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

Following the release of quarterly results that fell well below the Street’s expectations, Canaccord Genuity analyst Matt Bottomley sees the prospects of a near-to-medium-term turnaround for Canopy Growth Corp. (WEED-T) fading.

Accordingly, he lowered his rating for the Smith Falls, Ont.-based cannabis company to “sell” from a “hold” recommendation.

On Friday, shares of Canopy dropped 11.7 per cent in Toronto with the premarket release of quarterly results that led it to push back its timeline to reach positive adjusted earnings before interest, taxes, depreciation and amortization.

“As the company’s turnaround initiatives remain challenged, we believe the overall risk profile of Canopy’s ability to steady its Canadian operations and accelerate other international/U.S. growth endeavors is now even further elevated,” said Mr. Bottomley.

For the second quarter of its fiscal 2022, Canopy reported net revenues of $131.4-million, down 3.5 per cent quarter-over-quarter and below the analyst’s $139.6-million forecast. Net Canadian adult-use cannabis sales fell 2.3 per cent to $58.6-million, narrowly topping Mr. Bottomley’s $55.1-million estimate.

“The company noted that it holds the #1 position in premium flower (likely due to the integration of its deal for Supreme Cannabis) while gaining momentum in its vape and edible offerings,” he said. “Canopy stated that the sequential decline was due to market share softness across flower categories due to ‘insufficient supply of indemand attributes’. We find this somewhat troubling given that in addition to supply issues, the company also booked sizable inventory impairments in the quarter.

“Further, we note that the primary driver for the top-line miss was the ‘Other’ revenue categories, most notably a 40-per-cent sequential decline in its Storz & Bickel segment (accessories, vaporizers, etc.). Management pointed to price compression and shipping restrictions/shortages from supply chain difficulties as primary factors.”

With lower revenues, lower margins and impairment charges, Canopy reported an adjusted EBITDA loss of $162.6-million, down almost $100-million from the previous quarter and well below the Street’s projection of a loss of $50-million.

“Given the continued saturated state of the Canadian landscape, we have lowered our medium-to-long term domestic market share assumption for Canopy to 1–15 per cent (down from almost 20 per cent) as leaders in the space continue to experience market share erosion,” he said. “Further, given increased uncertainty around the company’s ability to inflect to profitability, we have increased the discount rate in or SOTP valuation by 300 basis points (now at 13–20 per cent.)”

Mr. Bottomley dropped his target for Canopy shares to $12 from $25. The average on the Street is $20.74, according to Refinitiv data.

Elsewhere, CIBC World Markets’s John Zamparo lowered the stock to “underperformer” from “neutral” with a $12 target, falling from $22.

“The primary factors that have supported Canopy’s premium valuation are strong revenue growth, an assumption of eventual market dominance, access to U.S. markets pending legalization, and a robust balance sheet,” said Mr. Zamparo. “We believe questions exist on all fronts. First, while cannabis is growing 40 per cent year-over-year in Canada, WEED was down 34 per cent, ex-M&A. Second, cash burn is still more than $100-million, while positive EBITDA may take another year and positive FCF three more years. Third, WEED’s U.S. exposure is a key asset, but legalization prospects have worsened. Finally, gross cash of $1.5-billion is very healthy, but we forecast WEED will enter a net debt position in F2023. Canopy may be right about being positioned to win as the industry matures, but we anticipate ongoing challenges through 2022.”

Others making target changes include:

* Cowen and Co.’s Vivien Azer to $16 from $33 with a “market perform” rating.

* Piper Sandler’s Michael Lavery to US$11 from US$15 with a “neutral” rating.

* Alliance Global Partners’ Aaron Grey to $18 from $20 with a “neutral” rating.


Seeing “higher near-term revenue and margin expansion in other names at this stage of the upcycle,” RBC Dominion Securities analyst Keith Mackey downgraded Enerflex Ltd. (EFX-T) to “sector perform” from “outperform.”

The rating change comes after shares of the Calgary-based supplier of products and services to the energy industry dropped 16.9 per cent on Friday in response to weaker-than-anticipated quarterly results.

Mr. Mackey expressed a preference for peers with “more direct exposure to the drillbit and operating leverage as rig counts improve.

“Given recent margin trends, we also see downside risk to current 2022 Street estimates,” he added. “Our revised 2022/23 EBITDA estimates are 10/7 per centbelow street consensus.”

.”We continue to see Enerflex as favourably valued relative to compression peers. The stock trades at an 6.0-times multiple on 2022 EBITDA, relative to compression peers at 8.0 times. At current levels, we see little value ascribed to the Engineered Systems business. However, increased clarity on Engineered Systems margin improvement is needed to help unwind the valuation gap, in our minds.”

After cutting his earnings expectations for 2022 and 2023 “primarily on softer margins in the Engineered Systems segment,” Mr. Mackey lowered his target for Enerflex shares to $11 from $13. The average is $11.83.

Others making changes include:

* ATB Capital Markets analyst Tim Monachello to $12 from $13 with an “outperform” rating.

“At current price levels, we believe that EFX offers a compelling risk-adjusted return and offers an attractive entry point for investors to gain exposure to 1) an ongoing inflection in gas compression and processing demand; 2) an expansion of recurring revenue, which looks to be accelerating as international project awards have been substantial in Q4; and 3) EFX’s strong positioning for energy transition projects, including RNG, CCUS, hydrogen, and flare gas to power,” said Mr. Monachello. “Therefore, we reiterate our Outperform rating and recommend investors ‘buy-the-dip’.”

* Raymond James’ Andrew Bradford to $12 from $9.25 with an “outperform” rating.

“We don’t expect Enerflex will offer much incrementally positive data points or catalysts for some time. 4Q bookings, if higher sequentially, won’t be communicated to the market until it reports 4Q results - three to four months from now. Same goes for BOOM contract wins. So less patient money- or momentum-oriented investors won’t have much reason to crowd into this stock over the near term,” said Mr. Bradford.


Seeing its recovery “underway and adequately priced in,” CIBC World Markets analyst Mark Petrie downgraded Canada Goose Holdings Inc. (GOOS-T) to “neutral” from “outperformer,” seeing limited upside after its shares jumped 19.3 per cent in Toronto on Friday with the release of better-than-anticipated quarterly results.

“Though Q2 represents only 20 per cent of annual revenue, we are encouraged by the broad-based recovery underway across product categories and geographies,” said Mr. Petrie. “Canada lags most materially, though we believe this is explained most substantially by a fall off in tourism affecting Toronto stores.”

“Canada Goose is well underway with an intentional strategy to emphasize DTC channels, and both stores and online are showing solid recovery. Store productivity has not fully recovered to prepandemic levels, and likely won’t until next year, but the company is likely to exceed its target of 10 new stores and we expect a similar number next year. Likewise, e-commerce growth of 34 per cent was nicely ahead of our forecast.”

The analyst thinks the luxury clothing company’s 2022 forecast may prove conservative, noting his estimates now sit at the high end of its guidance.

“We also believe GOOS is well positioned vs. peers on supply chain risks,” he said However, we believe the stock is valued on F23 expectations, and here it is more difficult to gain confidence in higher earnings until we gain greater visibility to a tourism recovery. Even still, we believe the company is well positioned to return to 20-per-cent-plus EBIT margins. ”

Mr. Petrie raised his target for Canada Goose shares to $67 from $60. The average on the Street is $60.75.

“While we remain positive about the long-term potential for Canada Goose as a global brand, and see significant near-term growth, we believe this is substantially reflected in shares, particularly after the post-Q2 move,” he said. “Higher growth could justify a higher multiple, though increasing seasonality (due to greater DTC mix) and a general lack of visibility are important counter-points.”

Others analysts making adjustments include:

* Credit Suisse’s Michael Binetti to $70 from $68 with an “outperform” rating.

* Evercore ISI’s Omar Saad to US$70 from US$60 with an “outperform” rating.

* Wells Fargo’s Ike Boruchow to $68 from $52 with an “overweight” rating.

* TD Securities’ Meaghen Annett to $60 from $54 with a “hold” rating.


Despite reporting “strong” results for a third consecutive quarter and expecting that momentum to continue through 2022, TD Securities analyst Michael Tupholme lowered his rating for Russel Metals Inc. (RUS-T) to “hold” from “buy” on Monday.

“Steel prices remain at historically high levels and we expect RUS’ earnings to continue to benefit over at least the near term,” he said. “That said, we see the stock’s risk/ reward profile as less favourable than it has been in recent quarters, and with our return to target offering insufficient upside to support a Buy rating, we have lowered our recommendation.”

On Thursday after the bell, the Toronto-based company reported third-quarter results of $195.5-million, exceeding both Mr. Tupholme’s $146.7-million estimate and the consensus forecast of $145.4-million.

“Overall, we view the release and acquisition as positive. Q3/21 results meaningfully outperformed, and Russel provided what we would describe as reasonably balanced near-term outlook commentary,” he said. “Meanwhile, the Boyd acquisition is expected to be accretive to Russel’s earnings, and appears to nicely complement RUS’ existing southern U.S. footprint.

“We expect Russel’s results to once again be strong in Q4/21, the company’s balance sheet is very healthy, and we commend management for its portfolio transformation initiatives (notably, exiting the OCTG/line pipe business). That said, in our view, several emerging developments within the North American steel market would appear to suggest that a more cautious approach to the sector may be warranted. Specifically, we note that service center inventory levels have been increasing in recent months (now back to approximately historical average levels on a months-of-supply basis). In addition, mill lead times have continued to ease. Meanwhile, regarding demand, the year-over-year rate of change in service center shipments has continued to weaken, of-late. Finally, we note that the benchmark U.S. HRC price has recently softened (US$1,880 per ton, down 4 per cent vs. its early-October peak). To the extent that HRC experiences further downward pressure, all else being equal, we believe that this would weigh on RUS’ share price (given the strong historical correlation between RUS and HRC.”

The analyst maintained a $40 target for Russel shares, which sits 11 cents below the consensus.

Others making changes include:

* RBC’s Alexander Jackson to $43 from $41 with an “outperform” rating*

“Russel continues to execute on its strategy to improve its margin profile through investment in value-added processing at its Metals Service Centers and via opportunistic acquisitions, while reducing exposure to the lower-return OCTG/line pipe business,” said Mr. Jackson. “We revise our model following Q3 results, updating for the acquisition of Boyd Metals and adjusting our estimates higher for the Steel Distributor business in 2022.”

* BMO’s Devin Dodge to $36 from $33 with a “market perform” rating.

“RUS has delivered better-than-expected financial performance throughout 2021. While recent financial performance benefited from unprecedented tailwinds, we acknowledge that RUS has executed very well and taken advantage of the opportunities presented. However, with industry conditions set to become less favourable, we believe the risk/ reward for the shares is balanced,” said Mr. Dodge.

* Stifel’s Anoop Prihar to $42.80 from $41 with a “buy” rating.


Though Telus International Inc. (TIXT-N, TIXT-T) appears poised for improved organic growth in 2022, Citi analyst Ashwin Shirvaikar warned investors its valuation currently appears “full.”

On Friday, the Vancouver-based subsidiary of Telus Corp. (T-T) reported revenue for the third quarter of US$556-million, up 30.3 per cent year-over-year but narrowly below the consensus forecast of US$559-million. Adjusted earnings per share of 26 US cents was 2 US cents higher than the Street’s projection.

After maintaining its full-year guidance, its shares slid 6.4 per cent in Toronto.

“We believe the unchanged outlook was the main driver of the stock underperformance following earnings but note that it was unchanged despite incremental FX pressure,” said Mr. Shirvaikar. “The company continues to see robust demand for content moderation and AI data solutions including some momentum returning in AI projects for hyperscale tech companies. We believe this sets TIXT up for a backdrop of accelerated organic growth in 2022 which is enhanced by the Lionbridge AI acquisition lapping and becoming part of the organic base. Margin performance also continued to be solid in the quarter, benefitting in this shift to higher-value services.”

Upon resuming coverage of the stock after a period of restriction, he set a “neutral” rating and US$40 target for its shares. The average on the Street is US$37.58.

“TELUS International has done a good job pivoting its business to faster growth areas through organically landing and expanding with high growth clients in its traditional digital customer experience business while also acquiring high growth businesses in adjacent areas to its core business (i.e. content moderation and data annotation),” Mr. Shirvaikar said. “The company is generally in a large and growing end market where it has been able to achieve headline financial metrics at or above industry-leading levels. TELUS International’s business does carry with it a number of risks. One factor to consider is that the company has come together in its current form fairly recently and so proof points on sustainable revenue and earnings growth metrics in its current form will need to be proven in coming quarters and years. We would also keep in mind the exposure to economic cycles, geopolitical risks related to its delivery, high client concentration, and M&A-related risks (both integration risk and industry-specific risks related to entering adjacent areas) given the significant investments it has made. Finally, we believe the current valuation reflects a balanced risk/reward given the items mentioned. Taken together, we believe a Neutral rating on TIXT is justified.”

Elsewhere, RBC’s Daniel Perlin raised his target to US$41 from US$36 with an “outperform” rating.

“TIXT delivered solid results for its third quarter, despite a slowdown in organic growth due to a tough year-over-year comp, while reaffirming full year guidance,” said Mr. Perlin.

BMO’s Keith Bachman increased his target to US$40 from US$37 with an “outperform” rating.

“We thought Telus reported a reasonable though mixed quarter, with a very modest revenue miss but better-than-expected margins,” said Mr. Bachman. “FX was less help than originally anticipated, but organic revs still decelerated by about 2pts from the June quarter. Telus, like the rest of services, faces incremental cost and attrition pressures as we look into 4th quarter and 2022. Net, we remain positive on Telus’s ability to generate mid/lowteens organic rev growth and generate modest margin expansion.”


RBC Dominion Securities analyst Robert Kwan expects investors to be focused on the capital allocation plans for Enbridge Inc. (ENB-T) ahead of its annual Investor Day event on Dec. 7.

“The company has messaged having $5-6 billion of ‘annual investable capacity’, which it has conceptually split into approximately $3-4 billion per year in ‘high priority’ investments and $2 billion per year of ‘incremental capacity’,” he said. “At Enbridge Day, we think the company will strike a balance between highlighting opportunities it sees for investing in growth and explaining its framework for capital allocation overall, including how it is thinking about the return of capital to shareholders.”

“Over the past year, many of our discussions have centered around what Enbridge will do with its roughly $2 billion of remaining investable capacity once the Line 3 Replacement project is complete (and it came into service on October 1). We believe that share buybacks will feature in the plan for 2022 (possibly with a buyback target of $0.5-1.0 billion), particularly if Enbridge decides to moderate its dividend growth (i.e., the capital being returned to shareholders in a different fashion). We would also not be surprised if the company also looks to delever via ‘warehousing’ capital on the balance sheet so that it can quickly move on new opportunities should they arise.”

Following the release of largely in-line third-quarter results on Friday, Enbridge reiterated its guidance for 2022, including discounted cash flow of $4.70-5.00 per share (versus Mr. Kwan’s $4.88 projection) and an EBITDA range of $13.9-14.3-billion (versus $14.059 billion).

“Management commented that it is ‘anticipating tailwinds and headwinds to be roughly balanced for the rest of the year’, with solid system-wide utilization and the Moda acquisition being offset on an EBITDA basis by challenged Energy Services results, warmer weather, and a weaker U.S. dollar,” the analyst said. “On a distributable cash flow basis, management also cited trends in its interest expense, cash tax expense, and maintenance capex as being tailwinds to its guidance.”

Though he made a narrow reduction to his 2023 estimates to account for its guidance of Energy Services losses, Mr. Kwan raised his target for Enbridge shares to $61 from $57 with an “outperform” rating. The average is $55.47.

Elsewhere, National Bank’s Patrick Kenny raised his target to $54 from $51 with an “outperform” rating.

In a separate research note, Mr. Kwan also increased his Sprott Inc. (SII-T) target to $60 from $54, maintaining a “sector perform” rating. The average is $57.76.

“Sprott reported strong Q3/21 results, highlighted by significant investor interest/demand for “U”ranium (since July 2021, Sprott Physical Uranium Trust’s AUM grew from US$630-million to US$1.6-billion),” he said. “The pending URNM acquisition adds further leverage to the uranium market. Bigger picture, Sprott has benefitted from its high exposure to precious metals and resources and plans to continue expanding into new opportunities (e.g., targeting de-carbonization resources). We see Sprott’s shares as attractive for investors looking for a defensive investment idea with current positive fundamentals and high exposure to precious metals/resources.”


IA Capital Markets analyst Elias Foscolos thinks Brookfield Business Partners LP’s (BBU.UN-T, BBU-N) third quarter “speaks positively” to its overall outlook and expects “it is only a matter of time before we see an anticipated ramp-up in monetization activity as the Company enters the next phase of its growth journey.”

On Friday, Brookfield reported adjusted earnings before interest, taxes, depreciation and amortization of US$443-million, exceeding both Mr. Foscolos’s US$415-million estimate and the consensus forecast of US$387-million. The beat was driven by a “strong” performance in its Business Services and Industrials segments.

“BBU reiterated that it has several funding levers, including existing liquidity, along with potential up-financings and distributions within its existing portfolio,” said the analyst. “Given the size of BBU’s portfolio and with several businesses most likely considered mature at this stage, we believe investors are eagerly awaiting an expected ramp-up in monetization activity.”

“Our valuation now captures our full-year 2022 forecasts. As such, we are building in the recently announced Lottery Business starting in mid-2022, which based on further analysis we estimate will generate low single-digit FFO accretion. We are also layering in the contribution from DexKo, which closed in October. Additionally, estimate changes in existing businesses increase our NAV anchor point.”

Maintaining a “buy” recommendation for Brookfield Business Partners shares, Mr. Foscolos raised his target to US$56 from US$53. The average on the Street is US$53.50.

Elsewhere, others making target adjustments include:

* BMO Nesbitt Burns’ Devin Dodge to US$58 from US$55 with an “outperform” rating.

“Against the backdrop of elevated capital deployment activity, we expect monetization efforts to progress that will reinforce BBU’s capital resources and potentially serve as a catalyst for the units. Meanwhile, the portfolio companies are performing well and earnings of the broader platform continue to shift higher. BBU remains our top pick,” said Mr. Dodge.

* Desjardins Securities’ Gary Ho to US$57 from US$54 with a “buy” rating.

“BBU reported strong 3Q results despite incurring one-time costs at Westinghouse (WH),” he said. “The overall portfolio performed well, with some smaller investments contributing to robust year-over-year growth. Sagen results outperformed. Integration of recent acquisitions will be a near-term focus. The launch of the BBUC corporate structure and monetizations present potential positive catalysts.”

“Our positive investment thesis is predicated on: (1) a secular shift in investor appetite for private alts to drive capital flows into the asset class—BBU offers investors a unique way to gain PE exposure without liquidity constraints; (2) BBU’s team has delivered a solid investment return track record; (3) BBUC structure should help broaden the investor base; and (4) BBU’s ability to leverage BAM’s extensive platform.”

* RBC Dominion Securities’ Geoffrey Kwan to US$62 from US$61 with an “outperform” rating.

“Q3/21 Company EBITDA was slightly above our forecast,” said Mr. Kwan. “BBU has had a very active year making new acquisitions, which should help increase NAV growth. Furthermore, the paired entity/exchange corp. structure might be completed by the end of the year, which could also be incrementally positive for the unit/share price by potentially attracting new investors. Finally, we think BBU is likely to improve its Corporate balance sheet liquidity in the next few quarters via dividends from investee companies and potential monetizations, which could further benefit BBU’s valuation.”

* Scotia Capital’s Phil Hardie to US$56 from US$54 with a “sector outperform” rating.


In other analyst actions:

* Canaccord Genuity analyst Doug Taylor downgraded Toronto-based Think Research Corp. (THNK-X) to “speculative buy” from “buy” with a $3 target, down from $5. The average is $5.05.

“Think made a small tuck-in acquisition of Pharmapod.” said Mr. Taylor. “The consideration paid, at $1-million in mostly stock, is immaterial. However, the asset, which is a competitor to some of Think’s existing data capture technology, should quickly become profit-accretive and brings significant reach into the Canadian pharmacy market. At the same time, we believe activity levels for Think’s healthcare services likely remained subdued through the summer, leading us to reduce our Q3 estimates. Valuations for digital health assets have seen significant multiple compression in recent months and we have reduced our valuation on Think accordingly.”

* RBC Dominion Securities analyst Keith Mackey cut Enerflex Ltd. (EFX-T) to “sector perform” from “outperform” and his target to $11 from $13. The average on the Street is $11.83.

* Canaccord Genuity analyst Yuri Lynk raised his Badger Infrastructure Solutions Ltd. (BDGI-T) to $38 from $35 with a “hold” rating, while TD Securities’ Daryl Young bumped up his target to $36 from $35, keeping a “hold” rating and BMO’s Jonathan Lamers increased his target to $43 from $42 with an “outperform” rating. The average is $39.19.

“We continue to like Badger’s long-term growth prospects and associated EPS/DPS upside in a cyclical recovery,” said Mr. Lynk. “However, the company’s valuation appears fair at this point, especially as it goes into two typically seasonally weaker quarters with gross margin still tracking significantly to pre-COVID levels mainly due to elevated labour costs. Badger shares trade at 24 times 2022 estimated EPS vs. their 19 times long-term average.”

* RBC Dominion Securities analyst Greg Pardy raised his target for shares of Baytex Energy Corp. (BTE-T) to $4.50 from $4, keeping a “sector perform” rating. The average is $4.65.

“Baytex remains on a pathway guided by consistent operational delivery, free cash flow generation and balance sheet deleveraging via debt reduction. The company’s emerging Clearwater play is taking flight and has added sizzle to the story,” said Mr. Pardy.

* Stifel analyst Cody Kwong increased his Cardinal Energy Ltd. (CJ-T) target to $6.50 from $5.25, topping the $5.85 average, with a “buy” rating.

“The big takeaway in the 3Q21 earnings release weren’t the earnings themselves, but more so the road map management laid out that would see them achieve a conservative net debt target and then re-introduce a dividend back into its business midway through 2022. Given the compelling levels of FCF outlined in our estimates, the implied yield Cardinal could initially distribute is nearly 8%, a level that is certainly something we expect to capture the market’s imagination,” he said.

* Credit Suisse analyst Manav Gupta increased his target for Cenovus Energy Inc. (CVE-T) to $20 from $18, exceeding the $18.83 average, with an “outperform” rating.

* Stifel analyst Cody Kwong moved his target for Enerplus Corp. (ERF-T) to $19 from $14, exceeding the $14.98 average, with a “buy” rating.

“With the achievement of net debt targets in 4Q21 which is earlier than expected, the Company has quickly ramped up its return of capital efforts, led by an aggressive $200-million buyback campaign that is slated to be executed within the next 150 days,” said Mr. Kwong. “In addition, Enerplus announced the third increase to its base dividend in 2021, raising it this time by 8 per cent, to $0.041 per quarter. The 3Q21 results were largely inline on a production and FFO basis, and generated from less capital deployment than anticipated. With the recognizable acceleration of its return of capital plans now unfolding, and our belief it will grow from here, we are meaningfully increasing our target price,” he said.

* Scotia Capital analyst Phil Hardie trimmed his Fairfax Financial Holdings Ltd. (FFH-T) target to $775 from $790 with a “sector outperform” rating. The average is $736.33.

“Fairfax delivered an arguably mixed quarter, with EPS coming in ahead of expectations largely reflecting the timing of an expected gain related to its Indian fintech investment more than offsetting underwriting results that fell short of expectations,” he said. “BVPS rose 4 per cent sequentially with the stock trading at an almost 25-per-cent discount to its ‘fair book value’. Following the release of the results, the stock extended its rebound off of recent lows, likely indicating that its valuation discount has reached a point where it is simply too steep to ignore. We continue to view Fairfax as one of our top value plays.”

* National Bank Financial analyst Maxim Sytchev raised his IBI Group Inc. (IBG-T) target to $15 from $14 with an “outperform” rating, while Acumen Capital’s Jim Byrne increased his target to $15 from $13 with a “buy” recommendation and Raymond James’ Frederic Bastien raised his target to $15 from $14 with an “outperform” rating. The average is $15.38.

“IBI Group continues to leverage its differentiated technology-centric business model to attract staff from a globally diversified talent pool, produce above-average internal growth rates, and sustainably improve profitability over time,” said Mr. Bastien. “For proof consider that in 3Q21, IBI’s net revenue grew 6.5 per cent organically while its margins rose a stronger-than-expected 60 bps to produce yet another resounding quarterly beat. Our optimism for the firm’s ability to execute on its record backlog and direct FCF towards strategic investments that facilitate growth and business efficiency is reflected in our higher target price.”

* Canaccord Genuity analyst Scott Chan raised his IGM Financial Inc. (IGM-T) target to $58 from $54, topping the $55.67 average, with a “buy” rating, while CIBC’s Nik Priebe increased his target to $60 from $55 with an “outperformer” rating and BMO’s Tom MacKinnon bumped up his target to $54 from $49 with a “market perform” rating.

“IGM reported another high-quality adj. EPS beat. The firm is firing on all cylinders, benefiting from market tailwinds,” said Mr. Chan.

* CIBC World Markets analyst John Zamparo raised his Jamieson Wellness Inc. (JWEL-T) target to $44 from $40, topping the $43.10 average, with an “outperformer” rating.

“Jamieson’s ability to generate consistent, predictable and meaningful growth is arguably unmatched in the entire consumer sector,” he said. “Across revenue, EBITDA, and EPS, the company has missed consensus estimates on only one metric once since Q4/2018. Cost pressures have been capably managed, the sector’s ongoing secular tailwind continues, and potential catalysts exist in the form of future M&A or a change in the Chinese distribution model. This premium business deserves its premium multiple. We now look to the average of 2022 and 2023 estimated EPS (formerly just 2022); our 28-times multiple (previously 27 times) leads us to an increased price target of $44 (from $40). Jamieson remains Outperformer-rated and one of the most reliable stocks in the consumer sector.”

* RBC’s Paul Treiber increased his Kinaxis Inc. (KXS-T) target to $225 from $190 with an “outperform” rating. Others making changes include: Canaccord Genuity’s Robert Young to $225 from $200 with a “buy” rating; Scotia Capital’s Paul Steep to $213 from $204 with a “sector outperform” rating; CIBC’s Stephanie Price to $215 from $200 with an “outperformer” rating and ATB Capital Markets’ Martin Toner to $240 from $200 with an “outperform” rating. The average target on the Street is $214.80.

* National Bank Financial analyst Ryan Li cut his Lassonde Industries Inc. (LAS.A-T) target to $191 from $195 with an “outperform” rating. The average is $205.50.

* Scotia Capital analyst Mark Neville cut his Magna International Inc. (MGA-N, MG-T) to US$100 from US$105 with a “sector outperform” rating, while Wells Fargo’s Colin Langan raised his target to US$84 from US$82 with an “equal weight” recommendation. The average is US$100.31.

“Q3 results were challenged, but, in our opinion, Magna managed through the situation reasonably well,” said Mr. Neville. “While we take our 2022/2023 earnings estimates lower (on higher costs), we would still characterize the Q as in line and our outlook as unchanged. We continue to anticipate a gradual recovery in industry volumes through 2022, before fully recovering in 2023. Higher volumes will translate into higher margins, while more consistent volumes should largely eliminate inefficiencies related to unpredictable scheduling changes. With respect to inflationary pressures, the company is largely covered (via customer resale programs) on raw materials but will need to drive efficiency gains to overcome certain costs (e.g., higher energy costs) – past restructuring should help. The company is in excellent shape to manage through the current environment. .. and supply chain issues should eventually resolve themselves – we want to be there when they do, and look to positive incremental data points on production (not earnings) as the N/T catalyst to take the equity higher.”

* Raymond James’ Michael Glen cut his target for Martinrea International Inc. (MRE-T) to $15 from $17 with an “outperform” rating, while BMO’s Peter Sklar lowered his target by $1 to $12 with a “market perform” rating. The average is $16.44.

“Martinrea remains a deep-value stock, in our view, and while the company is seeing near-term headwinds related to chip shortages, ongoing launch costs, and the Metalsa integration, we continue to believe that benefits from ongoing operational improvement efforts will be realized over the medium to long-term,” said Mr. Glen. “In that regard, management reiterated a view that the company will be positioned to generate upwards of $200-million of free-cash in 2023, but we understand investors will need to wait for a much higher-degree of visibility on that outcome before paying for it. On the chip shortage, there continues to be conflicting accounts as to how it will impact production volume through the balance of the year (and into 2022), but (most) industry commentary has now shifted to the side of uncertainty.”

* IA Capital Markets analyst Elias Foscolos raised his target for Pembina Pipeline Corp. (PPL-T) to $45 from $44, topping the $43.74 average, with a “hold” rating.

“Pembina’s Q3 results, which included Adj. EBITDA of $850-million, beat expectations on the back of strong Marketing results,” he said. “PPL plans to release a capital budget update and guidance update in early December at which time we will receive more clarity regarding which capital projects may be reactivated. On balance we consider the results in line, with Marketing tailwinds offsetting some Pipeline headwinds.”

* CIBC World Markets analyst Hamir Patel cut his Resolute Forest Products Inc. (RFP-N, RFP-T) target to US$14 from US$15, below the US$16.25 average, with a “neutral” rating.

“While we remain Neutral on Resolute (after downgrading most commodity lumber names last month), we believe the company’s lumber segment (60 per cent of 2022 EBITDA) is well-positioned to grow further in the U.S. via M&A given the company’s substantial tax assets,” he said.

* Mr. Patel also lowered his Western Forest Products Inc. (WEF-T) target to $2 from $2.50 with a “neutral” rating. The average is $2.53.

“We expect the impact of BC old growth protection initiatives to be larger than consensus assumptions,” he said. “Although some observers have pointed to affected old growth being situated throughout the province, our trade contacts estimate 80 per cent of the impact will be felt on the Coast (WEF’s operating area). At the same time, we suspect environmental groups will be much more vocal about pushing the government to follow through with its plans on the Coast given the nature of protests to date. While WEF has strong liquidity ($385-million), the company has been slow to pursue geographic diversity outside of British Columbia and would now face peak vendor expectations if it moves to become more aggressive on the M&A front.”

* RBC’s Sabahat Khan raised his Ritchie Bros Auctioneers Inc. (RBA-N, RBA-T) to US$72 from US$65 with a “sector perform” rating, while National Bank Financial’s Maxim Sytchev increased his target to US$68 from US$65 with a “sector perform” rating and Raymond James’ Bryan Fast moved his target to US$74 from US$63 with a “market perform” rating. The average is US$69.43.

“Ritchie Bros. Auctioneers’ Q3 results were in line to ahead of RBC and consensus forecasts,” said Mr. Khan. “While we view Q3 results favourably, the tight equipment supply backdrop and the company’s elevated trading multiple leads to our neutral view on the shares.”

* Scotia Capital analyst George Doumet raised his Spin Master Corp. (TOY-T) to $52 from $48 with a “sector perform” rating. The average is $55.55.

“Once again, and for the third consecutive time, TOY handily beats expectations and raised their full-year guidance,” he said. “Similar to last quarter, the company raised its revenue guidance, while maintaining its adj. EBITDA range. And once again, there is some talk of conservatism given the strong holiday demand underpinned by strong POS exit data.

“While we continue to be impressed on how well the company has managed pressures from freight, packaging, and inputs, we see little upside from valuation (with shares trading at 10 times 2022 EBITDA estimates), especially in the context of what we believe could be a potentially tough comp headwind in 2022.”

* National Bank Financial analyst Patrick Kenny lowered his TC Energy Corp. (TRP-T) target by $1 to $65 with a “sector perform” rating. The average is $69.19.

* Desjardins Securities’ Jerome Dubreuil raised his target for Telus Corp. (T-T) target to $32 from $30, exceeding the $31.13 average, with a “buy” rating. Others making changes include: Scotia’s Jeff Fan to $36 from $34 with a “sector outperform” rating; CIBC World Markets’ Andrew Grantham to $31 from $30 with an “outperformer” rating and National Bank’s Adam Shine to $34 from $33 with an “outperform” rating.

“T’s 3Q21 financial results were in line with expectations while subscribers exceeded the Street’s forecast,” said Mr. Dubreuil. “One of the reasons for our bullish stance on T is the greater potential for higher telecom margins vs peers. In light of the quarter, we now have more confidence in this thesis. Coupled with over 8-per-cent year-over-year organic growth and expected further recovery from the pandemic, the stock is attractive, in our view.”

* RBC’s Cherilyn Radbourne raised her Toromont Industries Ltd. (TIH-T) target to $121 from $119 with an “outperform” rating. Other changes include: CIBC’s Jacob Bout to $113 from $109 with a “neutral” rating; BMO’s Devin Dodge to $124 from $118 with an “outperform” rating and Canaccord’s Yuri Lynk to $120 from $115 with a “buy” rating. The average is $120.39.

“We believe industry fundamentals are favourable within Toromont’s markets and the company has an excellent track record for capitalizing on these opportunities. Layering in industry-leading margins, attractive return on capital, a very strong balance sheet and an outlook that should support double-digit earnings growth through our forecast period, we believe the risk/reward for Toromont is compelling and it remains our preferred idea within the heavy equipment dealers,” said Mr. Dodge.

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