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

Alongside its “attractive” relative valuation and return potential, RBC Dominion Securities analyst Greg Pardy believes Ovintiv Inc. (OVV-N, OVV-T) “possesses the capability and grit to maintain its capital discipline, operating efficiency — and strategic focus.”

Accordingly, in response to its “mixed” fourth-quarter results and 43-per-cent increase to its quarterly dividend, he raised his rating for its shares to “outperform” from “sector perform.”

“Under its formulaic returns model, the company pointed towards share buybacks of about $71 million in the first-quarter— but these should grow over time,” said Mr. Pardy. “Ovintiv indicated on its call that it has now satisfied all requirements for inclusion into the S&P400 or S&P500 Index (which would support passive inflows), but the selection process remains somewhat opaque.

“The company’s shareholder returns should rise as it executes a disciplined game plan to reduce its leverage via absolute debt reduction. We were impressed to hear the company push back on its conference call against suggestions to deviate from its debt reduction-before-big-returns game plan. The company fully appreciates the inherent risks associated with oil markets—and the necessity of a strong balance sheet to weather inevitable cyclical downturns. Ovintiv expects to achieve its $3.0 billion net debt target by the second half of 2022 (assuming $85 WTI and $4.50 NYMEX gas). Once the company reaches this level of net debt, it plans to increase quarterly shareholder returns to 50 per cent of the previous quarter’s free cash flow after base dividends.”

While Ovintiv, formerly Encana Corp., maintained its 2022 guidance, Mr. Pardy trimmed his 2022 and 2023 earnings and cash flow projections, believing “production growth is likely to be lumpy this year given its plan to drill longer lateral wells and level-load its completions activity — both aimed at containing inflationary forces.”

However, he raised his target for its shares to US$50 from US$47. The average target on the Street is currently US$51.59.

“Ovintiv is trading at a 2022 debt-adjusted cash flow multiple of 2.1 times and an elevated 39-per-cent free cash flow yield. We believe the company should trade at an average/modest discount to our peer group given its solid execution capability and strengthening balance sheet,” said Mr. Pardy.

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In a separate research report, Mr. Pardy said Enerplus Corp. (ERF-N, ERF-T) capped a “banner” 2021 with “impressive” fourth-quarter financial results.

“Enerplus remains our favorite intermediate producer given its consistently solid execution, balance sheet strength and bolstered scale in North Dakota post its two acquisitions last year,” he said.

On Feb. 24, the Calgary-based company reported net production of 102,800 barrels of oil equivalent per day, reaching the high end of its pre-released range. It also announced it has repurchased US$113.3-million of its common shares in the fourth quarter with a plan for a further US$100-million buyback by the end of July.

“Enerplus provided formal 2022 guidance alongside its year-end results in-line with its preliminary outlook,” said Mr. Pardy. “This outlook points toward mid-point production of 98,000 boe/d (including oil & liquids of 60,000 bbl/d) in the context of a $400 million ($370-$430 million) capital program. The company’s 2022 mid-point operating costs of $10/boe are up 15 per cent from $8.69/boe in 2021 in connection with contract price escalation, increased sales gas processing volumes and higher well-service activity. Enerplus also pointed towards $10-million of cash taxes payable in 2022 under its base outlook.”

Reaffirming his “outperform” rating, Mr. Pardy raised his target to US$16 from US$14.94. The average is $17.81 (Canadian).

Elsewhere, CIBC’s Jamie Kubik increased his target to $19 from $17 with an “outperformer” rating.

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BMO Nesbitt Burns analyst Devin Dodge thinks the pullback in shares of WSP Global Inc. (WSP-T) thus far in 2022 “presents an attractive entry point into one of the premier names within the engineering & design sector.”

Seeing its underlying fundamentals remaining “favourable across nearly all regions and end markets” and believing the risk to his estimates are weighted to the upside, he raised his rating for its shares to “outperform” from “market perform” on Monday.

“In our view, WSP is one of the strongest franchises in the global engineering & design sector and the combination of its improved margin profile, strong execution, extended track record for success in its M&A efforts and a well-respected management team supports an above-average multiple vs. peers,” said Mr. Dodge. “In early 2022, the rotation away from higher-multiple stocks has weighed on the share price performances across the sector, with WSP disproportionately impacted. WSP’s multiple premium has compressed to approximately one turn on forward P/E, or more than 2 turns below its three-year average.”

“Increased government spending on infrastructure development is a theme across nearly all developed economies and aligns well with WSP’s core transportation & infrastructure practice (50 per cent of revenues). Demand for environmental services is strong and the company is well-positioned to capture opportunities related to the energy transition and resource development. We also believe there are cross-selling opportunities from recent acquisitions that provide an upward bias to our revenue growth assumptions.”

Also touting potential margin upside and “substantial resources available to pursue growth opportunities,” Mr. Dodge cut his target to $172 from $188 and below the $194.71 average.

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Following Friday’s release of stronger-than-expected first-quarter results, a series of equity analysts on the Street raised their targets for shares of Canadian Imperial Bank of Commerce (CM-T).

CIBC and National Bank report soaring profits as revenues climb

Those making changes include:

* Desjardins Securities’ Doug Young to $169 from $162 with a “hold” rating. The average is $172.82.

“My oh my, what a wonderful quarter. Adjusted pre-tax, pre-provision (PTPP) earnings were above our forecast, it recorded positive operating leverage, which was contrary to earlier guidance, and management seems constructive on the near-term outlook,” said Mr. Young.

* Barclays’ John Aiken to $180 from $170 with an “equalweight” rating.

“We believe that the results in the quarter will bolster the near term outlook for CIBC and it should see a lift to its consensus estimates (our forecast for 2022 increased by over 5 per cent as a result of the quarter, although we were below consensus heading into the quarter). Management was confident on the call and we believe that momentum should continue and CM could see some relative multiple expansion,” said Mr. Aiken.

* Stifel’s Mike Rizvanovic to $174 from $172 with a “hold” rating.

“CM put up a solid quarter with pre-tax, pre-provision (PTPP) earnings exceeding expectations across the bank’s key businesses. And while that strength has been reflected in our forecasts, our EPS estimates have not changed materially (up 1 per cent in F2023) as we’ve moderated for both outsized results in Capital Markets and sizable gains on financial instruments that pushed up the Corporate segment, while also assuming a slightly higher, but still-low, PCL ratio on lower-than-expected recoveries. As such, we maintain our Hold rating on the shares,” he said.

* Scotia’s Meny Grauman to $184 from $182 with a “sector outperform” rating.

“The bottom line is that CIBC has successfully accelerated its revenue growth, and we expect that growth to remain strong even if trading falls back down to more sustainable levels,” he said. “That revenue demonstrates growth in and of itself, but will also help deliver positive operating even as CIBC accelerates needed investments. In fact, we saw the impact of that this quarter as operating leverage was a modest positive despite 10-per-cent year-over-year expense growth.”

* BMO’s Sohrab Movahedi to $170 from $165 with an “outperform” rating.

“We see CM as a ‘self-help’ story over the next year given its focus on maximizing returns from organic operations. The total return potential is driven by momentum in domestic operations and lower inorganic growth focus; valuation offers downside protection,” said Mr. Movahedi.

* Canaccord Genuity’s Scott Chan to $178 from $173 with a “buy” rating.

* TD Securities’ Mario Mendonca to $185 from $180 with a “buy” rating.

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Seeing improving fundamentals, TD Securities analyst Graham Ryding upgraded Fiera Capital Corp. (FSZ-T) to a “buy” rating from “hold.”

“Management deserves credit for strong execution, in our view,” he said. “Very strong earnings, fueled by healthy performance fees, illustrate the earnings potential of the platform. Margins have clearly improved, even after adjusting for performance fees. Leverage has come down materially. While flows remain soft, fund performance is very solid overall, which suggests to us good potential that flows should ultimately turn positive. Private-markets AUM continues to drive flows and strong revenue growth. Lastly, the dividend is sustainable, in our view, and represents a compelling 8.3-per-cent yield. We believe valuation at 6.9x 2022 adjusted EBITDA does not properly reflect the strong fundamentals.”

His target increased to $12, matching the consensus, from $11.

Elsewhere, Barclays’ John Aiken raised his target to $11 from $10 with an “equalweight” rating.

“While Fiera’s flows have exhibited greater volatility and have lagged the other asset managers we cover, over the long term, we remain of the view that Fiera’s AUM should perform relatively better both a performance and organic growth perspective, given the limited exposure to the retail segment and growing exposure to the alternatives space and its private markets platform. Coming out of the quarter we have increased our price target to $11.00, reflecting an increase in our estimates driven by better flow and AUM performance, as well as Fiera’s increasing allocation to private markets,” said Mr. Aiken.

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While the benefits it has enjoyed from a rising mortality rate brought on by the COVID-19 pandemic are “receding,” National Bank Financial analyst Zachary Evershed expects Park Lawn Corp. (PLC-T) to continue to see market share gains.

Ahead of the release of its fourth-quarter 2021 results on Thursday, he raised his 2022 estimates for the Toronto-based funeral, cremation and cemetery provider, believing it took advantage of the inability of smaller operators to provide the required at-need services during the pandemic.

“Park Lawn (and other larger operators) was able to redirect traffic from closed locations to other businesses within its network, whereas single-location businesses were forced to turn families away,” said Mr. Evershed. “Relationships with families tend to be sticky, moving down from generation to generation, and so we expect the market share gains should continue to pay dividends over the long term. While a pull forward in volumes remains a point of concern, we believe the potential market share gains, as well as improving pricing, will provide a strong offset.”

For the quarter, he’s forecasting total revenue of $103.7-million, up 14.7 per cent year-over-year and above the consensus estimate on the Street of $100.6-milion. His adjusted earnings per share projection of 39 cents is an increase of 10.3 per cent and also tops the consensus (35 cents).

“Both main public peers reported respectable organic growth numbers in the fourth quarter despite C-19 deaths declining 24.9 per cent year-over-year in the U.S. in Q4, and a simple adjustment of each company’s segmented comparable growth to match PLC’s funeral home and cemetery breakdown might suggest the company is on track for 7-per-cent organic growth in the fourth quarter,” he said. " However, when weighted for Park Lawn’s geographic presence (as measured by the number of cemeteries, funeral homes, or both in a State), our analysis indicates that the year-over-year decline in COVID-19 deaths addressable by the company is 50 per cent greater than in the country as a whole. We therefore reduce our organic growth forecast to 1.4 per cent in Q4, down from our previous call, but still bullish vs. the Street.”

Emphasizing “size matters,” Mr. Evershed raised his target for Park Lawn shares by $1 to $45.50, keeping an “outperform” recommendation. The average on the Street is $46.92.

“Looking ahead, a common concern remains the potential pull-forward effect on deaths as we model 2022 and 2023,” he said. “We believe a degree of caution is warranted, but highlight the importance of pricing gains as the industry laps the difficult volume comp period. We also believe PLC should continue gaining market share, won from smaller competitors that were unable to provide sufficient service levels during the pandemic. By contrast, Park Lawn was able to flex its robust footprint, referring inquiries to other location and keeping the sale. This will likely have non-negligible impacts down the line, as death care business is often sticky within a family.”

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Following its fourth-quarter results, TD Securities analyst Sam Damiani upgraded Crombie REIT (CRR.UN-T) to “buy” from “hold,” believing its net asset value growth is not reflected in its current valuation.

“Development execution on Crombie’s first five major development projects has been strong, with yields being accretive and generally meeting or exceeding expectations,” he said. “This has helped Crombie achieve the highest NAV growth (highest three-, five-, and 10-year CAGRs) versus all larger-cap retail REIT peers.

“Crombie’s pool of 29 identified candidate properties for redevelopment offer strong visibility into future value-creation opportunities. This pipeline stands out with unusually high concentration in the high-growth Vancouver market (almost 50 per cent by estimated value of buildable density).”

His target for Crombie units rose to $20, matching the consensus, from $19.50.

“Crombie offers investors an attractive combination of stable and secure cash flows from Sobeys-anchored, necessity-based retail and industrial properties, with additional growth from a robust development pipeline,” Mr. Damiani said.

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After better-than-anticipated fourth-quarter financial results, National Bank Financial analyst Patrick Kenny sees Pembina Pipeline Corp. (PPL-T) “back on track.”

On Feb. 24 after the bell, the Calgary-based company reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $970-million, above both Mr. Kenny’s $929-million estimate and the consensus projection of $903-million. Driven by “stronger” contributions from its Marketing segment, its full-year 2021 adjusted EBITDA came in at $3.433-billion, topping the high end of its guidance range of $3.3-$3.4-billion.

“PPL’s $530-million growth capital budget for 2022 remains in check, while the company expects to make several final investment decisions in H1/22, including the less than $500-million Peace Pipeline Phase VIII expansion, the 200 mmcf/d Hythe Deep Cut facility and the 20 mbpd Prince Rupert Terminal expansion,” the analyst said. “Meanwhile, PPL continues to progress its energy transition initiatives, including submitting the application for Cedar LNG’s Environmental Assessment Certificate as well as submitting a carbon sequestration proposal with partner, TC Energy, to jointly develop the more than 20 MtCO2pa Alberta Carbon Grid. Elsewhere, management confirmed its strategic interest in the Trans Mountain Pipeline, while acknowledging significant TMX cost overruns as challenging the commercial viability of the ownership opportunity.”

“With commodity price tailwinds supporting throughput upside, coupled with Marketing essentially back to pre-pandemic performance of more than $400-million per year, our 2022 EBITDA of $3.6-billiob comes in above the company’s unchanged guidance range of $3.35-$3.55-billion, while our 2023e AFFO [adjusted funds from operations] per share moves up to $4.35 (was $4.23), with D/EBITDA tapping down to 3.5 times (was 3.7 times).”

Pointing to increased certainty surrounding its strategic direction following the official appointment of Scott Burrows as President & CEO, Mr. Kenny raised his target for Pembina shares to $44 from $42, keeping a “sector perform” recommendation. The average is $44.68.

“After fumbling the CEO transition messaging late last year, we welcome the Board’s prompt decision to officially appoint Scott Burrows as President & CEO, reaffirming the company’s strategic direction,” he said. “Overall, our target moves up $2 to $44, and we maintain our SP rating based on a 12-month total return opportunity of 9.6 per cent, while highlighting approximately 20-per-cent valuation upside related to a more than $5-billion backlog of unsecured growth opportunities.”

Elsewhere, CIBC’s Robert Catellier raised his target to $45 from $44 with a “neutral” rating, while TD Securities’ Linda Ezergailis also raised her target by $1 to $45 with a “buy” recommendation.

“PPL’s commitment to executing on its espoused strategy within its financial guardrails during its senior-leadership transition is foundational to our thesis on the stock. We also continue to view PPL’s operations as well-positioned to benefit from industry tailwinds, including capturing growing volumes in WCSB, as well as likely providing opportunities to invest in value-chain extension and expansions into new markets. We believe that PPL’s proposed market access and carbon-storage initiatives demonstrate the company’s ability to pivot towards a lower-carbon-energy future,” said Ms. Ezergailis.

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With its sales, delivery and installation cycle taking longer than he anticipated, Stifel analyst Ian Gillies downgraded Legend Power Systems Inc. (LPS-X) to “hold” from “speculative buy.”

“We have shifted our revenue assumptions to the right by 9-months,” he said. “When we originally initiated on LPS in April 2021, we had expected revenue of $25-million in calendar 2022, whereas our current forecast is now $9-million while our calendar 2023 forecast is now $35-million. The company is indicating that the time of order from an Insight being completed is 12-months, with an additional 6-9 months for installation. Previously, we had thought the timeframe would be 9-12 months from an Insight being complete to an order being installed.”

Citing that revenue reduction, Mr. Gillies, currently the lone analyst covering the the Burnaby, B.C.-based company, cut his target for its shares to 45 cents from 85 cents.

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In other analyst actions:

* TD Securities analyst Aaron Bilkoski raised his target for shares of Advantage Energy Ltd. (AAV-T) to $10.50 from $10, keeping a “buy” rating, while Stifel’s Robert Fitzmartyn trimmed his target to $8.25 from $9.50 with a “buy” rating. The average on the Street is $9.62.

“Summary Advantage year-end results tracked our estimates, though market reaction was decidedly positive which we attribute to brief allusion to heightened shareholder returns with a share buyback program commencing 2Q22 as our forecast into 2022/2023 is largely unchanged on the receipt of this print,” said Mr. Fitzmartyn.”

“Within its E&P business, Advantage Energy represents an effective pure-play on Montney development with a diversified prospect suite amenable to natural gas, condensate, and/or light crude oil prospectivity. It retains a low-cost structure principally founded on its majority owned and operated Glacier gas plant allowing for lower operational and financial risk in its business plan comparatively across its peer group.”

* CIBC World Markets analyst Anita Soni raised her Agnico Eagle Mines Ltd. (AEM-N, AEM-T) target to US$67 from US$66 with an “outperformer” rating, while JP Morgan’s Tyler Langton cut his target to US$62 from US$66 with a “neutral” rating and Stifel’s Ingrid Rico cut her target to $100 from $115.75 with a “buy” rating. The average is US$72.26.

“AEM reported Q4 / full-year results with 2021 achieving production guidance but coming in higher on costs. That said, front and center in this quarterly update was the first official guidance / outlook post-merger with Kirkland Lake. Overall the initial take on 2022 guidance was production somewhat below expectations and higher than expected cost. That said, this now sets a baseline for production to grow over the mid-to-long term and costs to improve from expected value-driver synergies. We don’t lose sight of what the merger has created by building on strengths and anchoring production in premier jurisdictions. New Agnico now has a combined footprint in Canada that is expected to produce between 2.5-2.7Moz over that next three years (75-80 per cent of total production),” said Ms. Rico.

* CIBC’s Scott Fletcher cut his target for Altus Group Ltd. (AIF-T) to $50 from $73, below the $67.50 average, with a “neutral” rating.

* Canaccord Genuity analyst Mark Rothschild raised his Boardwalk Real Estate Investment Trust (BEI.UN-T) target to $62.50 from $58 with a “hold” rating. Others making changes include: National Bank’s Matt Kornack to $67 from $65.60 with an “outperform” rating; RBC’s Jimmy Shan to $69 from $63 with an “outperform” rating and CIBC’s Dean Wilkinson to $61 from $57 with a “neutral” rating. The average is $62.09.

* Following “a solid end to a choppy year,” National Bank Financial’s Matt Kornack raised his target for BTB Real Estate Investment Trust (BTB.UN-T) units to $4.75 from $4.50, above the $4.51 average on the Street, with a “sector perform” rating.

“2021 saw a bit of volatility around the timing of leasing of vacant space and a more activity transaction pipeline. We will need a few more quarters to fully understand operational run-rates,” he said.

* National Bank Financial’s Gabriel Dechaine raised his Canadian Western Bank (CWB-T) target to $44 from $43 with a “sector perform” rating. Other changes include: Raymond James’ Stephen Boland to $43 from $41 with an “outperform” rating; Barclays’ John Aiken to $44 from $43 with an “overweight” rating.; Desjardins’ Doug Young to $45 from $44 with a “buy” rating and BMO’s Sohrab Movahedi to $42.50 from $42 with an “outperform” recommendation. The average is $44.04.

* CIBC World Markets’ Hamir Patel cut his CCL Industries Inc. (CCL.B-T) target to $78, below the $80.13 average, from $80 with an “outperformer” rating. Others making adjustments include: Raymond James’ Michael Glen to $79 from $81 with an “outperform” rating; BMO’s Stephen MacLeod to $80 from $83 with an “outperform” rating and Scotia’s Mark Neville to $79 from $82 with a “sector outperform” rating.

“CL reported in-line Q4 results, with strong revenue growth offset by inflationary pressures,” said Mr. MacLeod. “Concerns about inflationary pressures lingering into Q1 (and potentially Q2) weighed on the stock. These headwinds are reflected in our revised estimates and CCL is managing through inflation with price increases, overshadowing underlying demand. We see attractive risk-reward in the stock, trading at 8.6 times 2023 estimated EV/EBITDA, compared to the peer group average (9.7 times) and long-term NTM [next 12-month] average (7.8 times). We view CCL as a best-in-class packaging company and maintain our Outperform rating.”

* Scotia’s Konark Gupta reduced his Exchange Income Corp. (EIF-T) target to $47 from $48, below the $51.82 average, with a “sector perform” rating.

“Q4 results missed our expectations (beat consensus) due to the impact of Omicron in the latter part of the quarter. Management cautioned that weakness is expected to persist into Q1, which is typically the seasonally weakest quarter for EIF while government subsidies are also declining. However, it remains confident that EBITDA run-rate will hit $400-million by the end of 2022 as recovery largely continues despite near-term volatility. We have materially reduced our Q1 and 2022 estimates while also trimming our 2023 estimates (introducing 2024E). We note our estimates don’t reflect potential acquisitions, so there could be some upside risk,” said Mr. Gupta.

* CIBC’s Scott Fromson increased his target for Extendicare Inc. (EXE-T) to $8.50 from $8.25, below the $8.15 average, with a “neutral” rating.

* RBC’s Irene Nattel raised his George Weston Ltd. (WN-T) target to $165 from $162, keeping an “outperform” recommendation. The average is $162.57.

“Our constructive outlook on WN is predicated on our favourable outlook for more than 50-per-cent owned Loblaw (L-T) augmented by the application of a portion of proceeds from the sale of WN Foods via the NCIB, over time,” she said.

* Scotia’s Orest Wowkodaw lowered his Hudbay Minerals Inc. (HBM-T) target by $1 to $11.50 with a “sector outperform” rating. The average is $13.26.

“HBM reported in-line Q4/21 results. More important, the company released a weaker than anticipated three-year guidance outlook, particularly with respect to 2022 opex and capex. Overall, we view the update as negative for the shares given our reduced estimates and a slower anticipated deleveraging process ahead,” said Mr. Wowkodaw.

“Despite the Peru overhang, we rate HBM shares SO based on an attractive valuation, significant leverage to higher Cu-Au prices, and several likely catalysts on the horizon.”

* Canaccord Genuity’s Tania Gonsalves reduced her Jamieson Wellness Inc. (JWEL-T) target to $45.75 from $46.25, remaining above the $42.55 average, with a “buy” rating.

“Make no mistake, our estimates have gone up, and we believe the outlook remains bullish. The reduced price target is simply a reflection of broad multiple contraction across the markets in recent weeks. With an implied over 40-per-cent upside potential from [Thursday’s] close, we reiterate our BUY rating,” she said.

* BMO’s Thanos Moschopoulos cut his Kinaxis Inc. (KXS-T) target to $200 from $230 with an “outperform” rating. The average is $223.

“We remain Outperform on KXS ahead of Q4/21 results, based on our view that KXS continues to benefit from a strong competitive position and a robust demand environment,” he said. “We expect solid Q4/21 results and FY2022 SaaS revenue guidance, although we think that margin guidance might come in slightly below consensus (but believe that investors will place greater focus on the acceleration in KXS’ revenue trajectory). We maintain our estimates, but have reduced our target price to reflect recent multiple compression across the tech sector.”

* Deshardins Securities’ Benoit Poirier cut his target for The Lion Electric Company (LEV-N, LEV-T) to US$18 from US$24 with a “buy” rating to “reflect reduced valuations in the EV industry,”while Raymond James’ Michael Glen slashed his target to $11 from $17 with a “market perform” rating. The average is US$13.

“We were pleased with the sequential improvement in vehicle deliveries reported in 4Q despite ongoing supply chain disruptions,” he said. “We continue to believe that important capacity expansion projects planned for 2022 will enable Lion to solidify its position in the growing medium- and heavy-duty truck market.”

“Management’s proactive approach toward resolving supply chain issues, combined with the progress made on capacity expansion projects and the commercial success of the school bus venture, support our long-term bullish stance on the company.”

* RBC’s Pammi Bir lowered his target for Morguard Real Estate Investment Trust (MRT.UN-T) to $6 from $6.50, below the $6.06 average, with a “sector perform” recommendation.

“No change to our thesis post Q4 results that were largely in-line with our call. Notably, operating metrics, including occupancy and organic growth, continue to move in the right direction. As well, MRT has made good progress on addressing the substantial 2022 lease expiries. However, in light of its significant exposure to enclosed malls and potential pressures ahead in the office portfolio, we’ve maintained our call for a moderate, gradual recovery. Coupled with work still to do on the balance sheet, we see valuation as reasonable,” he said.

* Canaccord Genuity’s Scott Chan bumped up his National Bank of Canada (NA-T) target by $1 to $110 with a “hold” rating. Others making changes include: Barclays’ John Aiken to $107 from $101 with an “underweight” rating; BMO’s Sohrab Movahedi to $108 from $104 with an “outperform” rating; Desjardins’ Doug Young to $109 from $106 with a “hold” recommendation and Stifel’s Mike Rizvanovic hiked his target to $118 from $116 with a “buy” rating. The average is $109.64.

“Pre-tax, pre-provision (PTPP) earnings were 13 per cent above our estimate if we exclude an unusual item; however, this was driven by exceptionally strong equity trading revenue, which had a big positive impact on capital markets results. The million-dollar question being: is this sustainable? Tough to say, but we know capital markets results can bounce around,” said Mr. Young.

* CIBC’s Mark Jarvi raised his target for Northland Power Inc. (NPI-T) to $43 from $42 with an “outperformer” rating. The average is $45.40.

* Piper Sandler analyst Charles Neivert raised his Nutrien Ltd. (NTR-N, NTR-T) target to US$87 from US$80 with a “neutral” rating. The average is US$86.54.

“NTR will benefit from tailwinds in potash and nitrogen markets in 2022 as well as strong ag retail conditions and increasing volumes of in-house ag products. The company has also committed to significant share repurchases in 2022, which could, if fully realized reach $4-billion. We are estimating $2.9-billion for 2022 repurchases,” he said.

* Canaccord Genuity’s Scott Chan raised his target for Onex Corp. (ONEX-T) to $118 from $104 with a “buy” rating, while CIBC’s Nik Priebe lowered his target to $100 from $110, below the $118 average, with a “neutral” rating and Scotia’s Phil Hardie reduced his target to $118 from $121 with a “sector outperform” recommendation.

“Onex is our 3rd best idea within our coverage universe. Onex continues to deliver very good results with Hard NAV growth 20 per cent year-over-year in Q4/21, yet the shares are mispriced, trading at a 24-per-cent discount to NAV when we think the shares should trade at or a premium to NAV (18-per-cent discount to Hard NAV, which assumes zero value for the asset manager, carried interest and Gluskin Sheff). 2022 is shaping up to be a very active year of fundraising, which should give greater visibility on Fee Related Earnings growth and likely be a positive catalyst for the stock. Furthermore, we think portfolio health is very strong with many investments appearing to perform really well coupled with an absence of large investments that are underperforming,” said Mr. Kwan.

* In response to its acquisition of Les Franchises Chico Inc., Stifel’s Martin Landry raised his Pet Valu Holdings Ltd. (PET-T) target to $44 from $42 with a “buy” rating. The average is $40.

“The purchase price was not disclosed, but Chico generated system-wide sales of $79-million, which represent an increase of 8 per cent over Pet Valu’s system-wide sales of roughly $1-billion for 2021,” he said. “We model an EPS accretion of 6 per cent on our 2023 EPS estimate, assuming that Pet Valu will be able to generate wholesale revenues by suppling Chico with most of it merchandise. We view the expansion positively as it provides the company with an incremental vector of growth, given our belief that there is ample growth opportunity for the Chico network in Quebec.”

* CIBC’s Sumayya Syed lowered her Plaza Retail Real Estate Investment Trust (PLZ.UN-T) target to $5 from $4.75,, below the $4.93 average, with a “neutral” rating.

* Canaccord Genuity’s Christopher Koutsikaloudis bumped up his Sienna Senior Living Inc. (SIA-T) target to $16.50 from $16.25 with a “buy” rating. The average is $16.65.

“Sienna Senior Living Inc. (Sienna) reported quarterly results which were in line with consensus and reflected a steady improvement in operating performance over the past year, as well as lower pandemic-related expenses,” he said. “Since bottoming in May 2021, average same-property occupancy for Sienna’s retirement portfolio has increased by 710 basis points and stood at 85.9 per cent as of January 2022. Further, management reiterated its guidance for retirement occupancy to reach 87 per cent to 89 per cent by year-end and our current estimates assume average occupancy of 86 per cent in Q4/22. With seniors housing fundamentals improving, Sienna has undertaken a number of steps focused on both growing and high grading its portfolio.”

“Combined with steady rent increases, higher occupancy levels should support healthy cash flow growth from Sienna over the next few years, more than offsetting the negative impact of higher operating expenses.”

* CIBC’s Scott Fromson cut his Slate Office Real Estate Investment Trust (SOT.UN-T) target to $5.75 from $6. The average is $5.52.

* RBC’s Geoffrey Kwan cut his target for Sprott Inc. (SII-T) to $61, remaining above the $58 average, from $64 with a “sector perform” rating.

“Sprott delivered strong results for the Christmas Q4/21 quarter, including another strong quarter from its Physical “U”ranium Trust, which has generated US$1-billion in net sales in H2/21 and now has US$2-billion in AUM [assets under management],” he said. “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.”

* Scotia’s Himanshu Gupta raised his StorageVault Canada Inc. (SVI-T) target to $7.50 from $7.25 with a “sector outperform” rating. The average is $7.82.

“Quarter after quarter, year after year, SVI has consistently printed growth quarters. 2021 was a monster growth year (even by SVI standards) as SS NOI [same-store net operating income] grew 20 per cent year-over-year and FFOPS [funds from operations per share] grew 44 per cent year-over-year,” said Mr. Gupta. ”Just to put the growth in context, a typical REIT in an average year delivers 2-per-cent SS NOI growth and 5 to 6 per cent year-over-year FFOPS growth. The outsized growth profile has been rewarded by the market as well, as SVI stock was up 79 per cent in 2021 (vs REIT sector up 35 per cent), and was the best performing real estate security last year.”

* CIBC’s Mark Jarvi cut his Transalta Renewables Inc. (RNW-T) target to $19 from $19.50, maintaining a “neutral” rating. The average is $18.92.

* Scotia’s Jason Bouvier hiked his Vermilion Energy Inc. (VET-T) target to $25 from $20, keeping a “sector perform” rating. The average is $22.03.

“With European gas prices at C$30+/mcf, VET is awash in FCF. The company is paying down debt at an accelerated rate and has also re-instated a base dividend. When Corrib closes (expect in H2/22) the company will be producing over 90 mboe/d. Future growth is expected from Europe and the Powder River Basin. As a result of continued robust European gas prices we are increasing our TP,” he said.

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