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

Given the heightened volatility in the Canadian technology sector, National Bank Financial analyst Richard Tse and Jon Shao emphasize there is “a lot is riding on earnings season.”

“The reality is that the entire group will be drawn in by what happens with the megacap (largely U.S.) tech names that begin reporting over the next few weeks,” they said.

“One datapoint we thought important to highlight again (from our Year Ahead) relates to estimate revisions. While much of the pullback in growth and Tech specifically has been caused by rates and inflation, another quiet contributor has been moderating estimate revisions in the S&P Tech Index. The question is whether these expectations are too conservative — or are they resembling closer to reality (of potentially decelerating growth). It’s likely a little of both. Whatever the case may be, the reality is that expectations have been flattening (below) which is typically not ideal for this group — we obviously saw the impact of that this past Friday.”

In a research report released Monday, the analysts updated their financial projections for both the fourth quarter of 2021 and full-year 2022, reaffirming their view that the sector offers “outsized relative growth long term with numerous themes that are just starting to scale.”

“As such, we believe the pullbacks are creating opportunities to wade into those themes,” they said. “That said, we are not oblivious to the underlying short-term environment which now appears will be more sustained through the early part of 2022 – that has us re-rating some of our names.

“In the short-term, we continue to think investors would be best positioned in CGI, Kinaxis, Nuvei, Magnet Forensics and TELUS International.”

The analysts made a series of target price reductions to stocks in their coverage universe. Those changes are:

* Docebo Inc. (DCBO-Q/DCBO-T, “outperform”) to US$85 from US$100. The average on the Street is US$89.87.

Mr. Tse: “With the pullback in high growth (valuation) names, particularly those lacking profitability in the short term, we’d be looking to opportunistically wade into DCBO on pullbacks. We continue to believe there is meaningful upside runway in this name as we look beyond the recent shift to value stocks.”

* E Automotive Inc. (EINC-T, “outperform”) to $21.50 from $24. Average: $28.47.

Mr. Tse: “In terms of the upcoming quarter, we’re expecting in-line results. We would note calendar Q4 is a seasonally softer quarter. We expect to see building momentum for E INC care of an industry shift from physical to digital automotive wholesale auctions.”

* Farmers Edge Inc. (FDGE-T, “sector perform”) to $4 from $5. Average: $4.52.

Mr. Tse: “We see downside risk to Farmers Edge’s FQ4 results. While Management was optimistic in regards to FQ4 results – expecting digital agronomy revenue to be up 33 per cent year-over-year and to have 20-25 per cent of its F21 PGP acres converted prior to the end of F21, we see risk to those targets given the lack of execution since its public debut. From a market perspective, according to the Ag Economy Barometer survey conducted by Purdue University, we’d note 57 per cent of the largest U.S. farmers surveyed expect input prices to rise by at least 20 per cent over the next 12 months, 10 times the average annual increase. We believe the same applies to Canadian farmers who continues to be the bulk of Farmers Edge customer base. With that backdrop, we think the appetite to deploy new (technology) product will be soft in the short term. "

* Lightspeed Commerce Inc. (LPSD-N/LSPD-T, “outperform”) to US$90 from US$120. Average: US$82.55.

Mr. Tse: “Not surprisingly, the sting of a short-seller report continues to hamper the valuation of LSPD. Our view has been that the overhang won’t lift quickly and will require consistent execution before it begins to fade. No doubt, that underscores the importance of the upcoming quarterly results. On that, we see an in-line quarter with some outsized risk care of selective global lockdowns in the quarter particularly as it relates to the hospitality segment. With respect to Lightspeed Payments, we expect continued momentum.”

* Magnet Forensics Inc. (MAGT-T, “outperform”) to $50 from $55. Average: $50.78.

Mr. Shao: “We’re expecting a strong FQ4 from MAGT as the Company continues to grow its market share with a suite of competitive offerings in the digital forensics market. As one of the best-performing Tech IPOs in 2021, Magnet Forensics is a good example of an early-stage name paired with a strong profitability profile. In our view, that combination of growth and profitability is coming from its unique advantages (an extensive artifact library, a complete digital forensic suite, a highly efficient sales model, etc.) in a market that has a very high entry barrier. That operating leverage, combined with what we believe to be a relatively closed market with only a limited number of players, is why we remain optimistic about this name.”

* MDF Commerce Inc. (MDF-T, “sector perform”) to $6 from $8. Average: $10.50.

Mr. Tse: “We see a balanced risk-reward profile. We acknowledge the Company has the financial flexibility to execute an ambitious growth strategy, and for that reason, we believe there’s potential option value in the name.”

* Nuvei Corp. (NVEI-Q/NVEI-T, “outperform”) to US$130 from US$160. Average: US$116.57.

Mr. Tse: “While Nuvei was another victim of a short attack report on December 8 2021, it’s been able to rebound off its lows. On December 16, 2021, NVEI closed at US$49.77 – it then bounced back to US$64.98 at close on the final day of trading of 2021, a 30-per-cent recovery. While off its all-time high, we think that bounce was off the back of the Company’s profitability and underlying cash flow strength. We continue to believe investors can opportunistically wade into this name. As for FQ4, we’re expecting solid results from Nuvei as the Company executes its strategy to drive scale from recent investments.”

* Pivotree Inc. (PVT-X, “outperform”) to $8 from $9. Average: $8.31.

Mr. Tse: “We’re expecting an in-line FQ4 given the continued headwind from the previous churn of some legacy customers, partially offset by contributions from its two recent acquisitions. That said, going into F2022, we’d expect to see the organic growth to accelerate care of a much cleaner comparable period.”

* Q4 Inc. (QFOR-T, “outperform”) to $12 from $15. Average: $14.58.

Mr. Tse: “We’re expecting essentially in-line results from Q4 in FQ4. From an industry perspective, we continue to believe there will be some permanency to virtual events with further short-term potential upside given the resurgence in cases (COVID).”

* Real Matters Inc. (REAL-T, “sector perform”) to $8 from $10. Average: $11.84.

Mr. Tse: “We see outsized risk to Real Matters FQ1 (CQ4). Through the quarter, the 10-yr U.S. Treasury Yield continued to creep higher, with an average rate of 1.5 per cent (up 61 basis points year-over-year). When it comes to 2021, re-fi volume declined by 40 per cent year-over-year, reasonable considering many borrowers refinanced in 2020 and early 2021 (per the Mortgage Bankers Association, MBA). Given REAL’s correlation with industry volumes, and the 10- year now trending higher, we believe it will weigh on the underlying performance.”

* Softchoice Corp. (SFTC-T, “sector perform”) to $30 from $32. Average: $33.93.

Mr. Tse: “We expect in-line results from the Company. Compared to last year, we’d say the relative valuation to peers looks much more reasonable, especially for a name that has defensive attributes such as a stable customer base and strong cash flow profile. These attributes might potentially lay the foundation for some relative outperformance in a year that’s considered tough for Tech. As such, we’d closely monitor the FQ4 performance as well as assess the impact from short-term risks (supply chain issue and wage inflation) before revisiting our thesis on this name.”

* Thinkific Labs Inc. (THNC-T, “outperform”) to $15 from $20. Average: $17.42.

Mr. TSe: “We expect in-line results for Thinkific in FQ4. In our view, the Company continues to execute its strategy laid out at the time of its IPO. On that, Thinkific remains in investment mode given its early days in the Company’s growth trajectory. Our view is that such investments will continue to fortify what we believe to be a leading platform for course creators. All-in, we view Thinkific as a developing name with some short-term risk from challenging year-over-year comparables care of COVID. Looking ahead, as those challenging comps are lapped, we believe the normalized growth trajectory will highlight the potentially meaningful runway of value.”

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After strong share price appreciation in 2021, National Bank Financial analyst Jaeme Gloyn thinks rising regulatory and policy “uncertainty” will constrain sector valuations and near-term share performance for Canadian mortgage providers.

Heading into fourth-quarter earnings season, he expressed caution despite the presence of several macro tailwinds, including “employment recovering the fastest on record, rebounding immigration, and excess household savings/disposable income above trend.”

“Regulatory temperature is heating up,” said Mr. Gloyn. “Most recently, the House of Commons finance committee announced it will hold hearings on January 17th, 21st and 24th to study causes of high inflation, including soaring real estate prices.”

“A wide range of other regulatory and policy tools are available to regulators: limits on activity (e.g., restrict share of lending to higher risk mortgages/consumers), higher down-payment requirements (e.g., CMHC will review down payments on investment properties), lower debt servicing thresholds (e.g., see CMHC adjustments in 2020), higher risk-weights for capital adequacy requirements, a stiffer stress test (e.g., most recently, OSFI kept the Minimum Qualifying Rate for uninsured mortgages stable in December 2021), and even climate-related measures (e.g., CMHC is developing a climate-risk score for real estate listings). Altogether, we believe this regulatory / policy uncertainty could constrain sector valuations in the near term. ... While data is limited to assess each potential item on the government agenda, we view HCG as most ‘at-risk’ given two factors: (1) greater exposure to residential mortgages (and less exposure to commercial mortgages that seem to garner much less regulatory attention); and (2) greater exposure to residential real estate investors.”

The analyst made a trio of target price reductions to stocks in his coverage universe:

* Home Capital Group Inc. (HCG-T, “outperform”) to $49 from $62. The average on the Street is $53.71.

“The lower target multiple compared to EQB reflects HCG’s greater exposure to residential mortgages and residential real estate investors,” he said. “We believe the company’s significant remaining excess capital will continue to drive an improved ROE profile and attractive high-single to low-double-digit EPS growth through 2023 (see here and here). In our view, this still merits a valuation re-rate from the recent trading range of 1.1 times.”

* Equitable Group Inc. (EQB-T, “outperform”) to $91 from $98. Average: $93.64.

“EQB moves to the top of our pecking order given a more diversified asset mix (e.g., commercial and decumulation loans) and funding mix (EQ Bank and covered bonds offer NIM upside) to manage potential regulatory headwinds and rising interest rates,” he said.

* First National Financial Corp. (FN-T, “sector perform”) to $46 from $52. Average: $46.42.

“We remain positive on FN’s industry-leading and diversified origination platform, diversified funding model, limited credit risk, defensive recurring revenue model and capacity to consistently raise the dividend,” said Mr. Gloyn.

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After recent discussions with president and chief executive officer Ian Dundas, RBC Dominion Securities analyst Greg Pardy reaffirmed Enerplus Corp. (ERF-T) as his favourite intermediate producer, citing “its consistently solid execution, balance sheet strength and bolstered scale in North Dakota post its two acquisitions in 2021.”

“Enerplus continues to exercise flexibility when it comes to shareholder returns and looks upon its common shares as offering attractive value,” he said. “In conjunction with its third-quarter results, the company raised its common share dividend 8 per cent (its third increase in 2021) to an annualized rate of $0.164 per share (1.2-per-cent yield), and boosted its share repurchase program to $200 million. Enerplus repurchased $142.7 million under this program in the fourth quarter of 2021, with the $57 million balance expected to be completed in the first quarter of 2022. Thereafter, the company will still have about 3 per cent (of its total 10 per cent) NCIB authorization to execute before its renewal date of August 1. Enerplus will continue to assess different capital returns, including base dividend growth, special/variable dividends, and further repurchases under its NCIB. The company is currently using a US$45 WTI price to evaluate the sustainability of its dividend and any potential increases.

“Enerplus has achieved comfortable scale in North Dakota post its US$465 million Bruin and US$312 million Hess Bakken acquisitions in 2021, but will remain opportunistically driven should further assets surface. As it stands, Enerplus sees over 10 years of Tier 1 drilling activity with its current Bakken inventory. Based on our discussion, it would surprise us to see Enerplus acquire anywhere but in the Bakken. Conversely, the company looks upon its non-operated Marcellus and Canadian waterflood operations as non-core, but would need to capture appropriate value under any disposition scenario.”

Mr. Pardy raised his target for Enerplus shares to $17 from $14 with an “outperform” rating. The average is $16.06.

“At current levels, Enerplus is trading at a 2022 debt-adjusted cash flow multiple of 3.2 times (vs. our North American intermediate peer group avg. of 3.5 times),” he said. “We believe the company should trade at an average/above average multiple given its consistent operating performance, capable leadership team and strong balance sheet, partly offset by portfolio concentration.”

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In a research report previewing the tear for Infrastructure & Construction (I&C) and property services providers, Raymond James analyst Frederic Bastien and Bryan Fast expect to see further gains after a strong 2021.

“We witnessed a great performance from the group in 2021, with 9 stocks more than doubling the gains of the TSX over the year as a fast rebounding economy, widespread shortages, and supply chain issues created a perfect storm for many of the resources-linked names in our coverage universe,” the analysts said. “The first half played out as expected, with small caps (BDI, NOA, ALTG, WJX), cyclicals (RUS) and laggards (SNC) outperforming large-cap and defensive names, and overextended stocks returning to earth (BEP and RBA). 2H21 performance was more mixed, as flaring inflation concerns brought a long overdue government tapering closer to reality, and emerging COVID-19 variants put yet another stick in the wheels of economic recovery. These challenges notwithstanding, our professional services firms and engineering consultancies (CIGI, IBG, STN, WSP) delivered exceptionally strong results for the year. To the extent these companies will have a hand in helping governments implement their green recovery plans and organizations transition to a net zero future, we believe their stocks have more room to run.”

The analysts say recent volatility has brought many stocks in their coverage universe into “attractive risk-reward territory” and led them to “turn more aggressive” on three stocks, which they upgraded on Monday.

“What is clear to us, however, is that the Fed’s hawkish pivot (and other central banks tightening) will exacerbate valuation scrutiny,” they said. “This leads us to broadly favour value over growth, and cyclical sectors over defensive ones (much like we did exactly twelve months ago). While Omicron presents another headwind for reopening names, we still believe they are poised for a strong 2022.

“From this group of well-capitalized stocks, we offer five high-conviction ideas: CIGI, STN, FTT, NOA, and DXT. Colliers and Stantec are both entering the year fresh off transformative acquisitions, with strong tailwinds and reasonable valuations still. Finning International and North American Construction Group will benefit from improved earnings capacity relative to prior cycles. Rounding out our Top-5 is Dexterra Group, an under-the-radar support services company showing compounding potential.”

Their rating changes were:

* Colliers International Group Inc. (CIGI-Q, CIGI-T) to “strong buy” from “outperform” with a US$180 target, up from US$160. The average on the Street is US$159.83.

Mr. Bastien: “We remain steadfastly convinced that CIGI’s efforts to foster and enterprising culture and further diversify its offering by services, disciplines and geographies will better equip the company to navigate future periods of economic uncertainty. With the line between Colliers and the engineering consultancies we cover, including Stantec, getting increasingly blurry, we also believe their valuations will ultimately converge. We reflect this in a target EV/EBITDA multiple of 14 times, which when applied to our newly introduced 2023 estimates yields a valuation of US$180 for CIGI (up from US$160). This implies a premium to the firm’s largest CRE plays, CBRE and JLL, which we justify by CIGI’s distinctive culture and exceptional track record of shareholder value creation.”

* FirstService Corp. (FSV-Q, FSV-T) to “outperform” from “market perform” with a US$200 target, up from US$195. Average: US$191.50.

Mr. Bastien: “FirstService has doubled the size of its commercial and large loss restoration business since entering the space in mid-2019, and fresh developments suggests management will continue prioritizing its growth. First Onsite notably completed four tuck-in acquisitions before the holiday break, further augmenting its footprint in Virginia, Wisconsin, Washington, and Hawaii. This impressive growth notwithstanding, FSV today commands only about 2-3% of the highly fragmented North American market for commercial and large loss restoration work, versus 3-4% for PE-backed Belfor Properties. We believe this leaves recently re-branded First Onsite with a long runway to expand its geographic footprint. Another priority of FirstService is to add capacity across its service lines to fulfill strong demand for home improvement services, and capitalize on emerging revenue opportunities. While this initiative should help facilitate above-average organic growth over the near future, we expect a tight labour market, wage inflation and ongoing COVID disruptions to dash any hope for further margin gains.”

* Stantec Inc. (STN-T) to “strong buy” from “outperform” with an $85 target, up from $76. Average: $78.29.

Mr. Bastien: “What we find remarkable is that STN’s strong performance transpired without much help from its US operations, which contracted organically during the year. Backlog is pointing up across the country, however, giving us confidence revenue growth will accelerate in future quarters. Add to that the US$1.2-trillion Infrastructure Investment and Jobs Act and the acquisition of Cardno’s North American and Asia-Pacific businesses, and we believe we have the makings of a pretty solid next 12-18 months. The 2,750-employee firm promises to not only strengthen Stantec’s ESG platform, much like Golder did for WSP, but also expand its global practice to 25 per cent of net revenue. Among other benefits, Cardno augments the infrastructure and community development practices of Stantec in Australia, where it is currently subscale, and adds a 115-person delivery center that should only grow in size in the Philippines.”

The duo also made these target changes:

  • Aecon Group Inc. (ARE-T, “outperform”) to $24 from $26. Average: $22.42.
  • Brookfield Renewable Partners LP (BEP-N/BEP.UN-T, “outperform”) to US$42 from US$44. Average: US$41.41.
  • IBI Group Inc. (IBG-T, “outperform”) to $17.50 from $15. Average: $16.63.
  • Richie Bros. Auctioneers (RBA-N/RBA-T, “market perform”) to US$60 from US$74. Average: US$69.43.
  • WSP Global Inc. (WSP-T, “outperform”) to $200 from $185. Average: $193.29.

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Scotia Capital analyst Tanya Jakusconek anticipates inflation will weigh on both the fourth-quarter 2021 and full-year 2022 results for North American senior gold producers.

Ahead of the start of earnings season, she’s projecting production to rise by an average of 2 per cent year-over-year for the group with unit costs increasing 2-3 per cent and capital spending jumping 18 per cent.

“Heading into Q4/21 reporting, we recommend NEM as it has pre-released 2022 and long term guidance,” she said. “GOLD (has not released 2022 or long-term guidance) is also recommended as it has several catalysts which could help the share price performance; announcement of a dividend framework and potential repatriation of capital (approximately $500-million) out of the DRC. The stock is up 3 per cent versus peers. In the mid tier, EGO and AUY have less risk than peers given both have pre-released various levels of guidance. Conversely, both AU and BVN have performed well lately and have downside risk on 2022 guidance; AU’s new CEO may release conservative guidance (albeit this could be somewhat offset if repatriation of capital occurs from DRC) and BVN on its operating issues. GFI will also be releasing guidance for the first time under the newish CEO; the operations have been performing relatively well, so we are less concerned about negative guidance surprises. Although we are positive on AEM, we are cautious going into year-end results as we believe the company will be conservative on its maiden post-merger guidance which may be viewed as disappointing versus street expectations. The stock has underperformed peers by 8 per cent since its Q3 reporting.”

Citing “its strong share price performance and relatively low return to target price,” Ms. Jakusconek lowered her rating for Newmont Corp. (NEM-N, NGT-T) to “sector perform” from “sector outperform” with a US$72 target, down from US$75. The average on the Street is US$65.92.

She also made these target changes:

  • Agnico Eagle Mines Ltd. (AEM-N/AEM-T, “sector outperform”) to US$79 from US$87. Average: US$75.65.
  • Yamana Gold Inc. (AUY-N/AUY-T, “sector perform”) to US$6 from US$6.25. Average: US$6.41.
  • Franco-Nevada Corp. (FNV-N/FNV-T, “sector perform”) to US$154 from US$157. Average: US$147.42.
  • Gold Fields Ltd. (GFI-N, “sector perform”) to US$12 from US$13. Average: US$12.23.
  • Barrick Gold Corp. (GOLD-N/ABX-T, “sector outperform”) to US$29 from US$35. Average: US$26.39.
  • Kinross Gold Corp. (KGC-N/K-T, “sector outperform”) to US$10 from US$12. Average: $9.29
  • Royal Gold Inc. (RGLD-Q, “sector perform”) to US$135 from US$148. Average: US$135.35.

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Canaccord Genuity analysts expect positive momentum to continue in the lithium market this year, fueling further gains for equity investors.

“2022 is shaping up to be a stand out year in the lithium market, hard pressed given 2021 delivered impressive price rises across carbonate (431 per cent), hydroxide (340 per cent) and spodumene (532 per cent),” the firm said. “However, after refreshing our SxD model for EV sales and lithium production we do not see an easy route for the market to balance throughout the year. This is being reflected in spot pricing recently pushing over US$50,000/t. We anticipate this pressure being maintained over at least the first six months of 2022 before additional supply reaches the market.

“Equities can keep going higher, but we are starting to look for opportunities. Lithium equities were strong performers in 2021, closing up on average up 200 per cent year-over-year. Into January the names continued to rally, following lithium pricing. We have upgraded our producer/near-term producers (NTP) 36 per cent on average and developers 24 per cent on average. Most equities are pricing in the recent moves with the producer/NTP trading at 0.82 times P/NAV on average, vs developers trading at 0.66 times P/NAV on average.”

In response to a recent share price retreat, analyst Katie Lachapelle raised Rock Tech Lithium Inc. (RCK-X) to “speculative buy” from “hold” with a $7 target, down from $7.50. The average on the Street is $6.53.

“We initiated coverage of Rock Tech in October 2021,” she said. “Since our launch, the company completed an engineering study on the construction and operation of its proposed lithium hydroxide converter in Germany. The study outlined an initial capital cost of €462 million for a 24kt per annum converter that is expected to produce lithium hydroxide at an average LOM operating cost of approximately US$8,427 per ton. A site has already been secured for the converter in Brandenburg Germany, a 90-minute drive from Tesla’s Berlin Gigafactory. The company’s long-term goal is to build and operate four of these conversion plants in Germany by 2030, to capitalize on booming EV sales in Europe. We view this buildout as ambitious, and only model one conversion plant at this time.

“Several project development milestones need to be achieved in 2022, to meet management’s projected timeline of first production in 2024. These include: a PreFeasibility Study (Q1 2022), awarding of an EPCM contract, ordering of long lead time items, a strategic partnership agreement (H1 2022), and a complete project financing package (H1 2022). To be conservative, our model continues to assume a one-year delay with first production in 2025.”

After the firm raised his commodity price deck, Ms. Lachapelle also made these target adjustments:

* Lithium Americas Corp. (LAC-T, “speculative buy”) to $54 from $46. The average is $45.24.

* Sigma Lithium Corp. (SGML-X, “speculative buy”) to $17 from $14. Average: $14.33.

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IA Capital Markets analyst George Topping expects Aldebaran Resources Inc.’s (ALDE-X) “senior sized” Altar copper project in Argentina will attract the interest of larger peers.

Seeing “strong” upside potential in the deposit’s size and resource multiple, he initiated coverage of the Vancouver-based company with a “buy” recommendation on Monday.

“Large copper deposits are scarce. While development of Altar is only likely in 2028, historically, such deposits are acquired well before construction. Argentina, having been ignored for better jurisdictions in South America, is now competitive fiscally and on resources,” he said.

“A conservative M&A resource multiple is ~US$0.04/lb, rising with copper prices (Exhibit 8). Additionally, we expect the size of the deposit to materially increase and the attractiveness to senior producers to grow, as the project is de-risked with drilling, technical reports, and permitting.”

Mr. Topping set a target of $2.50 per share, exceeding the current average of $1.35.

“Argentina, while still a higher tax jurisdiction, is absolutely improving but especially relative to other South American jurisdictions as they catch up,” he said. “We note mining is a focus of the government, which has a public goal to increase annual mining exports threefold to more than US$10-billion before 2030. The Lundin Group’s recent purchase of Josemaria (JOSE-T, Not Rated) for its Argentine deposit is an endorsement of mining in Argentina. This existing senior-sized resource with multiple satellite deposit discoveries shows the prospectivity of the area and suggests that we could see a central mill, very large scale, and long life, built by one of the top 5 mining companies.

“Copper-gold porphyries are highly desirable by copper, gold and conglomerate producers alike, particularly in established mining countries. Management has the prior track record to explore and advance Altar to feasibility study to garner a fair valuation.”

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In other analyst actions:

* Seeing “excess return potential,” Credit Suisse analyst Andrew Kuske upgraded Boralex Inc. (BLX-T) to “outperform” from “neutral” with a $45 target. The average on the Street is $46.67.

“Ahead of the Q4 results season, we revisit some of the key themes for the power/renewable sub-sector in our coverage universe,” he said. “From our perspective, the most significant issue facing this sub-sector is that of performance following a banner 2020 and an extremely lackluster 2021 – both absolute and relative. Clearly, market multiples for this sub-sector contracted and an array of idiosyncratic activities impacted stock and the overall performance. To us, the current malaise facing the sector looks to underappreciate certain renewable technologies like existing hydroelectric assets along with overstating the risks around return compression and supply chain problems.”

* Raymond James analyst David Quezada initiated coverage of Toronto-based Carbon Streaming Corp. (NETZ-NE) with a “strong buy” rating and $21 target.

“Our bullish outlook is predicated on 1) the company’s first mover status in the burgeoning voluntary carbon offset industry; 2) its large pipeline of high-return streaming investments; 3) our view of steadily rising carbon credit prices; 4) the company’s focus on high quality, premium-price carbon offset projects that offer meaningful environmental and social benefits; 5) a strong, experienced management team; and 6) substantial blue-sky upside driven by potential carbon credit price appreciation,” he said.

* M Partners analyst Nicholas Cortellucci initiated coverage of Deveron Corp. (FARM-X) with a “buy” rating and $1.50 target, exceeding the $1.20 average.

“We believe Deveron offers investors exposure to the early stages of a growth story with the potential to disrupt the heavily fragmented agriculture industry,” he said. “Over the last year, management has demonstrated a proven ability to execute an accretive and strategic roll-up strategy. We expect that over time Deveron’s business will transition into a recurring SaaS-like model, commanding a premium multiple with attractive margins and long-term growth.”

* BMO Nesbitt Burns analyst Andrew Mikitchook lowered Great Bear Resources Ltd. (GBR-X) to “market perform” from “outperform” with a $29 target, up from $23. The average is $29.29.

* BMO’s Peter Sklar lowered his ABC Technologies Holdings Inc. (ABCT-T) to $6.50 from $7, keeping a “market perform” rating. The average is $9.

* BMO’s Jackie Przybylowski cut her Kinross Gold Corp. (KGC-N, K-T) target to US$11.50 from US$12 with an “outperform” rating. The average is US$9.41.

* CIBC World Markets analyst Hamir Patel raised his target for Richelieu Hardware Ltd. (RCH-T) to $55 from $49, keeping a “neutral” rating. The average is $54.50.

* RBC Dominion Securities analyst Alexander Jackson cut his Russel Metals Inc. (RUS-T) target to $40 from $43 with an “outperform” recommendation. The average is $38.67.

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