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

RBC Dominion Securities analysts Nelson Ng sees a “large 2021 build under way” for Algonquin Power & Utilities Corp. (AQN-N, AQN-T), expecting its development pipeline to benefit from U.S. decarbonization initiatives.

However, in a research report released Monday, Mr. Ng trimmed his financial forecast for the Oakville, Ont.-based company after its fourth-quarter results, released Thursday after the bell, fell short of his projections and expecting it to feel the impact from the storms in Texas as well as “a modest delay in the complete date at several wind projects under construction.”

Algonquin reported adjusted earnings per share for the quarter of 21 US cents, missing Mr. Ng’s estimate by 2 US cents and the consensus on the Street by a penny. He attributed the miss “to weaker than expected contribution from the Regulated Utility segment (warmer than average weather in Missouri and higher operating costs at the Midstates and Energy North Gas Systems). The Generation segment’s contribution was also lower than expected, as renewable generation was 12 per cent below average.”

With the results, the company announced a plan to spend US$4.0–4.5 billion in 2021, which Mr. Ng emphasized is “a large portion (almost 45 per cent) of its $9.4-billion 5-year capital plan.”

“A number of wind facilities were recently completed or will be completed in the coming months,” he said. “Project development costs are currently a 2 cents per share drag on EPS, but we expect management to surface some additional opportunities from its 3.4 GW of prospective projects under development.”

“Although tax equity will play a key role in funding wind developments, management expects to raise some form of equity to fund its large capital program. Management indicated that it is evaluating the use of mandatory equity units, which receives 100-per-cent equity treatment from credit rating agencies, defers share dilution, and would allow the company to retain some upside if the share price appreciates.”

To reflect “a moderation in value allocated to the development pipeline in light of the market correction in the renewables sector and the higher interest rate environment,” Mr. Ng lowered his target for Algonquin shares to US$18 from US$20 with an “outperform” rating. The current average on the Street is US$17.41, according to Refinitiv data.

Elsewhere, CIBC World Markets’ Mark Jarvi lowered his target to US$17.50 from US$18.50 with an “outperformer” recommendation (unchanged) and TD Securities’ Sean Steuart trimmed his target to $18.50 from $20 with a “buy” rating.


National Bank Financial analyst Maxim Sytchev expressed “more confidence in the long-term transition” of Ritchie Bros. Auctioneers Inc. (RBA-N, RBA-T) as it aims to “move away from being viewed as a used-equipment eBay but more like an Amazon, i.e., as an asset manager/data provider in the used equipment space.”

“Own a good business at a fair price is almost never a bad strategy … if one takes a longer-term view,” he said. “We understand the pushback on the story which centres around three topics: 1) Tight used equipment availability; 2) Cost savings during COVID creeping back eventually; and 3) Mid-term GTV [gross transactional value] growth not living up to expectations.

“Caterpillar’s change in inventory levels is a good leading indicator for RBA’s GTV momentum due to a historical positive correlation. As CAT resumes production to meet surging demand, we could be looking at an inflection point for GTV. Post-COVID, a portion of the shelved expenses will come back, but management took advantage of the dislocation and made strides towards a more digitized business. Hence, on an apples-to-apples basis, RBA is a leaner entity now vs. 12 months ago. Lastly, investors have been disappointed by the lack of structural GTV acceleration, as lofty multiples were not supported by a high-growth earnings profile. That said, the company’s service revenue had been outpacing GTV growth. The ultimate blue-sky is when RBA could be viewed as the Amazon of used equipment – i.e., a used equipment ecosystem that encompasses transacting, pricing, analytics, financing, logistics and more.”

Mr. Sytchev said a recent virtual non-deal roadshow reaffirmed his view that the Burnaby, B.C.-based company is “moving in the right direction.”

Calling it a “high-quality asset,” he maintaining an “outperform” rating for its shares with a US$59 target, up from US$57. The average on the Street is US$61.


Amid concerns about the state of the Canadian office real estate sector, Laurentian Bank Securities analyst Yashwant Sankpal downgraded True North Commercial REIT (TNT.UN-T) to “hold” from “buy” with expectation of lower occupancy in 2021.

“TNT’s steady operating performance in 2020 underlines the success of its strategy of focusing on well-located, non-trophy office properties leased to government and credit rated tenants,” he said. “On the other hand, the overall Office market has seen a sharp rise in vacancy (100-400 basis points increases across Canada), with the national vacancy rate at 13.4 per cent in Q4/20, up 250 basis points year-over-year. Tenants are delaying leasing decisions considering the success of the work-from-home phenomena and the uncertainty around the eventual normalization. We believe that the Office sector has undergone a structural change; that demand for space would see a secular decline in the near to medium term, and that how much businesses spend on their occupancy costs would be dictated by competition.”

Mr. Yankpal made the move following the March 3 release of largely in-line fourth-quarter financial results that he thinks displayed True North’s “stable portfolio stats.” Funds from operations of 15 cents met both his estimate and the consensus projection on the Street, represenitng a 1-cent increase year-over-year.

“Property operations performed in line with our forecast,” he said.

“Portfolio occupancy stays high at 98 per cent, unchanged sequentially from Q3/20 and up 100 basis points year-over-year. Q4/20 SPNOI [same property net operating income], however, declined 2.3 per cent year-over-year (down 1.9 per cent for 2020), primarily due to the vacancy at their Edmonton property and lower parking revenues during the pandemic. TNT’s rent collection was strong, collecting 99 per cent of its contractual rents in 2020. TNT also leased/renewed 60KSF of space during the quarter, with an average rent increase of 8.3 per cent, including a 33KSF renewal with the Federal Government. TNT’s average lease term is 4.7 years. 75 per cent of TNT’s revenue originates from government and credit rated tenants.”

Mr. Yankpal trimmed his target for True North units to $6.50 from $7.25. The average target on the Street is $6.63.


SNC-Lavalin Group Inc.’s (SNC-T) transformation to a pure-play engineering services company is “well underway,” said Desjardins Securities analyst Benoit Poirier ahead of Tuesday’s release of its fourth-quarter 2020 financial results.

“On February 9, SNC announced that it had entered into a binding agreement to sell its oil & gas business to Kentech, including services and three ongoing LSTK projects. Management also provided an update on the review of its legacy LSTK litigation and commercial claims announced with 3Q20 results, and announced additional charges on the remaining LSTK projects. All in, the actions taken by management will result in a total charge of $480-million related to continuing operations in 4Q20, of which $230-million will be cash settled ($125-million payable in 4Q20).

“Overall, we believe these announcements will significantly derisk the story by reducing the company’s exposure to Resources LSTK projects while lowering the likelihood of future cost reforecasts in the remaining Infrastructure LSTK backlog. Our forecasts now reflect these adjustments. We expect management to focus heavily on growing the SNCL Engineering Services segment — a key driver of future value creation. We expect SNC to be re-rated as the division delivers top-line growth while continuing to deliver solid margins and FCF.”

Keeping a “buy” rating, Mr. Poirier raised his target for SNC shares to $38 from $35. The average on the Street is $33.46.

Meanwhile, BMO Nesbitt Burns’ Devin Dodge increased his target to $28 from $24 with a “market perform” rating.


Touting its “solid” financial position, “superior” cost structure and potential for free cash flow generation and production growth, Paradigm Capital analyst Adam Gill initiated coverage of Advantage Oil & Gas Ltd. (AAV-T) with a “buy” rating on Monday.

“We believe Advantage Oil & Gas (AAV) is well-positioned for a multiple expansion based on our 2022 outlook, with the company trading at 2.9 times EV/DACF [enterprise value to debt-adjusted cash flow],” he said. “We see the valuation re-rating toward 4.5 times given our belief that the sector is better positioned coming out of a very challenging 2020 and there will be some multiple appreciation in the E&P space. Our target 4.5-times multiple is in line with the base multiple for the group and is substantially higher than current valuations but not overly aggressive from a historical perspective. From a total underlying shareholder return perspective, we see Advantage generating a 10.7-per-cent FCF yield in 2021 while offering 14.9-per-cent production per-share growth (Q4-to-Q4), for a total return of 25.6 per cent on strip prices for 2021 (group median 25.8 per cent). For 2022, we see the total return at 20.2 per cent (in line with group median).

“Overall, Advantage offers relatively in-line returns for 2021 and a stronger return profile for 2022, in a business structure that is well suited for sustainability.”

Mr. Gill set a target of $4.40 per share, which exceeds the $3.72 average.

He also initiated coverage of a group of other stocks, including:

* ARC Resources Ltd. (ARX-T) with a “buy” rating and $12.50 target. Average: $10.66.

“Recently, ARC Resources announced a merger of equals with Seven Generations (VII-T) which creates the largest Montney producer in the WCSB,” he said. “Overall, we see many positives with the deal, from cost savings, capital allocation opportunities and the larger size of the company being advantageous when dealing with marketing partners and accessing capital markets. It will take time for the synergies of the deal to show, as will the reduction in leverage post-closing. We have taken a conservative approach to our valuation and use 4.5x 2022 target EV/DACF, not giving any premium even though ARC has typically earned one in the market. In time believe that multiple could expand as the positives of the deal shine through.”

* Birchcliff Energy Ltd. (BIR-T) with a “buy” rating and $4.15 target. Average: $3.86.

“As Birchcliff Energy (BIR) has firmed up production in the 80 Mboe/d range, priorities now turn to debt repayment,” he said. “The company is in a solid position to deliver FCF over the coming years, and we expect that debt will be cut by $186-million in 2021 given the strength in gas prices and Birchcliff’s unhedged position. From a total underlying shareholder return perspective, we see Birchcliff generating very strong FCF, with a 23.6-per-cent FCF yield in 2021 before the dividend, or 22.9 per cent after distribution. With a focus on debt repayment, production growth is limited but the all-in return (FCF yield + PPSG + dividend yield) is still attractive at 30.9 per cent versus the gas peer median of 25.8 per cent. While leverage is higher than peers, it is still sub-2 times for 2021 and is improving as debt is repaid. We also see BIR as the high-torque name for gas exposure.”

* Gran Tierra Energy Inc. (GTE-T) with a “hold” rating and $1.30 target. Average: 94 cents.

“We believe this is a ‘show-me’ story and success will be needed to regain investor confidence,” he said. “The company has also experienced a strong rally recently, up 238% from the start of Q4/20, driven mainly by retail investors adding to the upside that would come from the crude price improvement. With the rally, we have the stock trading at 3.5 times 2021 and 2.7 times 2022 EV/DACF, just below the peer medians of 3.7 times and 3.2 times, respectively, but with higher leverage. With a richer valuation in a higher-levered story, it is hard to see significant valuation uplift at this point relative to the group.”

* Headwater Exploration Inc. (HWX-T) with a “buy” rating and $5.50 target. Average: $3.79.

“Headwater Exploration (HWX) is well positioned for exceptional growth in the Clearwater play, starting from a low base with a substantial capital program developing wells with the best capital efficiencies in the sector,” he said. “In terms of growth, Headwater stands well above the pack over the next two years, with debt-adjusted production per-share growth of 317 per cent in 2021 and 38 per cent in 2022. Overall, we believe the stock is not inexpensive, but looking at the growth over 2021 the valuation does see significant compression into 2022; historically, the Headwater team has been able to attract a strong premium in the valuation.”

* Bonterra Energy Corp. (BNE-T) with a “hold” rating and $4.35 target. Average: $2.76.

“Overall, Bonterra’s situation is improving in 2021 as crude prices rise but given the leverage we believe the valuation multiple will shift to a discount. Reflecting that in our target price, we see implied upside in the stock but not as strong as peers,” he said.

* Kelt Exploration Ltd. (KEL-T) with a “buy” rating and $3.75 target. Average: $3.08.

“We believe the market should pay up for superior financial positions and that is reflected in Kelt’s valuation, with the company trading at 4.5 times 2022 estimated EV/DACF and the oil peer median at 3.2 times and the gas/liquids peer median at 3.0 times,” he said. “That said, in a catalyst-rich story with a superior balance sheet, we believe there is still good upside if the company can hold its premium in the market and we see an overall sector re-rate given the better business quality of the space in the current environment.”

* Pine Cliff Energy Ltd. (PNE-T) with a “hold” rating and 35-cent target. Average: 42 cents.

“We believe the Pine Cliff Energy (PNE) team has done a good job steering the company through a very challenging environment the past two years. PNE has made it through the AECO price collapse of 2019/2020 with debt much better positioned through friendly counterparties and leverage is greatly reduced from a straight debt perspective and stronger gas prices,” the analyst said.


Granite Real Estate Investment Trust (GRT.UN-T) is “carrying solid momentum, after major advances,” according to RBC’s Pammi Bir.

“Notwithstanding the tremendous challenges brought on by the pandemic, GRT made impressive strategic strides in 2020, including 9-per-cent NAVPU [net asset value per unit] growth, 8-per-cent AFFOPU [adjusted funds from operations per unit] growth, 4-per-cent distribution growth, and portfolio quality advances supported by more than $1-billion of acquisitions,” he said. “Amid a steeper yield curve, we believe GRT remains in solid form, supported by a strong growth outlook, robust industrial fundamentals, and among the sector’s strongest balance sheet.”

Calling its fourth-quarter 2020 results a “in-line yet strong finish” to the year, Mr. Bir think the Toronto-based REIT could enjoy a 2-3 per cent increase in same property net operating income “amid industrial strength.”

”SP NOI increased 2.1 per cent year-over-year (up 3.7 per cent FY20), mainly from rent growth, with the Canadian assets posting particularly strong expansion (up 9.7 per cent year-over-year),” he said. “Indeed, blended new and renewal leasing spreads improved 8 per cent over expiries. As well, GRT has made solid leasing progress, with approximately 80 per cent of 2021 expiries addressed at 5-per-cent renewal spreads.

“Importantly, we expect momentum to build in 2022 as accelerating maturities provide a stronger mark-to-market opportunity. Factoring in already high occupancy (99.6 per cent), our 2021 estimate reflects sound 2–3-per-cent SP NOI growth, with our 2022E at 3–4 per cent.”

Mr. Bir said his forecasts reflect “healthy” growth, leading him to raise his target for its units to $84 from $82 with an “outperform” rating. The average on the Street is $86.15.

“Against a backdrop of rising rates, we believe GRT remains in solid form to navigate, supported by a healthy growth outlook, improving asset quality, below-average leverage, ample liquidity, and our constructive view of industrial fundamentals,” he said.


Expecting to consumer mobility south of the border to “bubble up” over the next two months, RBC Dominion Securities analyst Nik Modi raised Coca-Cola Co. (KO-N) to “outperform” from a “sector perform” recommendation on Monday.

“Looking at U.S. sit-down restaurant reservation data, it’s very clear that consumer mobility tends to correlate tightly with weather,” he said. “In April 2020, restaurant reservations were down 100 per cent year-over-year due to stay-at-home orders, but that improved to a decline of 60 per cent by the end of June, down 55 per cent by the end of July and down 40 per cent by the end of August. Keep in mind this was just months after the onset of the pandemic when little was known about transmission, hospitals were being over-whelmed, and COVID-related deaths were steadily rising.

“Looking out over the next few months, we are expecting a material increase in consumer mobility driven by a combination of better weather, re-openings, stay-at-home fatigue, fairly efficient vaccine distribution, and overall better knowledge on protection against the virus. It’s worth noting that Lyft expects rideshare volume to turn positive beginning the week of 3/21 and anticipates the trend to continue throughout the remainder of 2021. We believe a stark improvement in consumer mobility will be the catalyst KO shares need to start moving higher.”

Mr. Modi hiked his target for Coke shares to US$60 from US$55, exceeding the US$57.59 average.

“When we downgraded KO in January, our rationale was pretty basic: KO was at our target and we had limited rationale to take up numbers given the surge in COVID cases. Needless to say, things have changed. The stock has retrenched and the COVID situation seems to have stabilized in the US and select international markets. We believe KO shares are poised to benefit from improved mobility (especially when the weather improves) and should emerge from COVID-19 stronger than it went in due to an organizational re-design,” he said.


In other analyst actions:

* National Bank Financial analyst Gabriel Dechaine upgraded Bank of Montreal (BMO-T) to “outperform” from “sector perform” with a $121 target, up from $113. The average on the Street is $115.40.

* Goldman Sachs analyst Neil Mehta upgraded Imperial Oil Ltd. (IMO-T) to “buy” from “sell” with a $36 target, rising from $26 and above the $33.58 average.

* TD Securities analyst Tim James raised Bombardier Inc. (BBD.B-T) to “speculative buy” from “hold” and his target to $1.15 from 65 cents, exceeding the 67-cent average.

* BMO Nesbitt Burns analyst Jackie Przybylowski upgraded Wheaton Precious Metals Corp. (WPM-N, WPM-T) to “outperform” from “market perform” with a US$57 target, versus a US$60.20 average, while RBC Dominion Securities’ Josh Wolfson raised it to “outperform” from “sector perform.”

* Ms. Przybylowski also upgraded Franco-Nevada Corp. (FNV-T) to “outperform” from “market perform” with a $197 target. The average is $207.90.

““As noted in our sector note, Bringing it all Together: Our Key Themes from BMO’s Metals & Mining Conference, the trends we noted last week at GMM are positive for royalty and streaming companies, and we are upgrading Franco-Nevada shares on an optimistic outlook for the sub-sector in general and for FNV in particular,” she said.

* Desjardins Securities analyst Kyle Stanley raised his target for Melcor Real Estate Investment Trust (MR.UN-T) to $5.25, matching the consensus, from $4.50 with a “hold” recommendation. BMO’s Jenny Ma increased her target to $5.50 from $4.85 with a “market perform” rating.

“Certainly 2020 was a particularly trying year for Alberta-focused Melcor REIT,” said Ms. Ma. “Despite the challenges, Melcor continued to execute with a tenant-first focus (resulting in healthy 80-per-cent-plus retention in 2020), and prioritized cash preservation through a distribution cut and payment deferrals (since paid).

“The REIT is also making good progress on refinancing its debt. While we are not expecting material portfolio growth by way of acquisition, operating metrics and cash flow should stabilize as leasing activity improves.”

* Desjardins’ Chris MacCulloch increased his target for Freehold Royalties Ltd. (FRU-T) to $10 from $8.50 with a “buy” rating. The average is $9.17.

“Although the stock was one of the best-performing names in the sector on Friday (March 5) on the heels of the 50-per-cent dividend bump, we see further upside as the market gains comfort with the oil price recovery,” he said. The company is also well-positioned to continue increasing the dividend later this year while retaining dry powder to fund further M&A opportunities.”

* National Bank’s Dan Payne raised Surge Energy Inc. (SGY-T) to “outperform” from “sector perform” and his target to 90 cents from 75 cents, exceeding the 64-cent average, , while Canaccord Genuity’s Anthony Petrucci doubled his target to $1 with a “speculative buy” rating.

“On Friday, Surge provided a positive operational update and announced an asset sale of the company’s working interest in its Nipisi and Provost assets for gross proceeds of $106-million. The assets to be sold include 2,700 boe/d, which equates to $39,250/flowing, which we view as an attractive price to garner for the assets, considering SGY pre deal was trading at just $32,700/flowing. Additionally, the company expects to replace the bulk of the sold production with a $39-million H1/21 drilling program. The net effect is a muted impact to our production and cash flow estimates, and a major boost to the company’s balance sheet. As such, we view the asset sale favourably for Surge, and we believe it positions the company to capitalize on strengthening oil prices,” said Mr. Petrucci..

* RBC Dominion Securities analyst Matt Logan raised his Tricon Residential Inc. (TCN-T) target to $14.50 from $14 with an “outperform” rating, while Scotia Capital’s Mario Saric increased his target to $15 from $14, keeping a “sector outperform” recommendation. The average is $14.58.

“Supported by on-going de-urbanization, de-densification, and demographic trends, the fundamentals for Tricon Residential Inc.’s business remain among the best in our coverage universe,” said Mr. Logan. “These positive factors are magnified by a number of company- and industry-specific tailwinds, such as: 1) further NOI margin expansion to 70 per cent plus, over time; 2) raising $1-billion-plus of third-party capital; and 3) continued cap rate compression, to close the single/multi-family gap. In our view, this should support high-single-digit to low-double-digit NAV and FFO per share growth.”

* RBC’s Walter Spracklin lowered his Winpak Ltd. (WPK-T) target by a loonie to $43 with a “sector perform” rating. The average is $48.75.

“While Winpak’s Q4 results were mixed, we see reasons for cautious optimism as we head into 2021, namely: 1) a demand outlook that should see a return to healthy volume growth this year; and 2) more constructive commentary on the current M&A backdrop. Though the commentary on M&A is interesting, we expect management to remain disciplined and see a larger deal as less likely until visibility improves,” he said.

* Scotia Capital analyst George Doumet hiked his target for shares of Recipe Unlimited Corp. (RECP-T) to $21 from $18.50, topping the $18.13 average. He kept a “sector outperform” rating. RBC Dominion Securities’ Sabahat Khan raised his target to $19 from $14 with a “sector perform” rating.

“Q4 results highlighted continued momentum in the off-premise channel, with Q4 and full-year 2020 off-premise penetration at 25 per cent and 21 per cent, respectively,” said Mr. Khan. “We anticipate continued growth in the off-premise channel driven by:1)ongoing investment in the company’s internal e-commerce infrastructure (i.e., IT platforms and launch of new apps/websites across its network); 2) launches of new order channels such as kiosks and digital assistance to improve contactless/curbside pickup/takeout; 3) an increased number of restaurants on online aggregator platforms (+850 restaurants leveraging online aggregators already, representing 63 per cent penetration); and, 4) expanding the Ultimate Kitchens concept (2 locations open currently, 2 more expected through H1/21, and potential for up to 10 total locations by year-end 2021). The cost to build for each location is less than $1-million and management indicated that each unit could generate AUV of $2-$3-million. We believe that Ultimate Kitchens could become a much larger contributor to Recipe’s growth over the medium- to long-term.”

* Scotia’s Phil Hardie raised his Power Corp. of Canada (POW-T) target to $38 from $35, maintaining a “sector perform” rating. The average is $34.71.

* Mr. Hardie increased his Alaris Equity Partners Income Trust (AD.UN-T) target to $18.50 from $17 also with a “sector perform” rating. The average is $18.43.

* CIBC World Markets analyst Kevin Chiang bumped up his target for Parkland Corp. (PKI-T) shares to $49 from $48 with an “outperformer” rating and Desjardins Securities’ David Newman increased his target to $48 from $46 with a “buy” rating, while Scotia’s Ben Isaacson trimmed his target to $50 from $52 with a “sector outperform” recommendation. The average is $48.54.

* CIBC’s David Popowich raised his Tervita Corp. (TEV-T) target to $4.50 from $4 with a “neutral” rating, while National Bank Financial’s Patrick Kenny raised his target to $4.50 from $3.50 with a “sector perform” recommendation. The average is $5.05.

* TD Securities analyst Jonathan Kelcher raised his Chartwell Retirement Residences (CSH.UN-T) to $13 from $12.50, keeping a “buy” recommendation, while Canaccord Genuity’s Brendon Abrams increased his target to $12 from $11.50 with a “hold” rating. The average is $12.63.

“Looking forward, our outlook following the quarter is largely unchanged, although we have increased our estimates to reflect stronger-than-expected results and a more constructive outlook,” said Mr. Abrams. “While we continue to believe Chartwell features a high-quality portfolio, leading operating platform, and strong management team, these factors are currently weighed against challenging fundamentals in the sector. For patient investors, and those willing to get in front of an eventual recovery, we believe this may well prove to be an exceptional entry point, particularly as the vaccine roll out accelerates. However, within our forecast period, which admittedly is more short-term in nature, we continue to see better opportunities in sectors with strong fundamentals; therefore, we remain on the sidelines by maintaining our HOLD rating.”

* TD’s Craig Hutchison increased his target for Labrador Iron Ore Royalty Corp. (LIF-T) to $41 from $40 with a “buy” rating. The average is $37.43.

* TD’s Daryl Young increased his Major Drilling Group International Inc. (MDI-T) target to $9.50 from $9 with a “buy” rating. The average is $9.75

* BMO Nesbitt Burns analyst John Gibson bumped up Ensign Energy Services Inc. (ESI-T) to $1.50 from $1.25 with a “market perform” rating, while TD’s Aaron MacNeil increased his target to $1.50 from $1.35 with a “hold” recommendation. The average is $1.39.

“ESI’s Q4/20 results were solid in the context of an improving North American oilfield backdrop,” said Mr. Gibson. “Commentary on its conference call also indicated the company should see continued rig additions across Canada and the U.S. in H2/21.

“Leverage still remains above our comfort level, and is the main rationale behind our Market Perform rating. That said, given our continually improving outlook for the sector we believe now is a good time to consider the name.”

* Raymond James analyst Frederic Bastien increased his target for Black Diamond Group Ltd. (BDI-T) to $4.50 from $4.10, keeping an “outperform” rating. The average is $3.33.

“We see BDI’s leverage declining more meaningfully than previously anticipated over 2021,” he said. “The company entered the year with momentum, having not only accelerated the expansion of its Modular Space Solutions (MSS) segment with the acquisition of US-based Vanguard, but also secured a grant to transition its digital workplace travel platform, LodgeLink, from concept to scale. More recently, however, good news has been coming from Workforce Solutions (WFS). Year-to-date, the segment has already secured over $36 mln of revenue for a sizable infrastructure project in Australia, change orders related to assets in support of the Coastal GasLink construction in B.C., and additional sales and rental projects in Eastern Canada. In light of these developments, and signs that the Canadian oil patch is open for business again, we are optimistic the bottom is in for WFS.”

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