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

Citi analyst Stephen Trent thinks “elements of the market appear to be very enthusiastic” about the earnings prospects for Air Canada (AC-T), believing reductions to its financial forecasts may be coming to an end after missing the Street’s expectations in three of the last four quarters.

“Time will tell,” he said. “To its credit, management has navigated Air Canada through a very difficult operating environment, including stricter pandemic-era governmental measures versus what has been the case in the United States and elsewhere. In spite of these solid efforts, Air Canada’s earnings misses seem to have been a factor in consensus estimate declines in recent months. Although we give management the benefit of the doubt on achieving some near- to medium-term improvements, Citi would prefer to participate in Americas Airline market share dominance through Copa, as the latter appears to be generating a higher ROI on such dominance.”

In a research note released Monday titled Close To A Reasonable Altitude, Mr. Trent did make reductions to his full-year earnings per share projections through 2024. His 2022 estimate slid to a loss of $3.12 from a loss of $3.05. His 2023 and 2024 estimates are now profits of $1.09 and $4.65, respectively, down from $1.18 and $4.71.

“Forecast adjustments for Air Canada include the incorporation of lower expected passenger yields, higher expected non-ticket revenue, slightly higher forecasted costs per available seat mile or CASM, ex-fuel and 2Q’22 results into our model. (Yield, the airline industry’s price point, measures the amount of ticket revenue generated per passenger mile flown.),” he said. “Although 2023 EPS for the Canadian flag carrier soften modestly, Citi’s target price increases from $19 to $20 per share, as we boost our target multiple on the shares from 16 times to 20 times. The latter is in-line with the stock’s historical, pre-pandemic maximum and seems to reflect investor enthusiasm that earnings estimate trims have come to an end.”

His new $20 target remains below the average on the Street of $26.21, according to Refinitiv data.

“Although Citi’s full-year 2022 estimates are in-line with guidance, the stock’s implied valuation suggests that there are better risk-reward opportunities elsewhere in the Americas Airline space,” he said.

“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. Valuation looks full, in our view, relative to recent historical trading levels and compared to its large US 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.”


While the second-quarter results for Premium Brands Holdings Corp. (PBH-T) exceeded expectations, Stifel’s Martin Landry was one of several equity analyst on the Street to express concern about shrinking margins and debt levels given rising interest rates.

“PBH’s balance sheet reached its highest leverage ratio since 2015 with total debt/EBITDA of 4.4 times,” he said. “This increased financial leverage raises questions given that the company’s revolved bears variable rates. However, management appeared confident in its ability to manage debt levels going forward. Elevated inventory levels are expected to decrease in the second half driven by safety stock reduction and sell through off inventory build-up in H1/22. This should allow the company to generate significant cash flow and reduce its balance sheet leverage to more normalized levels, in our view. PBH’s still has room before breaching its debt covenants, which require a senior funded debt to EBITDA ratio less-than 4 times (vs 3.3 times currently).”

Shares of the Vancouver-based specialty food company fell 1.3 per cent on Friday following the premarket release of its better-than-anticipated quarterly results. Revenue rose 23.1 per cent year-over-year to $1.52-billion driven largely by price increases, exceeding Mr. Landry’s $1.46-billion estimate. Adjusted earnings per share gained 11.9 per cent to $1.37, above the $1.34 consensus on the Street but missing the analyst’s $1.53 estimate.

“Premium Brands increased its 2022 revenue guidance to $5.75-6-billion ($5.6 to $5.85-billion previously),” said Mr. Landry. “The guidance assumes full year organic volume of 5.5-6 per cent in the Specialty Food’s segment, which suggest an impressive growth of 8-9 per cent in H2. This looks aggressive at first glance especially in light of the economic slowdown. Adj. EBITDA guidance calls for margin improvement in H2/22 as price increases implemented in H1 offsets the inflationary pressures seen in the first half of the year. We could see upside to the Adj. EBITDA guidance under a scenario where commodity prices continue to decrease resulting in higher gross margin levels. Management currently assumes a stable commodity environment from current levels, which could be conservative.”

Despite the guidance bump, Mr. Landry lowered his 2022 and 2023 EPS estimates by 3 per cent and 5 per cent, respectively, citing of lower margins and higher interest expense associated with rising interest rates and PBH’s higher debt level.

“Year-to-date organic growth of 2 per cent has slowed vs historical levels, but the slowdown seem mostly related to company specific issues rather than demand destruction,” he said. “With price increases almost fully caught-up to commodity cost inflation management expect profitability levels to increase in coming quarters and next year calling for 2023 EBITDA margins to reach 10 per cent, up 200 basis points from YTD levels of 8.1 per cent.”

That led him to cut his target for Premium Brands shares to $120 from $135, reiterating a “buy” rating. The average on the Street is $132.30.

“At first glance this target seems aggressive but commodity costs stabilizing and potentially retreating would benefit the company,” he said. “Our visibility on commodity costs is limited reducing our conviction on the likelihood of this potential scenario. PBH’s financial leverage remains high, in our view, and could impact its valuation multiples. We maintain our BUY rating but decrease our target ... on the back of lower estimates and valuation multiples.”

Elsewhere, others making changes include:

* iA Capital Markets’ Neil Linsdell to $137 from $145 with a “buy” rating.

“Despite macro-based challenges, the Company has consistently delivered good year-over-year performance,” said Mr. Linsdell. “We see that customer demand remains strong and continues to grow, even after significant price increases ($490-million in LTM). The Company is diversified in protein types and sources, customers, and sales channels, positioning well in a challenging environment. With signs of commodity prices stabilizing and the labour market easing, the Company is likely to see margin improvements and higher organic volume growth as the operating environment normalizes in the next few quarters.”

* National Bank’s Vishal Shreedhar to $134 from $136 with an “outperform” rating.

“PBH has executed relatively well through the pandemic; however, total returns have lagged, down by 21 per cent year-to-date vs. the TSX Staples Index (up by 5 per cent),” he said. “We believe markets are looking for improved margin performance and improved organic growth. Management has suggested that cost inflation is moderating and labour conditions are improving, which we believe are favourable when looking out 12 months (all else equal).”

* Scotia’s George Doumet to $135 from $137 with a “sector outperform” rating.

“All things taking into account (supply chain and labour constraints, inflationary environment, etc), PBH delivered a good quarter. In terms of themes, it is similar to what we’ve been seeing in the last few quarters, notably a continued recovery in foodservice volumes met with a challenging operational backdrop at SF (constraining volume growth and margin expansion). On the 2022 guidance, adj. EBITDA is now expected to be at the low range of its $510-million to $530-million band (we and the Street were there already) due to negative mix impacts, stubbornly elevated raw material costs and higher freight costs. Looking ahead, we anticipate the share price recovery to gain traction when both volume growth and margins normalize (aided by PBH holding price as input costs eventually deflate). We expect (accretive) bolt-on M&A to drive earnings (albeit likely at a slower pace),” said Mr. Doumet.

* RBC’s Sabahat Khan to $112 from $125 with a “sector perform” rating.

“We remain cautious on the outlook, however, given ongoing macro headwinds (e.g., inflation/supply chain disruptions), as well as concern about the macro backdrop (i.e., potential for an economic slowdown), both of which could continue to impact results/demand over the coming quarters. The updated guidance also implies a lower margin relative to prior guidance (reflecting the operating backdrop and two new acquisitions),” said Mr. Khan.

* CIBC’s John Zamparo to $106 from $113 with a “neutral” rating.


Though he called its second-quarter results a “good showing” and emphasized management’s “bullish tone” moving forward, National Bank Financial analyst Maxim Sytchev thinks the current valuation for Richie Bros Auctioneers Inc. (RBA-N, RBA-T) is “too rich for our taste.”

“Ritchie Bros. is a tremendous asset,” he said. “Dominant market share (hence, network effects), counter-cyclical, benefiting from strong used pricing and strong balance sheet. But there is a price for everything as we need to consider risk/ reward dynamic. We cannot predict the future, we can only observe that at the moment, relative valuation of RBA is in a significant premium territory, akin to 2010 and 2020 dislocations. As a result, we continue to view RBA’s valuation as stretched, providing limited downside protection (if any) to potential investors.”

Shares of the Vancouver-based company dropped 6.3 per cent on Friday in response to the quarterly release, which saw gross transaction value jump 10.3 per cent year-over-year to US$1.68-billion, exceeding the Street’s prediction by 3 per cent. That led to a 22.2-per-cent rise in revenue to US$484.5-million, also topping the consensus (US$433.4-million) and Mr. Sytchev’s forecast of US$451.6-million. Adjusted earnings per share of 74 US cents was also stronger than expected (58 US cents and 55 US cents, respectively).

“The supply of heavy equipment continues to be tight, which has kept pricing elevated,” he said. “Despite the number of lots sold dropping down 3 per cent year-over-year, GTV was up 10 per cent on strength in Inventory (up 38 per cent year-over-year) with Canada leading the way at 14 per cent year-over-year GTV growth. This translated to an impressive beat on revenue and adjusted EBITDA, though once elevated SBC (up 81 per cent to $13.6 mln) is backed out the underlying profitability beat is admittedly less pronounced. Cost of inventory for A&M also went up 34 per cent year-over-year as the tight market inflated RBA’s sourcing costs. Although temporary, it is also worth noting that RBA also took a $9.7-million loss on the redemption of its 2021 notes following the termination of the planned EuroAuctions acquisition. Other components of SG&A, including wages, benefits, overhead, travel and marketing all saw year-over-year increases as well, no doubt hindered by a persistently inflationary environment. There was no incremental commentary on the company’s longterm Evergreen targets, which we believe may be optimistic given the eventual normalization of equipment availability.”

After raising his forecast for the next two full fiscal years in response to the results, Mr. Sytchev raised his target for Richie Bros shares to US$60 from US$56 with an “underperform” rating. The average on the Street is US$68.33.

Elsewhere, others making changes include:

* Raymond James’ Bryan Fast to US$62 from US$60 with a “market perform” rating.

“Ritchie Bros. has delivered solid results year-to-date, as tight equipment supply has been offset by with strength in asset pricing. In light of this performance, Ritchie has been the best performing stock amongst the machinery group, up 11 per cent year-to-date (compared to the S&P500 down 13 per cent) pushing valuation to the upper end of the historical range. Shares are now trading at 19 times 2022 estimated EV/EBITDA which is ahead of the 10-yr average of 15 times. This elevated valuation is a large driver for our neutral stance on the stock,” said Mr. Fast.

* RBC’s Sabahat Khan to US$73 from US$67 with an “outperform” rating.

“Ritchie Bros.’ Q2 results reflected strong topline performance amidst a tight supply environment, with results outperforming RBC and consensus estimates across all metrics,” said Mr. Khan. “During the quarter, the company continued to make strong progress with its services offerings (e.g., service revenue grew 11 per cent year-over-year on an organic basis, while RBFS revenue was up 69 per cent year-over-year), which contributed to the company’s record high Auction Rate of 17 per cent. On the earnings call, management noted that supply chain headwinds persist, indicating that equipment supply is likely to remain constrained over the coming quarters. With that said, the tight supply environment should in part be mitigated by higher pricing. Overall, we believe that the 7-per-cent share price pull back [Friday] is unjustified given the strong execution over the recent quarters and Ritchie Bros.’ favourable positioning amidst the current macro backdrop.”

* Scotia Capital’s Michael Doumet to US$68 from US$64 with a “sector perform” rating.


Believing its “excessive valuation premium sets up for underperformance,” Keefe, Bruyette & Woods analyst Mike Rizvanovic downgraded Royal Bank of Canada (RY-T) to “underperform” from “market perform” in a research note released late Sunday.

Seeing more value in peers, including Bank of Montreal (BMO-T) and Bank of Nova Scotia (BNS-T), he cut his target for RBC shares to $118 from $132, below the $141.63 average on the Street.

Mr. Rizvanovic also made these target reductions:

  • Bank of Montreal (BMO-T, “outperform”) to $146 from $160. Average: $153.29.
  • Bank of Nova Scotia (BNS-T, “outperform”) to $86 from $97. Average: $89.89.
  • Canadian Imperial Bank of Commerce (CM-T, “market perform”) to $68 from $76. Average: $78.62.
  • Canadian Western Bank (CWB-T, “outperform”) to $34 from $35. Average: $36.89.
  • Laurentian Bank of Canada (LB-T, “market perform”) to $43 from $44. Average: $46.83.
  • National Bank of Canada (NA-T, “outperform”) to $98 from $108. Average: $103.50.
  • Toronto-Dominion Bank (TD-T, “market perform”) to $86 from $93. Average: $100.94.


Thinking “all but the most positive scenarios are priced into the stock,” CIBC World Markets’ Paul Holden downgraded Definity Financial Corp. (DFY-T) to “neutral” from “outperformer” previously,

“.This is purely a call on valuation as the stock is now trading at 2.0 times P/BV [price-to-book value] versus an ROE expectation of 9-10 per cent,” he said. “The current stock price is closing in on our $39.50 price target, which does include partial credit for acquisition potential. Our scenario analysis shows that further upside may be limited in all but the most optimistic scenarios. Management is executing against growth objectives, potential capital deployment is compelling and defensive attributes may limit downside in a stressed economic scenario. However, we believe all these positive attributes are sufficiently priced into the stock and hence our downgrade.”

His target remains $39.50, exceeding the $39.14 average.


Raymond James analyst Frederic Bastien thinks the Street continues to be “completely dismissing the sea change” in the fortunes of Black Diamond Group Ltd. (BDI-T).

Accordingly, he raised his rating for the Calgary-based company to “strong buy” from “outperform” following better-than-expected second-quarter results.

“It has taken management years to transform BDI from a concentrated bet on Alberta’s oil sands to a more recurring rental business balanced across sectors and regions,” said Mr. Bastien. “And big rewards are now there for the taking, in our view. This is particularly true in today’s inflationary environment. The asset-heavy company does not operate manufacturing plants, which have universally suffered from supply chain issues and labour cost escalation. What Black Diamond has is rental capacity that can be deployed in receptive infrastructure, education and government markets at significantly higher prices. Even if rates were to stabilize at current levels, it would take until 2024 at the earliest to fully reprice BDI’s entire fleet. With this much visibility on rental rate increases, good competition for assets, continued momentum at LodgeLink, and a valuation that screens well on both an absolute and relative basis, it is time for us to turn more aggressive on the stock.”

On Aug. 4, Black Diamond reported adjusted earnings before interest, taxes, depreciation and amortization of $18.2-million, exceeding both the analyst’s $15.6-million estimate and the consensus forecast of $16.6-million.

“Strength was broad based, with both reporting segments contributing to the positive variance to our forecast. Return on assets rose four percentage points year-over-year to 17 per cent, while net debt-to-EBITDA of 2.1 times fell from 3.0 times, providing further capital deployment optionality,” said Mr. Bastien.

“BDI added 424 MSS units through a combination of organic and inorganic means, and returned $4-million to shareholders (through dividends, preferred shares redemption and share buybacks), all the while keeping its debt levels essentially intact. We believe this speaks to the strong FCF potential of modular buildings—arguably one of the best alternative asset classes most investors have never heard of.”

He raised his target for Black Diamond shares to $8 from $6.50. The average is $7.29.


In other analyst actions:

* Calling its valuation discount to peers “extremely short-sighted and unjustified, TD Securities analyst Vince Valentini upgraded Rogers Communications Inc. (RCI.B-T) to “action list buy” from “buy” with an $83 target, up from $80. The average target on the Street is $75.20.

“Fears related to senior management changes last year seem to have been greatly exaggerated. Tony Staffieri and his team have been delivering excellent operating metrics, including arguably best-in-class wireless KPIs (which is the area where investors had been most concerned about execution), for four consecutive quarters,” he said.

“The main reason why RCI.B has been weak recently (down 30 per cent since Q1/22 results) seems to be deal delays and uncertainty (to be clear, we do not expect any meaningful lasting impact from the outage).”

TD Securities’ Michael Tupholme downgraded Bird Construction Inc. (BDT-T) to “hold” from “buy” with an $8 target, falling from $10.50. The average target on the Street is $10.58.

* Cowen’s Cai Von Rumohr raised Bombardier Inc. (BBD.B-T) to “outperform” from “market perform” with a $51.85 target. The average is $52.52.

* CIBC’s Kevin Chiang lowered his Airboss of America Corp. (BOS-T) target to $29 from $32 with an “outperformer” rating, while National Bank’s Michael Robertson cut his target to $30 from $38 with an “outperform” rating. The average is $28.50.

* Mr. Chiang cut his Chorus Aviation Inc. (CHR-T) target to $4.75 from $5.25, below the $5.28 average, with an “outperformer” rating. Other changes include: Canaccord Genuity’s Matthew Lee to $5 from $6 with a “buy” rating and Scotia’s Konark Gupta to $4.50 from $5.75 with a “sector outperform” rating.

“Chorus reported Q2 results with EBITDA largely in line with expectations,” Mr. Lee said. “Our key takeaway from the quarter was the company’s commentary around its anticipated Falko fund. While the company modestly reduced its F22 guidance, we still believe the upside associated with its improved scale is substantial as CHR becomes a dominant player in the regional aircraft leasing industry. On the legacy side, we were encouraged by CHR’s collection rate, although the repossession provisions in the quarter suggest the firm is not yet fully in the clear. We have reduced our estimates to reflect the firm’s delayed fund.”

* RBC’s Jimmy Shan increased his Artis REIT (AX.UN-T) target to $12 from $11.50, below the $12.64 average, with a “sector perform” rating, while National Bank’s Matt Kornack raised his target to $11.50 from $11 with a “sector perform” rating.

“Artis REIT reported a better-than-expected Q2 with FFO/ unit of $0.38, up 12 per cent year-over-year, vs. RBC/consensus of $0.37/$0.35,” said Mr. Shan. “The quarter did show sequential occupancy improvement from US office leasing but also benefited from higher lease termination income and saw higher leasing costs. Capital allocation activities remain a key driver of the stock. Minnesota industrial assets are expected to clear at IFRS value.”

* National Bank Financial’s Jaeme Gloyn trimmed his Brookfield Business Partners L.P. (BBU-N, BBU.UN-T) target to US$34 from US$37 and below the US$36.67 average with an “outperform” rating. Others making changes include: RBC’s Geoffrey Kwan to US$34 from US$31 with an “outperform” rating and Desjardins’ Gary Ho to US$32 from US$37 with a “buy” rating.

“We believe BBU’s diversified portfolio of companies across sectors/geographies continues to deliver solid results,” he said. “In addition, we hold a favourable view of BBU’s recent flurry of acquisition activity (CDK, Neilsen, La Trobe, Scientific Games’ Lottery Business, Aldo, DexKo and Modulaire), and the ongoing build into the technology sector. Moreover, as noted above, we view management’s increased confidence to monetize the Westinghouse and Clarios assets favourably. Overall, we anticipate BBU’s successful execution/integration will drive the shares higher.”

* National Bank’s Rupert Merer raised his Brookfield Renewable Partners L.P. (BEP-N, BEP.UN-T) target to US$42 from US$38 with an “outperform” rating. Other changes include: Desjardins’ Brent Stadler to US$50 rom US$49 with a “hold” rating and RBC’s Geoffrey Kwan to US$43 from US$39 with a “sector perform” rating.. The average is US$41.23.

“BEP has deployed $1 billion to date, and appears to be on track to exceed its annual target of deploying $1.0-1.2-billion. BEP is also benefiting from elevated merchant power prices, locking in higher long-term power prices. We continue to see BEP as a core holding in the renewable energy sector, and we are increasing our price target ... to reflect our view that the company is well positioned to grow contracted cash flows and distributions,” said Mr. Kwan.

* Piper Sandler’s Michael Lavery cut his Canopy Growth Corp. (CGC-Q, WEED-T) target to US$2.50 from US$3, keeping an “underweight” rating, while Canaccord Genuity’s Matt Bottomley cut his target to $2.75 from $3.50 with a “sell” rating. The average is US$6.67.

* Scotia Capital’s Mario Saric cut his Dream Office REIT (D.UN-T) target to $24 from $26.25 with a “sector perform” rating, while RBC’s Pammi Bir lowered his target to $21 from $22 with a “sector perform” rating and CIBC’s Scott Fromson reduced his target to $24 from $27 with an “outperformer” rating. The average is $23.66.

“Although Q2 results were in line with our call, we’ve tempered our outlook on a slower road to recovery in fundamentals. Indeed, a tougher leasing environment and delays in tenants taking possession have weighed on anticipated occupancy gains, contributing to a reduction of D’s 2022 FFOPU guidance. That said, we expect a stronger recovery to form next year, with capital aimed in the near-term at redevelopments and the NCIB,” said Mr. Bir.

* RBC’s Keith Mackey lowered his Ensign Energy Services Inc. (ESI-T) target to $6 from $6.50 with an “outperform” rating. The average is $6.11.

* National Bank’s Cameron Doerksen cut his Heroux-Devtek Inc. (HRX-T) target to $23, above the $22.90 average, from $25 with an “outperform” rating. Other changes include: Raymond James’ Bryan Fast to $19 from $20.50 with an “outperform” rating, Scotia’s Konark Gupta to $18 from $21 with a “sector outperform” rating and Desjardins’ Benoit Poirier to $25 from $27 with a “top pick” recommendation.

“With encouraging signs that the air travel recovery is well on its way, we believe HRX offers a compelling value proposition, with an attractive valuation and a healthy balance sheet to opportunistically unlock inorganic growth opportunities,” Mr. Poirier said.

* Barclays’ John Aiken raised his IGM Financial Inc. (IGM-T) target to $39 from $38 with an “underweight” rating. The average is $42.86.

“Despite the decline in the market, and its toll on fee income and investments, IGM’s earnings came in modestly above expectations on the back of better than anticipated cost controls and contributions from its strategic investments. Additionally, management reduced expense growth guidance for the second time this year,” he said.

* CIBC’s Hamir Patel raised his target for shares of Interfor Corp. (IFP-T) to $42 from $40 with an “outperformer” rating, while RBC’s Paul Quinn bumped his target to $40 from $37 with an “outperform” rating. The average is $45.50.

* Barclays’ Raimo Lenschow trimmed his Open Text Corp. (OTEX-Q, OTEX-T) target to US$46 from US$47 with an “equal-weight” rating. The average is US$51.94.

* Desjardins Securities’ Chris Li cut his Parkland Corp. (PKI-T) target to $44 from $49, below the $47.62 average, a “buy” rating.

“We view PKI’s valuation as inexpensive but catalysts and patience are needed. The removal of the Sol funding overhang, continuing deleveraging (from 3.2 times in 2Q to less than 3.0 times in early 2023) and funds flow once the energy rally eases should improve sentiment and drive a higher valuation over time,” he said.

* National Bank’s Travis Wood cut his Suncor Energy Inc. (SU-T) target to $63 from $64 with a “sector perform” rating, while Raymond James’ Michael Shaw lowered his target to $53 from $57 with a “market perform” rating. The average is $55.72.

“Suncor’s 2Q results underscore the challenges facing the company,” he said. “A busy 2Q for planned turnarounds and some unplanned outages resulted in SU lowering its full year production guidance from a mid-point of 770 mboe/d to 750 mboe/d. At the same time, SU increased its full year capex estimate from $4.7-billion to $4.9–$5.2-billion to account for inflationary pressures, higher maintenance expenditures, and select project restarts. Not surprisingly, Suncor’s equity underperformed on the guidance update, down 0.7 per cent versus a positive for Canadian large cap peers (up 2 per cent to 3 per cent) and the TSX up 0.2 per cent.”

“SU’s asset base has a number of characteristics that make it attractive in a volatile energy market – low production decline and class-leading downstream assets being key among them. Nonetheless, until the safety and operational issues are firmly resolved, we recommend investors look to other Canadian large cap and integrated producers for energy exposure.”

* RBC’s Daniel Perlin cut his target for Telus International Inc. (TIXT-N, TIXT-T) to US$38 from US$39 with an “outperform” rating. Other changes include: Wells Fargo’s Jeff Cantwell to US$36 from US$30 with an “overweight” rating; TD’s Daniel Chan to US$35 from US$33 with a “buy” rating and Credit Suisse’s Kevin McVeigh to US$27 from US$25 with a “neutral” rating. The average is US$34.36.

“Despite the macro backdrop, TIXT continues to put up solid results, while the reiteration of guidance, despite increased FX headwinds from the stronger dollar shows the strength of the company’s operations,” said Mr. Perlin.

* CIBC’s Mark Jarvi raised his TransAlta Renewables Inc. (RNW-T) target to $19 from $18.50, above the $18.35 average, with a “neutral” rating.

“We believe the negative share price reaction for TA following largely in-line results and a relative conservative guide for H2 is unwarranted. Not only do we believe H2 results could be stronger on better hedge positions and continued strong pricing dynamics in Alberta, but more importantly the growth and funding outlook remains strong. We continue to see the ability for TA’s trading multiple to-rate higher as its transitions to more contracted renewables and we would further add to positions on the pullback in TA.,” said Mr. Jarvi.

* TD Securities’ Daryl Young raised his Uni-Select Inc. (UNS-T) target to $44 from $43 with a “buy” rating. Others making changes include: Canaccord Genuity’s Luke Hannan to $44.50 from $41 with a “buy” rating, Desjardins Securities’ Benoit Poirier to $47 from $39 with a “buy” rating, National Bank’s Zachary Evershed to $134 from $136 with an “outperform” rating and RBC’s Sabahat Khan to $41 from $37 with a “sector perform” rating. The average is $41.79.

“We were impressed once again with UNS’s results, which confirmed the potential for value creation under the new management team,” said Mr. Poirier. “We are encouraged by management’s operational excellence and the improved leverage ratio, which opens the door for strategic acquisitions. We believe the best is yet to come as we see many opportunities to grow revenue and improve margins.”

* Scotia’s Michael Doumet raised his Wajax Corp. (WJX-T) target to $26.50 from $25.50 with a “sector outperform” rating. The average is $25.88.

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