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

RBC Dominion Securities’ Joseph Spak sees “decent support” for shares of Magna International Inc. (MGA-N, MG-T) at current levels.

However, he was one of several equity analysts on the Street to cut their targets for the Aurora, Ont.-based auto parts manufacturer following a reduction to its 2022 guidance, which sent TSX-listed shares down 3.3 on Friday.

“Q22 beat but outlook cut by about the same level as stock down since prior guide, so we believe mostly reflected in stock,” said Mr. Spak.

Citing the impact of the idling of its Russian operations as well as COVID lockdowns in China, Magna now expects sales to total between US$37.3-billion and US$38.9-billion, down from an earlier forecast of between US$38.8-billion and US$40.4-billion.

That new view came with the release of better-than-anticipated second-quarter results, which saw organic sales decline by only 2 per cent (versus Mr. Spak’s expectation of an 8-per-cent drop).

“Overall, a lower outlook was expected but margins more impacted than we originally thought on higher inflationary costs (energy over half the increase),” he said.

“Cost pressure more acute in 2Q22 due to timing of increases. Some year-over-year lapping effect in 2H22 so we think margins improve in 2H22. MGA indicated that there are ongoing discussions with OEMs to reap recoveries, though it appears this may be going slower at MGA than some other suppliers. Meanwhile, for future programs, MGA quoting to reflect the new economics and also working on other ways to de-risk further including more indexing and hedging.”

After cutting his full-year 2022, 2023 and 2024 EPS estimates to US$4.95, US$7.11 and US$8.10, respectively, from US$5.60, US$7.70 and US$8.70, Mr. Spak reduced his target for Magna shares to US$79 from US$85, keeping an “outperform” rating. The average on the Street is US$87.86.

Others making changes include:

* Citi’s Italy Michaeli to US$77 from US$81 with a “buy” rating.

“Looking ahead, we think the big picture story remains intact while the implied flattish Q2-Q4 margin guide (vs. Q1) suggests some conservatism. We also note that the company is hosting an Investor Day on May 10th, which could help refocus the story on secular upside levers. Though we’ve been more cautious on tier-1 suppliers as of late, we continue to like the risk/reward in Magna shares on future EPS power (more than $8 in 2024) and EV/AV upside optionality,” he said.

* Scotia Capital’s Mark Neville to US$85 from US$90 with a “sector outperform” rating.

“In our view, the muted share price reaction to an 20-per-cent reduction to adj. EBIT/NI guidance speaks to a few things: (i.) a large cut was expected, (ii.) valuation on revised numbers is undemanding (i.e., 13.5 times P/E at the mid-point of revised guidance), and (iii.) macro issues, not fundamentals, are the primary driver of share price performance at the moment,” he said.

* CIBC’s Krista Friesen to US$84 from US$92 with an “outperformer” rating.

“While we believe that the guidance revision was better than feared, we appreciate that there is still uncertainty in the market around inflation and the impacts from the war in Ukraine. With that said, we do see a path towards earnings growth. With incremental margins in the low 20-per-cent range, and our belief that the underlying demand for autos remains solid, we suspect that MGA will be able to post earnings growth despite the headwinds facing the auto industry,” she said.

* Credit Suisse’s Daniel Galves to US$78 from US$82 with an “outperform” rating.

* Wells Fargo’s Richard Kwas to US$72 from US$82 with an “overweight” rating.


Following recent share price depreciation, Desjardins Securities’ Benoit Poirier sees “a compelling proposition at current levels” for TFI International Inc. (TFII-N, TFII-T), believing investors are not paying for potential upside.

He was one of a group of equity analysts on the Street to reduced their target prices for shares of the Saint-Laurent, Que.-based transportation and logistics company following last Thursday’s release of better-than-expected quarterly results, due largely to concerns about valuation multiples in the trucking sector.

“We are very pleased with TFII’s 1Q results, which showed once again that TFII is ideally positioned to unlock shareholder value,” said Mr. Poirier. “We do not see enough signs to call for a freight market bloodbath, and in the event of a slowdown, TFII’s robust diversified business segments across two countries should provide extra protection.”

TFI reported fully diluted earnings per share of US$1.68, topping both Mr. Poirier’s estimate of US$1.20 and the consensus projection of US$1.29. It also raised its full-year 2022 EPS guidance to US$6.50–6.75 from US$6.25– 6.50, which Mr. Poirier called a “conservative target.”

“We expect some positive revisions through the rest of 2022 as TFII delivers on the multiple value creation opportunities that are mostly independent of market conditions,” he said.

Despite a “fall” in spot rate and rise in fuel costs, the analyst sees TFII as “well-protected,” noting: “While the market has reacted negatively, it is important to note that TFII’s U.S. truckload business is 85–90-per-cent contractual and represents less than 10 per cent of its total revenue. CEO Alain Bédard stated that contract rates are still strong and he believes smaller trucking companies will be hit much harder if a slowdown does occur.”

Reiterating his bullish stance and reaffirming TFII as his “preferred transportation stock for 2022,” Mr. Poirier reduced his target to $170 from $173 with a “buy” rating, despite raising his 2022 and 2023 EPS estimates. The average is $142.14

“We continue to see significant upside potential at TFII as it successfully executes on the optimization of TForce Freight while remaining active with its M&A strategy,” he said.

Others analyst making target reductions include:

* Scotia Capital’s Konark Gupta to $138 from $135 with a “sector outperform” rating.

“TFII posted a significant Q1 beat and raised guidance while maintaining a conservative tone,” he said. “The quarter was helped by a gain in the TL segment, which could continue in Q2, but it doesn’t take away the fact that TFII produced better-than-expected results across all segments, led by LTL, as solid margin execution continues. Management acknowledged concerns about falling TL spot rates but reminded that TFII is exposed to the contract market with 1,300 dedicated trucks in the U.S. Further, more than 70 per cent of its book is represented by non-TL segments which are less cyclical, and the largest segment (LTL at 45 per cent) is just scratching the surface on margin and growth. In addition, TFII is growing more active on tuck-ins and buybacks, and remains focused on its next big M&A target. We have moved our 2022E EPS up to the top end of the new guidance range, which could still prove conservative.”

* National Bank’s Cameron Doerksen to $146 from $142 with an “outperform” rating.

“We continue to see solid earnings growth for the company, even if a softer freight demand environment materializes. Valuation also remains attractive,” he said.

* CIBC’s Kevin Chiang to US$110 from US$115 with an “outperformer” rating.

“For TFII, it feels like a ‘Heads I Lose, Tails You Win’ situation. Despite beating expectations and raising its 2022 EPS guidance, concerns over a freight bloodbath continue to weigh on its shares. Falling U.S. spot TL rates and slowing consumer spending are signs the freight cycle is past its peak. That said, we continue to argue that TFII’s earnings growth levers remain intact and are less dependent on the marginal change in freight volumes and pricing,” said Mr. Chiang.

* JP Morgan’s Brian Ossenbeck to US$101 from US$112 with an “overweight” rating.

Conversely, RBC’s Walter Spracklin increased his target to US$100 from US$97 with an “outperform” rating.

“TFII continued to exceed expectations with another (very)strong performance delivered in Q1 - despite the challenging operating conditions that typically occur in that quarter,” said Mr. Spracklin. “Guidance was raised again - only a quarter after having set it - and we believe that guidance to be conservative (we have brought our estimates to the high end of the range). Further, the company’s strong FCF (more than $700-milion guided) and clean balance sheet (less than 1.5 times leverage guided) provides the company tremendous optionality between ramping up M&A and buying back stock (likely see both this year). TFII remains a top idea.”


While he sees Air Canada (AC-T) on track for a “solid” operational recovery, Citi analyst Stephen Trent warned it “seems poised to continue undershooting the results of its U.S. peers.’”

“We take an optimistic view on Air Canada’s expected improvements and long-term recovery,” he said in a note released Monday. “However, the carrier’s U.S. peers still look poised for stronger, more rapid recoveries. With the likes of Delta and United calling for 2Q’22 EBIT margins of ca. 12 per cent to 14 per cent and 10 per cent, respectively, Air Canada is guiding to full-year adjusted EBITDA margins of just 8 per cent to 11 per cent. Citi’s estimated 2022 EBITDA and EBIT margins for Air Canada are 10 per cent and 0.5 per cent, respectively.”

After incorporating stronger-than-expected unit revenue, higher fuel prices and its first-quarter results into his financial model, Mr. Trent cut his 2022 earnings per share projection to a loss of $2.14 from a loss of $1.59 previously. His 2023 and 2024 estimates increased to profits of $2.06 and $5.71, respectively, from $1.90 and $5.12.

“The shares also seem to have scarcity value, in light of the carrier’s position as Canada’s sole network airline. However, these factors appear to be at least partially priced in,” he said.

Keeping a “neutral” rating, Mr. Trent increased his target by $1 to $25.50. The average is $29.87.

“We rate AC at Neutral primarily on uncertain short-medium term profitability due to severely depressed passenger volumes stemming from COVID-19 and the related government restrictions on travel from some of its key neighboring nations,” he said. “Valuation looks full, in our view, relative to recent historical trading levels and compared to its large U.S. network carrier peers. Given the higher uncertainty in North American aviation markets, we prefer to have more earnings visibility before getting more aggressive with Air Canada shares.”


Despite trimming his financial forecast for TC Energy Corp. (TRP-T) in reaction to its first-quarter earnings report, iA Capital Markets analyst Matthew Weekes emphasized its core business fundamentals remain solid, pointing to a “constructive growth outlook, dominant footprint to serve growing North American natural gas demand, and low-risk commercial underpinnings.”

Shares of the Calgary-based company fell 5.2 per cent on Friday following the premarket release as comparable earnings before interest, taxes, depreciation and amortization of $2.39-billion fell short of the forecast of both Mr. Weekes ($2.44-billion) and the Street ($2.46-billion). Comparable earnings per share and funds flow fell in line with expectations.

Mr. Weekes attributed the miss to “unfavourable” market conditions and volatility.

“Lower EBITDA in Canadian Gas Pipelines reflects lower flow-through depreciation and tax expenses, while earnings from the core NGTL system grew with capital growth,” he said. “Liquids Pipelines experienced unfavourable marketing margins and negative impacts on risk management activities, while weakness was also experienced from lower gas storage spreads and trading contribution in Canadian Power. Looking past these factors, demand within the core business was strong and U.S. Gas Pipelines EBITDA was ahead of our forecast, benefitting from growth projects, strong throughput, and higher rates at Columbia Gas.

“TRP remains confident in its expectation for modestly higher comparable EBITDA year-over-year and fairly consistent comparable EPS. Commentary on the call indicated that certain unfavourable factors experienced n Q1/22 will likely improve as the year progresses.”

Mr. Weekes thinks core infrastructure demand, which reinforces most of the company’s business, remains “solid,” and sees TC Energy continuing to “execute on its strategy through $1.7-billion of capital investment and development of new opportunities.”

“New developments include (a) recent approval from FERC for three new expansion projects to serve LNG demand-pull in the U.S., (b) Bruce Power received verification of final cost and schedule for the Unit 3 MCR from the Ontario IESO, clearing the path for power price increase, (c) contracts finalized for 400MW of wind and solar projects as part of TRP’s renewable self-power initiatives, and (4) plans announced to evaluate a hydrogen production hub in Alberta,” he said. “TRP also continues to execute on its portfolio of secured projects, and noted on the call that CAPEX inflation is recoverable for the vast majority of projects.”

Maintaining a “buy” rating for TC Energy shares, Mr. Weekes cut his target by $1 to $73. The average on the Street is $71.53.


“Growing” macro concerns are negatively impacting the performance of Canadian media companies, according to RBC Dominion Securities analyst Drew McReynolds.

In a research report released Monday previewing first-quarter earnings season, he said he expects the group to remain under pressure “until greater visibility emerges as to whether a soft or hard landing scenario transpires.”

“Central bank tightening in response to persistently high inflation has shifted the macro narrative from one of post-COVID-19 recovery to one of soft landing and economic slowdown, if not hard landing and outright recession,” he said. “In addition, the risk-off sentiment combined with declining global liquidity has begun to take a toll particularly on the small cap names within our media coverage with cyclical exposure and/or low trading liquidity. Until greater visibility emerges as to whether a soft or hard landing scenario transpires, we expect the group to remain under pressure. In this report, we provide a breakdown of revenues by company alongside FCF, leverage, payout ratio and valuation snapshots highlighting where we believe the more cyclically sensitive revenue exposures reside, as well as highlighting pockets of elevated financial and/or valuation risk.”

“In our media coverage, we currently have eight Outperform-rated stocks and see considerable upside should central banks be able to orchestrate a soft land scenario for the North American economy. Given still limited visibility as to whether a soft or hard landing scenario will emerge and taking into account current valuations, our three best ideas in our media coverage have both growth and defensive attributes – Thomson Reuters (Outperform, US$122 Price Target), VerticalScope (Outperform, $32 Price Target) and Points (Outperform, US$25 Price Target).”

After making estimate revisions for the group, Mr. McReynolds made four target price adjustments:

* Thomson Reuters Corp. (TRI-N/TRI-T, “outperform”) to US$122 from US$120. The average on the Street is US$118.90.

“We continue to view Thomson Reuters as a high-quality core holding with an ability to deliver average annual total returns of approximately 10-15 per cent over the longer-term,” he said. “We believe the company remains firmly on track with its previously-provided financial outlook for 2022 and 2023 – with potential for upward revisions. We also believe the company has entered a new phase of 8-12-per-cent annual dividend growth underpinned by a step-up in FCF generation driven by the ongoing Change Program.”

* Transcontinental Inc. (TCL.A-T, “outperform”) to $24 from $26. Average: $23.08.

“At 5.5 times FTM [forward 12-month] EV/EBITDA, we believe Transcontinental continues to be a cheap way to play the post-COVID theme given operating leverage to renewed year-over-year growth in retail flyer volumes as physical retail traffic recovers,” he said. “Despite lingering resin and FX impacts, we continue to see the potential for an upward rerating of the stock given what is accelerating organic revenue growth momentum within packaging (with the packaging revenue contribution now approaching 60 per cent) and an improving printing narrative with one third of printing and media revenues growing double-digits. With the stock trading at a notable discount to the 8 times average for packaging peers, Transcontinental remains one of our best ideas with each 0.5 times increase in multiple equating to $3 per share, management’s long-standing masterclass in execution, leverage of 2.3 times and $2.50/share in normalized FCF.”

* Points International Inc. (PCOM-Q/PTS-T, “outperform”) to US$25 from US$26. Average: US$23.77.

“With what finally appears to be the beginning of a sustained multi-year recovery in global travel and hospitality post-COVID-19, we believe Points is now benefiting from renewed adjacent growth in the global loyalty industry, providing investors with a low-risk, differentiated way to play the recovery,” he said. “While reinvestments are likely to dampen margins in 2022, reinstated 2024 financial targets point to significant upside potential versus our forecast and we believe are indicative of a multi-year cyclical tailwind, a broader Points service capability and strong pipeline of new business that has been boosted by COVID. Coupled with consistent positive FCF generation, a strong balance sheet and growing capital return optionality, Points remains one of our best small cap ideas in our coverage.”

* Enthusiast Gaming Holdings Inc. (EGLX-T/EGLX-Q, “outperform”) to $8 from $7. Average: $8.80.

“Management sees a significant opportunity to further aggregate and monetize the still highly fragmented fan experience segment of a broader gaming ecosystem,” he said. “While in the near-term profitability is likely to be superseded by numerous strategic initiatives to capitalize on a firstmover advantage, inevitably adding volatility to the stock, we continue to view current levels as an attractive entry point reflecting multiple catalysts that include: (i) greater appreciation by the market for the shear size, influence and growth potential of the broader global gaming ecosystem; (ii) improving earnings visibility as the company transitions from ‘proof of concept’ to monetization; and (iii) with greater ecosystem appreciation and improving earnings visibility, garnering a growing scarcity premium in the public market as a gaming media pure-play. Longer-term, we believe Project GG represents attractive option value for investors with a successful beta platform launch in 2022 having the potential to be materially NAV accretive over time.”


Canaccord Genuity analyst Luke Hannan expects “another quarter of strong used vehicle sales and front-end margin strength” when AutoCanada Inc. (ACQ-T) releases its first-quarter results on Wednesday after the bell.

He’s projecting EBITDA of $61-million, up from $39-million during the same period a year ago and above the Street’s forecast of $57-million. He sees adjusted earnings per share rising to 96 cents from 71 cents, also topping the consensus (83 cents).

“DesRosiers Automotive Consultants data show that, for Q1/22, Canadian light new vehicle sales were down approximately 13 per cent year-over-year,” said Mr. Hannan. “Recall that Q1/21 marked the last quarter in recent memory that was unaffected by the global semiconductor shortage, meaning dealers’ lots were relatively well stocked with new vehicles. The picture is significantly different a year later, with a lack of new car inventory on hand and most dealers not expecting normalization to take place until well into 2023.

“As a result, our view that ACQ will continue to recognize robust front-end margins (on both new and used vehicles) over the medium-term remains unchanged, with a higher mix of used sales vs. new sales. We believe 2022 will look similar in many aspects to 2021 for ACQ, specifically with regards to its used-to-new sales ratio and new/used GPUs, and believe the company is well positioned to meet customer demand given its proactivity in securing used vehicle inventory as it waits for new vehicles to roll off OEM production lines. However, the steady recovery in miles/KMs driven across both Canada and the U.S. suggest ACQ’s PS&CR division, a key profit driver for the company, will witness more volumes this year relative to last year.”

Despite his bullish view, Mr. Hannan acknowledged current vehicle prices are likely to decline with increased production over time, which he calls a “manageable scenario for ACQ given its scale and use of data and analytics in the daily marking-to-market of vehicle valuations.”

However, it did cause him to “modestly” lower his target multiple based on “this longer-term risk,” prompting him to cut his target to $55 from $60 with a “buy” recommendation. The average is $55.39.

“We are comfortable with our target multiple representing a premium to ACQ peers, given ACQ’s (1) positioning in the Canadian market; (2) strong track record of outperformance relative to peers; and (3) potential for accretive M&A,” he said.


Ahead of the release of their first-quarter results later this week, Scotia Capital’s Patricia Baker raised her target prices for a pair of Canadian retailers.

* Aritzia Inc. (ATZ-T) to $66 from $65 with a “sector outperform” rating. The average is $65.14.

“We expect earnings growth in the quarter to be driven by higher revenue supported by strong demand during the holiday season as well as solid gross margin performance,” she said. “On the call, we look for a discussion on how ATZ is navigating industry challenges, including COVID-19 restrictions in Canada during Q1, supply chain disruptions, labour shortages, and raw material inflation. We also expect ATZ to provide an outlook for the next fiscal year, including an early read on Q1/F23 sales trends as the brand launched its spring collection in February. We see ATZ very well positioned in the NA apparel market with significant opportunities for further growth through new stores, market expansions, ongoing solid product offers as well as entering new product categories and expanding the depth and breadth in its existing categories.”

* Sleep Country Canada Holdings Inc. (ZZZ-T) to $46 from $45 with a “sector outperform” rating. The average is $38.57.

“In Q1F22, ZZZ was lapping exceptional Q1 performance last year, with revenue growth of 20.7 per cent and same-store sales growth of 19.6 per cent,” she said. “ZZZ will be cycling tough comps in F22 as F21 was an outstanding year marked by extraordinary sales (up 21.4 per cent) and earnings (more than 40-per-cent) growth. That said, we believe ZZZ, as a leader in the Canadian sleep space, is well-positioned to continue gaining market share with its expanded channels (e.g., ecommerce, various partnerships) and product/brand innovations. We are NOT revising our target multiple on ZZZ to reflect a potentially more difficult consumer backdrop. In our view, since its IPO in 2015, ZZZ has developed its business and extended its reach to Canadians by way of serious strategic initiatives that, if anything, supports an expanding multiple.”


Scotia Capital analyst Meny Grauman expects a “rocky” first quarter from Canadian life insurance companies despite rising interest rates.

“As we approach Q1 reporting season we expect to see a continuation of some of the same themes and trends we saw developing in the second half of 2021,” he said in a research note. “This includes the negative impact of rising mortality in the U.S. due to the pandemic (SLF), the effects of ever stricter COVID-related lockdowns in parts of Asia (MFC and SLF), and ongoing supply chain issues across North America (IAG).

“The key difference is that while rates continue to head higher, global equity markets are no longer convinced that this move will be accompanied by exuberant post-pandemic economic growth, an outlook that is only made more complicated by the war in Ukraine. These recent events are raising the odds of a full-blown recession in Europe (GWO), and even if we don’t believe that we will see a similar outcome in North America, souring sentiment is driving a broad-based sell-off in stocks that will weigh on investment returns and AUM levels across the group both in Q1 and beyond. How long this negative market sentiment will last is hard to predict, but one thing we are quite sure about is that Q1 reporting is unlikely to provide any catalyst for a turnaround.”

Mr. Grauman made these target price reductions:

  • Great-West Lifeco Inc. (GWO-T, “sector perform”) to $38 from $41. Average: $40.67.
  • IA Financial Corporation Inc. (IAG-T, “sector outperform”) to $85 from $92. Average: $90.44.
  • Manulife Financial Corp. (MFC-T, “sector perform”) to $28 from $30. Average: $31.29.
  • Sun Life Financial Inc. (SLF-T, “sector outperform”) to $71 from $76. Average: $75.79.

“In this current market environment, our previous group average target multiple of 1.45 times is too aggressive, and so we revert to 1.35 times which is closer to group’s historical average,” he said. “We make no changes to our recommendations and continue to favor IAG and SLF versus the other large lifecos (especially after their recent underperformance), but our price targets do fall by 6 per cent on average given our lower target multiples.

“Manulife remains the most contentious name we cover. After a negative market response to its mid-November VA announcement, the stock is up 1 per cent since that press release, and for the year to date it is the best-performing stock in our coverage universe. We believe that much of this outperformance is being driven by rising rates which historically have been very correlated with the shares, but which no longer has a material direct effect on earnings. The reality though is that the outlook for Manulife’s Q1 results is somewhat challenged, and the shares have a long history of not being the best place to hide from volatile markets. We acknowledge that the company’s risk profile is nothing like what it used to be, but tail risk is still higher for this name than for peers. The bottom line for us is that the recent outperformance of the shares makes the stock vulnerable to a pullback this earnings season.”


In other analyst actions:

* Calling it “a top value play demonstrating resilience and solid operational momentum,” Scotia Capital analyst Phil Hardie raised his Fairfax Financial Holdings Ltd. (FFH-T) target to $845 from $820 with a “sector outperform” rating, while RBC’s Mark Dwelle raised his target to US$750 from US$675 with an “outperform” recommendation. The average is $880.59.

“We believe the key takeaway from the quarter was that, despite rising interest rates and volatile financial markets, Fairfax demonstrated resilience and the results from its insurance operations continued to be strong,” he said. “We expect the market turbulence experienced so far through Q2 to create some near-term headwinds, but remain confident that Fairfax is on track to achieve double-digit expansion of BVPS over the mid-term. We are forecasting mid-single-digit growth in 2022 and accelerating to almost double-digit in 2023.”

* Canaccord Genuity’s Yuri Lynk cut his AirBoss of America Corp. (BOS-T) target to $51 from $58 with a “buy” rating. The average is $54.83.

“We continue to view BOS as a catalyst-rich story with attractive upside potential as it converts its record $1.5 billion sales pipeline to revenue,” he said. “With very little net debt, BOS is also well positioned to continue to grow inorganically, and we note management’s successful track record of integrating and growing acquired companies. Admittedly, revenue visibility is quite poor as government contracts are let on an irregular basis. This appears reflected in the company’s modest valuation.

* RBC’s Greg Pardy raised his Baytex Energy Corp. (BTE-T) target to $7 from $6, keeping a “sector perform” rating, while Stifel’s Cody Kwong increased his target to $8.25 from $7 with a “hold” rating. The average is $8.09.

“Baytex is off to a nice start in 2022 amid ongoing debt reduction and impressive drilling results in its emerging Clearwater oil play. The company is also poised to execute a share buyback program once its net debt reaches $1.2-billion — expected in the second quarter,” said Mr. Pardy.

* Goldman Sachs’ Neil Mehta raised his target for Cenovus Energy Inc. (CVE-N, CVE-T) to US$21 from US$20 with a “buy” rating. The average is US$22.91.

* Mr. Mehta also raised Imperial Oil Ltd. (IMO-T) to $72 from $71 with a “buy” rating, while JP Morgan’s Phil Gresh increased his target to $79 from $77 with a “hold” rating and BMO’s Randy Ollenberger hiked his target to $70 from $65 with an “outperform” rating. The average is $65.26.

* CIBC’s Scott Fromson reduced his Colliers International Group Inc. (CIGI-Q, CIGI-T) target to US$155 from US$190, below the US$177.29 average, with an “outperformer” rating.

“Admittedly we are playing catch-up on a 28-per--cent pullback from the US$156.51 52-week high on February 16, one week before Russia’s invasion of Ukraine – how things have changed since CIGI announced its eighth consecutive quarterly beat on February 10. In the near term, market sentiment has shifted; CIGI technicals are now challenging. Over the longer term, CIGI’s fundamentals remain intact and we believe our 12-18 month price target period will provide ample time for share price recovery as macro and geopolitical outlooks stabilize. Our estimates come down on expectations for reduced regional growth (particularly EMEA) and lower margins,” said Mr. Fromson.

* CIBC’s Bryce Adams cut his Copper Mountain Mining Corp. (CMMC-T) target to $4.50 from $4.75, reiterating an “outperformer” rating. The average is $5.15.

* Mr. Adams also raised his targets for First Quantum Minerals Inc. (FM-T) to $42.50 from $40 with an “outperformer” rating and Teck Resources Ltd. (TECK.B-T) to $52 from $50 with a “neutral” rating. The averages on the Street are $43.39 and $59.74, respectively.

* BMO Nesbitt Burns’ Jackie Przybylowski, resumed coverage of Lundin Mining Corp. (LUN-T) with an “outperform” rating, versus “market perform” previously, and a $16.50 target, up from $15 and above the $14.06 average.

“Acquisition of Josemaria Resources and the Josemaria project moves Lundin Mining to become more of a copper-focused, growth-oriented company and away from its more defensive past,” she said. “In our view this is a positive move, especially given the market’s overall longer-term optimism for copper and because, with recent additions to Lundin’s technical capabilities and in-country Argentina experience, we believe the company has significant potential to create real value in this asset.”

* CIBC’s Kevin Chiang reduced his NFI Group Inc. (NFI-T) target to $12 from $18 with a “neutral” rating. Others cutting their targets include: Stifel’s Maggie MacDougall to $6 from $11.50 with a “sell” rating and BMO’s Jonathan Lamers to $13 from $15.50 with a “market perform” rating. The average is $16.75.

“NFI reduced its 2022 Adj. EBITDA guidance to $15-45-million from $100-130-million,” said Mr. Lamers. “We consider this realistic given current global supply headwinds, whereas the prior guide had assumed significant improvement in the supply situation in H2 2022. The stock should benefit eventually from the clear earnings upside as end markets recover. The issues are: i) the longer the supply challenges continue, the further the upside is pushed out, and ii) the magnitude of potential dilution before the eventual recovery.”

* RBC’s Keith Mackey raised his Pason Systems Inc. (PSI-T) target by $1 to $23, maintaining an “outperform” rating. The average is $19.08.

“Pason reported strong 1Q22 results which highlighted growth in revenue per industry day and EBITDA margins. Global drilling activity remains strong, although the steepest improvements in North America are likely in the rearview mirror. In that context, we continue to see value in Pason shares as the company demonstrates strong margins, free cash flow, and financial returns,” said Mr. Mackey.

* Canaccord Genuity’s Joseph Vafi raised his Payfare Inc. (PAY-T) target to $12 from $11 with a “buy” rating. The average is $13.75.

* CIBC’s Jamie Kubik bumped up his Secure Energy Services Inc. (SES-T) target to $8 from $7.50, remaining below the $8.52 average, with an “outperformer” rating.

* Upon assuming coverage of the stock, CIBC’s John Zamparo raised the firm’s target for Spin Master Corp. (TOY-T) to $62 from $55 with an “outperformer” rating. The average is $61.10.

“Consumer discretionary names are out of fashion but TOY offers investors attractive profitability, an intriguing growth driver through digital, and a sterling balance sheet at a compelling valuation. Execution risks are ever present in this industry, but TOY’s performance has been admirable since the pandemic, continually exceeding expectations by a significant margin. Capital deployment (through M&A, a dividend or SIB) could add to total shareholder returns, and increased attention to the sector through peers HAS and MAT could lift valuation,” he said.

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