jan 11, 2021, Weichai Power (WP) released further details surrounding its proposed $2 billion equity raise (English and Chinese). We wrote about this proposed equity issuance on Jan 5, and we believe there are important implications for Ballard. In working through the new documents, it is clear to us that that fuel cells represent a core component of WP’s growth strategy over coming decades (yes decades), with WP explicitly highlighting their position as the ‘largest shareholder’ of Ballard, a global leader in hydrogen fuel cells, on two separate occasions.”

Mr. Glen hiked his target for Ballard shares to US$40 from US$28. The average is currently US$26.35.

“When we look at Ballard’s relationships, strategic alignments, and investment focus, we see a company that is exceptionally well positioned as substantial investment dollars are allocated towards hydrogen,” he said. “The company already has a very high market share in the deployment of fuel cells in the European bus market (more than 80 per cent), and holds an indicated 45 per cent among actual in-use FCEV’s on the road today in China.”

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National Bank Financial analyst Gabriel Dechaine increased his target prices for Canadian banks stocks on Monday.

His changes were:

• Bank of Montreal (BMO-T, “sector perform”) to $102 from $93. The average on the Street is $103.35.
• Bank of Nova Scotia (BNS-T, “sector perform”) to $70 from $68. Average: $70.68.
• Canadian Imperial Bank of Commerce (CM-T, “outperform”) to $124 from $122. Average: $122.42.
• Royal Bank of Canada (RY-T, “outperform”) to $117 from $113. Average: $112.53.
• Toronto-Dominion Bank (TD-T, “sector perform”) to $75 from $73. Average: $76.10.
• Canadian Western Bank (CWB-T, “sector perform”) to $32 from $30. Average: $32.75.
• Laurentian Bank of Canada (LB-T, “underperform”) to $29 from $28. Average: $32.20.

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Though they see both monentary and fiscal policy remaining “highly supportive,” analysts at RBC Dominion Securities expressed concern about the ability of gold prices to maintain growth in 2021.

“Following gold’s correction in mid-2020 from an abatement of prior speculative investment, prices have rebounded, largely reflecting a one-sided reflation trade of rising inflation absent rising nominal yields, and increasing short US$ positioning,” the firm said in a research report. “Should positioning normalize, economic growth track favourably, or monetary conditions tighten from an exceptionally low baseline, gold price momentum in 2021 may be challenged. Nonetheless, gold equities today are well-positioned financially to withstand volatility and valuations do not factor in a continuation of current higher prices.”

The firm lowered its 2021 gold price forecast by 4 per cent to US$1,815 per ounce (from US$1,893). Its 2022 and 2023 fell by 1 per cent and 3 per cent, respectively, to US$1,785 and US$1,750.

“In June 2020, the FOMC issued initial post-pandemic targets, outlining exceptionally accommodative monetary policy and clear bias to only tighten once inflation has sustainably achieved, and potentially exceeded, the Fed’s 2-per-cent target,” RBC said. “Consensus expectations now outline YoY inflation could temporarily surpass 2.5 per cent in 1H21, building upon the reflation narrative, and that multi-year inflation/growth/employment expectations are largely tracking ahead of original FOMC targets. With longer-term 10-year market inflation expectations now having increased to 2.10 per cent, in line with the Fed’s 2 per cent, while nominal rates have been slow to adjust (10-year 1.20 per cent), we see risks that economic growth could lead to nominal rate changes that match or outpace inflation changes, or that that incremental monetary policy changes going forward could skew (eventually, and somewhat) tighter. These changes could pressure real rates higher, a negative for gold.”

Analyst Josh Wolfson made the following target price changes to stocks in his coverage universe:

• Agnico Eagle Mines Ltd. (AEM-N, AEM-T, “sector perform”) to US$83 from US$88. Average: US$93.83.
• Alamos Gold Inc. (AGI-N, AGI-T, “sector perform”) to US$9 from US$10. Average: US$11.68.
• Barrick Gold Corp. (GOLD-N, ABX-T, “outperform”) to US$30 from US$31. Average: US$33.09.
• B2Gold Corp. (BTG-N, BTO-T, “sector perform”) to US$6.75 from US$7.50. Average: $11.67.
• Endeavour Mining Corp. (EDV-T, “outperform”) to $47 from $51. Average: $50.27.
• IAMGold Corp. (IAG-N, IMG-T, “sector perform”) to $4.50 from $4.75. Average: US$5.02.
• Yamana Gold Inc. (AUY-N, AUY-T, “sector perform”) to $6.25 from $7. Average: $10.48.

“Valuation looks fair at lower prices, and should higher prices continue, windfall gains have the potential to be extended. At spot gold, our coverage trades at a 2021/22 estimated FCF/EV [free cash flow to enterprise value] of 6.2 per cent/6.4 per cent and EV/EBITDA of 7.3 times/7.1 times (vs. S&P500 valuation of 4.0 per cent/4.5 per cent and 14.3 times/13.1 times). Utilizing our mid-cycle pricing assumption of $1,500/oz, sector valuation represents a 2021 FCF/EV of 3.1 per cent and EV/EBITDA of 10.4 times.

“We continue to highlight (1) higher gold prices have de-levered sector balance sheets fully, supporting the ability for producers to withstand price volatility, (2) free cash flow remains robust and budgeting is based upon significantly more conservative prices than the current environment, (3) historically-concerning past pro-cyclical behaviors are largely absent, and (4) return of capital remains a growing focus, with dividends now competitive to the S&P and supported down to $1,350 per ounce. Short term, we see some risks heading into 2021 guidance and year-end reserves as the effect of COVID-19 has deferred capital, re-sequenced production, and reduced exploration, but this is reflected in our estimates

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Think Research Corp. (THNK-X) is “raising the standards in digital health,” said Canaccord Genuity analyst Doug Taylor.

He initiated coverage of the Toronto health-tech company, which went public at the end of December, with a “buy” rating on Monday.

“Think Research leverages a core set of technology assets focused on improving healthcare outcomes by better organizing and standardizing clinical knowledge and resources,” he said. “We believe the shares are reasonably valued relative to healthcare technology peers, at 4.5 times EV/Sales (2021 estimates), given the company’s near-term organic growth profile, high mix of software revenue, and geographic diversity. Our positive thesis on the name is based on a collapsing multiple gap as the company proves out a track record of delivering growth through its existing customer base, new customer additions after COVID-related delays, and potentially through M&A.”

“While 2020 was challenging year to implement transformational software in hospitals, the pandemic has highlighted the need for modern tools to distribute up-to-date best practices and clinical knowledge. We expect Think to deliver organic revenue growth that should accelerate into 2021, with upside to our forecasts if pandemic pressure on hospital decision makers dissipates. We model 86-per-cent growth in 2021 to $32.6-million (24 per cent organic) and 30-per-cent organic growth in 2022 to $43.3-million. The company is expected to produce modestly positive EBITDA in 2021 as excess cash flow is reinvested into growth.”

Mr. Taylor, currently the lone analyst covering the stock, set a $5.50 per share target.

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Industrial Alliance Securities analyst Chelsea Stellick initiated coverage of Montreal-based Carebook Technologies Inc. (CRBK-X) with a “buy” rating and $2.75 target, exceeding the $2.50 consensus.

We believe several factors will contribute to profitability growth in the coming years, including the close and successful integrations of the Target Co and Novus Health acquisitions, additional M&A, the successful roll-out of its myVitals COVID-19 app, global sales of the pharmacy solution, and the potential successful engagement with an insurance provider,” said Ms. Stellick.

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Analysts at Acumen Capital named seven stocks as their “Top Ideas” for 2021 on Monday.

“Our focus remains on proven businesses that have historically shown solid execution against a well-articulated business plan,”

Their picks are:

* Alaris Equity Partners Income Trust (AD.UN-T, “buy” rating and $19 target)

Firm: “We introduced AD as a Top Idea last week following the announcement of a partial distribution restart by PFGP, and two new partner investments totaling US$74-million. We view the current 7.7-per-cent yield and sub 70-per-cent payout ratio as attractive.”

* Hardwoods Distribution Inc. (HDI-T, “buy” and $36 target)

Firm: “HDI demonstrated the strength of its business model in 2020. Cost control measures helped HDI generate positive cash flow (before changes in working capital) in April and May prior to sales returning to more normalized levels. With strong U.S. housing expected to drive organic growth, a track record of acquisitions, and a proven business model, we believe the positive momentum will continue in 2021.”

* Information Services Corp. (ISV-T, “buy” and $25.25 target)

Firm: “ISV’s business proved resilient with only a brief initial impact from COVID-19 as customers shifted to working remotely. While ISV’s valuation has appreciated significantly since we launched in June 2020 (up 57 per cent), the company continues to trade at a discount to the peer group. Further upside is evident moving forward as management continues to execute on a measured growth strategy (organic and M&A) and more attention is brought to the name.”

* mdf commerce inc. (MDF-T, “buy” and $18 target)

Firm said: “MDF was our top dark horse pick in 2020 with a return of 91.2%. The Company experienced multiple expansion as it made significant progress on its strategic plan in 2020. Most notably, MDF renegotiated an MRR-based credit facility, completed a $47.8-million financing, and announced a significant competitive win with Aldi for the implementation of its Click & Collect grocery service in the UK and Ireland. We expect continued momentum in 2021.”

* Pollard Banknote Ltd. (PBL-T, “buy” and $42 target)

Firm: “The lockdowns and restrictions associated with the pandemic drove a sudden and dramatic increase in demand for scratch tickets and iLottery revenues skyrocketed. We believe 2021 will see a continuation of those trends, and Pollard is one of the best positioned companies in the sector to take advantage of that. The company’s JV partner, NeoGames, completed a successful IPO late in 2020, and the shares have since doubled in the past few weeks. We believe the demand for iLottery will only accelerate over the next several years, which should drive margins and revenue higher for PBL, and we believe will lead to a valuation re-rating higher.”

* Richards Packaging Income Fund (RPI-T, “buy” and $86 target)

Firm: “RPI had a record and memorable year in 2020. The COVID-19 pandemic drove demand to record highs for its products, and it delivered record results for top line growth and EBITDA margins. The units returned 50 per cent in 2020 and with the units recently retreating from its all-time highs north of $86, we believe that 2021 will continue the excellent performance. The company completed its first acquisition in five years in 2020, and we expect 2021 will see further acquisition opportunities.”

* Sangoma Technologies Corp. (STC-X, “buy” and $4.50 target)

Firm: “STC continued its strong performance in 2020, adding more than 40 per cent following its more than 100-per-cent gains in 2019. With an increasing revenue stream from its recurring services business, STC remains attractively valued in our opinion. The company is well funded to deliver acquisitive growth in 2021, and the stock returns to our top picks list for the third year in a row.”

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In other analyst actions:

* Cowen and Co. analyst Helane Becker upgraded Air Canada (AC-T) to “outperform” from “market perform” with a $27 target, up from $20. The average is $26.72.

* BMO Nesbitt Burns analyst John Gibson upgraded Trican Well Service Ltd. (TCW-T) to “outperform” from “market perform” with a $2.25 target, rising from $1.50. The average on the Street is $1.65.

“·Overall, we are taking a more risk-on approach to the sector in 2021, and believe the WCSB supply/demand balance for the pressure pumpers sits at a very high level, which should benefit the entire group,” he said.

“We believe TCW represents the best option based on its strong balance sheet, particularly given the severe swings in activity levels, pricing and profitability associated with the space.”

* Mr. Gibson also raised Black Diamond Group Ltd. (BDI-T) to “outperform” from “market perform” with a $3.50 target, up from $2.25. The average is $2.85.

“BDI has spent the past several years shifting its business outside of the oil and gas sector, and has proven out the stability in its core MSS/rental offerings over the past several quarters despite extremely difficult operating environments,” he said.

“The company also holds torque to improving energy activity levels, while its LodgeLink platform holds significant optionality.”

* BMO’s Devin Dodge raised Stantec Inc. (STN-T) to “outperform” from “market perform” with a $50 target, up from $41. The average is $47.41.

“After lagging over the last 6-8 months, we believe there is a favourable setup for the shares to outperform in 2021,” he said. “The demand outlook has been improving in its end markets and M&A activity has started to pick up.”

“To the extent that these trends gain traction, we believe the valuation discount relative to its peers will narrow.”

* BMO’s Mike Murphy upgraded Pipestone Energy Corp. (PIPE-T) to “outperform” from “market perform” with a $1.25 target, increasing from from 85 cents. The average is $1.04.

“We view the company as undervalued relative to Montney peers while maintaining a better-than-average balance sheet and delivering top tier production per share growth through 2022,” he said.

* BMO’s Randy Ollenberger raised MEG Energy Corp. (MEG-T) to “outperform” from “market perform” and increased his target to $6.50 from $4, which exceeds the $5.05 average. Credit Suisse analyst Manav Gupta raised his target for MEG to $5.25 from $4.25, keeping a “neutral” recommendation.

“While most producers struggled in 2020, MEG navigated the weak commodity prices and reduced its net debt load thanks to its hedge position,” said Mr. Ollenberger. “While the company’s debt levels remain well above its peers, we believe MEG’s leverage to stronger heavy oil prices provides investors with a compelling opportunity as the company continues to de-rate its balance sheet.”

* BMO’s Ray Kwan raised Crescent Point Energy Corp. (CPG-T) to “outperform” from “market perform” with a $5 target, up from $2.75. The average is $3.32.

“Given its 90-per-cent liquids weighting, we see Crescent Point as a beta play to rising oil prices,” he said.

* National Bank Financial analyst Michael Parkin upgraded Barrick Gold Corp. (ABX-T) to “outperform” from “sector perform” with a $40 target, down from $43. The average is $33.82.

* Jefferies analyst Samad Samana raised his target for Shopify Inc. (SHOP-N, SHOP-T) to US$1,375 from US$1,250 with a “buy” rating. The average is US$1,133.94.

* Scotia Capital analyst Paul Steep reinstated coverage of Dye & Durham Ltd. (DND-T) with a “sector outperform” rating and $52 target, exceeding the $45.25 average.

* JP Morgan analyst Phil Gresh raised his target for shares of Imperial Oil Ltd. (IMO-T) by a loonie to $29, maintaining a “neutral” rating. The average is $24.33.