Inside the Market’s roundup of some of today’s key analyst actions
While acknowledging an “uncertain” macroeconomic outlook, National Bank Financial analyst Richard Tse thinks mortgage originations are “nearing a trough based on market data.”
That led him to upgrade Real Matters Inc. (REAL-T) to “outperform” from “market perform,” citing its “continued execution” and seeing a potential inflection point for its stock following better-than-expected second-quarter financial results.
“Despite the market conditions, the Company continues to execute on its market share gains,” said Mr. Tse. “During the quarter, Real Matters (again) picked up market share, launching one new lender and one new channel in the U.S. Appraisal segment, while also achieving a record net revenue margin, up 620 basis points year-over-year to 27.6 per cent in FQ2 given the challenging backdrop which has lowered network costs. In the Title and Close (T&C) segment, Real Matters signed one new lender in T&C and one new channel with an existing lender. The Company was also awarded a market share increase with a Tier 1 lender at the end of FQ2, with Management indicating they continue to make progress on additional Tier 1 lenders with an expectation of multiple RFPs [requests for proposals] in the back half of the year.
“With approximately $42-million in cash, no debt and (an estimated) low burn rate ($1.0-million in NTM [next 12-month] FCF), we believe Real Matters is well positioned to benefit when originations turn with ample capacity to scale volume under the current cost base.”
On Friday, shares of the Markham, Ont.-based real estate services firm soared 15.5 per cent after it reported revenue of $9.9-million, down 59 per cent year-over-year but up 1.4 per cent from the previous quarter and above the estimates of both Mr. Tse ($8.5-million) and the Street ($9.2-million). It was the first sequential increase after seven consecutive quarterly declines. An adjusted EBITDA loss of $1.7-billion was also better than forecasts (losses of $3.5-million and $2.7-million, respectively).
“Looking ahead, forecasts from the Mortgage Bankers Association (MBA) suggest CQ1 (FQ2) was a trough in mortgage originations with CQ2 (FQ3) expected to be up 38 per cent quarter-over-quarter and year-over-year origination growth to turn positive by CQ3 (FQ4) after nine consecutive quarters of year-over-year declines,” said Mr. Tse. “Our numbers suggest Real Matters is also inflecting to the upside.”
Mr. Tse raised his target for Real Matters shares to $6.50 from $5. The average target on the Street is $6.
Elsewhere, ATB Capital Markets’ Martin Toner raised his target to $9 from $8.50.
“Real Matters has done a strong job of weathering difficult market conditions through cost management, in our opinion,” said Mr. Toner. “We believe the sequential improvements, however modest, and the Company’s comments increased investor confidence. The closer and more likely improvements in market conditions get, the more Real Matters shares will regain lost ground, in our opinion. We believe a return to profitability and additional market share gains will drive further improvement in the share price.”
After a “strong” first quarter from GFL Environmental Inc. (GFL-N, GFL-T), ATB Capital Markets analyst Chris Murray expects “meaningful deleveraging and a strengthening margin profile” to lead to “improved sentiment and potential credit upgrades.”
Shares of the Toronto-based waste management company soared 7.5 per cent on Friday with the release of better-than-anticipated quarter results, which the analyst said displayed “price-led growth.” Revenue jumped 28.4 per cent year-over-year to $1.799-billion, while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) gained 24.3 per cent to $440.5-million, both ahead of Mr. Murray’s estimates ($1.7-billion and $407.9-million, respectively). Adjusted fully diluted earnings per share of 8 cents topped his projection by a penny.
“GFL delivered 12.6-per-cent core price growth (ATB estimate: 9.0 per cent), with EBITDA margin of 29.4 per cent in solid waste, 20 basis points ahead of ATB estimate,” he said. “We expect a continuation of favourable pricing conditions to contribute to incremental margin expansion in H2/23, particularly with headwinds from recycled commodity prices and cost pressures set to ease. Management confirmed that 85-90 per cent of its price increases have been implemented, providing visibility into the remainder of 2023 and into 2024.
“Management expects to hit the upper end of, or potentially exceed, full-year guidance after a strong Q1, with 2023 targets revisited with Q2/23 reporting. We expect upward guidance revisions at Q2 given the impact of price-led growth on margins in GFL’s base solid waste business. Guidance for Q2/23 calls for $535m-$545-million in Adjusted EBITDA, with solid waste margin expected to increase to 31 per cent (up 120 basis points quarter-over-quarter), consistent with ATB.”
With the results, GFL management confirmed the divestiture of three non-core distinct U.S. Solid Waste regions three non-core distinct U.S. Solid Waste regions will result in gross proceeds of approximately $1.6-billion, reducing net leverage to below 4.0 times by the end of the year and positioning the company for “sustainable industry leading free cash flow per share growth over the mid-term.”
“We believe the focus on deleveraging has improved sentiment toward the name and underpinned the recent re-rating,” said Mr. Murray.
After raising his 2023 and 2024 earnings expectations, he hiked his target for GFL shares to $56 from $53 with an “outperform” rating. The average target is $48.68.
Other analyst making changes include:
* National Bank Financial’s Rupert Merer to $54 from $52 with an “outperform” rating.
“Pricing was the story this quarter, as GFL delivered a record 13.1-per-cent growth from pricing and surcharges in Solid Waste, ahead of Q4′s 11.5 per cent,” said Mr. Merer. “This strength helped GFL deliver 190 basis points of organic adj. EBITDA margin expansion year-over-year (offsetting 95 bps and 125 bps of fuel price and commodity price headwinds, respectively), and it should lead to margin expansion throughout the year, which could be helped by lower fuel prices. GFL’s 2023 guidance was based on 8-per-cent price growth, and could revise upward if strong pricing continues in Q2.”
* CIBC’s Kevin Chiang to $55 from $48 with an “outperformer” rating.
“The biggest pushback we often get on GFL is that the ‘quality’ of its operations and the KPIs (key performance indicators) we track in the solid waste space lag that of its peers (i.e., FCF conversion, EBITDA margin, etc.),” said Mr. Chiang. “We do not view this as a negative, but instead highlight the opportunities and low-hanging fruit that GFL can harvest to drive outsized returns. Looking at where GFL’s KPIs could be in three to five years suggests significant equity upside.”
* Stifel’s Michael Hoffman to $60 from $58 with a “buy” rating.
* RBC’s Walter Spracklin to US$43 from US$39 with an “outperform” rating.
* JP Morgan’s Stephanie Yee to US$41 from US$40 with an “overweight” rating.
Investors should be bracing for a “challenging” first-quarter earnings release from Canadian Tire Corp. Ltd. (CTC.A-T) on May 11, according to Desjardins Securities’ Chris Li, who also sees the potential for reductions to the retailer’s outlook for the second half of year.
The analyst is currently forecasting earnings per share of $1.25 for the quarter, down 59 per cent year-over-year and 6 cents below the consensus estimate on the Street.
“Earnings visibility is low, with a wide range of analyst estimates ($1.06–1.67),” said Mr. Li. “Headwinds include tough year-ago comps, softening consumer spending, elevated inventory/destocking, an unseasonably warm winter and increased promotional intensity. Since 1Q is the smallest retail quarter, it will magnify margin pressure with the absorption of a full quarter of largely fixed expenses (elevated due to investments in IT and 3PL costs). Our forecasts do not include the impact from the fire on March 15 at one of the largest DCs in Ontario. While credit metrics remain solid at Financial Services (supported by solid employment), we expect write-offs to return closer to historical levels from previous investments in receivables growth.
“We believe the key question is whether the results and management’s commentary will cause 2H estimates to be revised lower. Consensus expects 2H EPS to show a modest improvement of 2 per cent year-over-year, predicated on Retail revenue growth of 1 per cent year-over-year vs down 4 per cent year-over-year in 1H. Easing freight and product cost pressures should also help. All else equal, if we assume Retail revenue declines by 2 per cent in 2H (1-per-cent base case), we estimate 2H EPS would decline by 6 per cent (2-per-cent base case).”
Despite the uncertainty, Mr. Li did raise his full-year 2023 and 2024 revenue and EBITDA estimates as the well as his 2023 earnings per share projection (to $16.55 from $16.36).
He maintained a “buy” recommendation and $205 target for Canadian Tire shares. The average on the Street is $199.50.
“While risk/reward skews to the positive (especially including the 4-per-cent dividend yield), patience is required,” he concluded.
“We believe current valuations (10.3 times consensus 2023 EPS vs 12–13 times average) largely reflect near-term challenges. While further share price volatility is possible, especially given the strong share price performance (25 per cent year-to-date), we maintain our positive long-term view.”
It’s “back to regular programming” for Toromont Industries Ltd. (TIH-T) with the removal of an important investor overhang with the announcement of a new chief executive officer, said National Bank Financial’s Maxim Sytchev.
He was one of several equity analysts on the Street to raise their target price for shares of the Vaughan, Ont.-based heavy equipment dealer after Friday’s announcement that executive vice president and chief financial officer Michael McMillan will succeed Scott Medhurst as its president and CEO. The news came alongside the release of better-than-expected first-quarter results.
“We’ve heard many theories around a potential CEO appointment over the last several months, but in our view, the appointment of Michael McMillan is the best outcome – a seasoned and thoughtful executive who intimately understands Toromont’s culture who has proven himself during the volatile COVID backdrop,” said Mr. Sytchev. “We believe investors will be equally pleased with the outcome. When it comes to the investment thesis, it’s true that scoring another Hewitt does not look obvious; however, in times of uncertainty, which we believe still permeates the investment landscape, the net cash position and capacity to judicially invest in core business (while being ready when an inevitable dislocation comes) deserves a premium, in our view, especially in infra-friendly geographies such as Eastern Canada.”
Mr. Sytchev expects “steady (upward) pressure” from Toromont after a quarter that saw revenue of $1.061-billion, above both his $935-million estimate and the Street’s $938-million projection. Adjusted EBITDA and earnings per share of $162-million and $1.12 also topped his estimates ($145-million and 87 cents) and the consensus ($141-million and 85 cents).
“While there are still delays in sourcing specific parts and inflationary pressures are still a factor, equipment and component supply is gradually normalizing,” he said. “Client bookings are also returning to pre-pandemic cadence, shifting sales back to their traditional pattern in terms of seasonality. This has started to shift the sales mix back towards equipment sales, which pressured Q1/23 gross margins somewhat (down 20 basis points year-over-year) in the Equipment Group. Nevertheless, we remain bullish on TIH’s end-markets given the demographic tailwinds created by rising immigration to Eastern Canada, generous government infra spending and still elevated commodity prices. Our view is reaffirmed by the fact that TIH is still looking to add technicians which is a positive readthrough for expected demand.”
“Toromont is taking advantage of improved equipment availability to continue building out its fleet, especially in Rentals, which management sees as a growing market in which TIH can gain market share going forward. Geographically, the company is still working on bolstering its fleet in Quebec and the Maritimes and optimizing operations in these geographies.”
Also seeing its net cash position allowing it to retain " significant optionality in terms of capital deployment and a strong buffer against further downturns in the broader economy,” Mr. Sytchev increased his target for the company’s shares to $126 from $124 with an “outperform” rating. The average is $126.44.
Others making changes include:
* Scotia Capital’s Michael Doumet to $125 from $122 with a “sector outperform” rating.
“For the better part of 2021 and 2022, equipment supply was constrained, dealer inventories were low, backlogs rose (to record levels), and pricing dynamics were favorable. Late in the 2H22 and into 1Q23, supply chains eased and new equipment availability improved,” said Mr. Doumet. “As end-user demand remains healthy, TIH was able to deliver on all fronts: higher volumes with favorable price/cost, compounded by operating leverage. The result was two consecutive big beats (1Q EPS beat by more than 30 per cent; 4Q beat by 21 per cent). Naturally, we expect similar trends to spill over into 2Q, but for 2H23 EPS growth should moderate. We raised our 2023E/24 EPS by 8 per cent/5 per cent.
“Into 2H23 and into 2024, we expect several puts and takes to play out: positives include, strong sales growth/margin performance in product support, increased (high-margin) rental dispositions, and historically strong SG&A rate; negatives include, normalizing equipment, used, and rental margins and tough comps for new equipment deliveries.”
* CIBC’s Jacob Bout to $115 from $113 with a “neutral” rating.
“TIH posted solid Q1/23 results, driven by strong new equipment and product support sales and margins,” said Mr. Bout. “That said, backlog levels are down sequentially (fourth consecutive quarterly decline) as bookings return to pre-pandemic levels amid more caution from customers in the current macro environment. After an extensive CEO search, TIH has selected Michael McMillan (current CFO) to be the next CEO. We believe this change will be viewed positively by both internal and external stakeholders, and from an operational and M&A perspective. At ~20x forward P/E, we still think that valuation is stretched relative to where we are in the cycle.”
* RBC’s Sabahat Khan to $133 from $131 with an “outperform” rating.
* BMO’s Devin Dodge to $124 from $118 with an “outperform” rating.
After making further downward revisions to his estimates ahead of the May 11 release of its first-quarter results, Canaccord Genuity analyst Aravinda Galappatthige downgraded VerticalScope Holdings Inc. (FORA-T) to “speculative buy” from “buy” previously.
“Our surveillance of advertising conditions, including insights from recently reported companies, are suggesting further downside for entities like VerticalScope, particularly in Q1/23,” he said. “We believe that the SVB issue and follow on concerns around the banking sector likely caused some advertisers to pull back spend, particularly those at the smaller end of the spectrum and those backed by VCs.”
For the quarter, Mr. Galappatthige is now projecting revenue of $28.3-million and adjusted EBITDA of $3.3-million, down 28.3 per cent and 55 per cent year-over-year, respectively. His full-year 2023 estimates slid to $71.2-million and $23.5-million from $79.1-million and $27.7-million.
“During the Q4/22 call, management alluded to a recovery in trends by Q2, led by a couple of its new initiatives around video advertising formats and enhancements to programmatic technologies,” he said. “Management also stated: ‘we think Q1 will be a trough for the business as we are starting to see encouraging signs for many of our direct accounts that their pullback is temporary and spending will pick up in Q2 and for the balance of 2023.’ We believe the key for the stock is the extent to which this position is maintained.
“Having held up quite well in Q2/22, VerticalScope’s digital ad revenues have experienced a rapid degradation in reaction to macro conditions. We estimate the organic decline went from 2 per cent in Q3/22 to 16 per cent in Q4/22; and we now expect a decline of 30 per cent in Q1/23. Given the steepness of this curve, we would be looking for some updated commentary around the prospect of stabilization.”
The analyst dropped his target to $6.50 from $11. The average is $10.36.
“In light of the downward revisions to our estimates and a further 1 times cut to our target multiple from 6.5 times to 5.5 times (2024 estimates) to reflect valuations of comps and increased uncertainty around the near-term outlook, we have reduced our target ... The sizable cut is partly due to magnifying impact of the net debt balance, which tends to squeeze the equity value on even moderate multiple reductions,” he said. “We have also opted to move our recommendation to SPEC BUY (from BUY) to reflect what we see as higher-risk conditions in the near-term and await greater clarity on revenue trends.”
In a separate note, Mr. Galappatthige upgraded EMERGE Commerce Ltd. (ECOM-X) to “speculative buy” from “hold” with a 14-cent target.
Canadian companies were “the stand-outs” in first-quarter earnings season for North America’s railway sector, according to RBC Dominion Securities analyst Walter Spracklin.
“Key for rail investors from Q1 reporting was growth prospects and the extent to which these prospects can offset near-term macro headwinds as well as drive long-term volume outperformance,” he said in a note released Monday.
“On this basis we view the Canadian rails as best positioned. CP stood out to us due to higher exposure to bulk and business wins (auto and intermodal), which we expect to act as an offset to near-term freight volume headwinds; and longer-term we view the opportunity surrounding the KCS integration as providing a platform for growth outperformance over the next decade. Key is that after normalizing for growth CP valuation in our view does not reflect the meaningful long-term opportunity we see resulting from the KCS integration. We also point to CN’s growth prospects, which we view as solid in the near-term versus the U.S. rails due to the company’s exposure to bulk. Longer-term we see opportunity for outperformance from Prince Rupert and Halifax. Both CN and CP have upcoming investors days which in our view are likely to be positive catalysts. On the other hand, we see the U.S. rails as being more affected by nearterm volume headwinds and do not view the U.S. rails as having the same company specific growth opportunities, in addition to being more exposed to thermal coal, which we view as in secular decline, versus the Canadian rails.”
Mr. Spracklin sees a “positive” direction of sentiment toward Canadian National Railway Co. (CNR-T), calling its performance “impressive.”
“Q1 results were positive in our view, despite the negative share price reaction, as Q1 EPS was up the most year-over-year versus peers (against easy comps however) and came in ahead of street expectations,” he said. “The results highlighted in our view a very fluid network, which we view as having opened up meaningful capacity on the company’s network. In terms of guidance, CNR stood out in terms of giving specific EPS guidance and increasing it, impressive in our view in the current macro environment (2023 consensus EPS increased 100 basis points post Q1, or second best in the group). We have a very positive view on CN’s long-term opportunity out of Prince Rupert and Halifax, and view the company’s upcoming Investor Day, during which we expect management to profile this opportunity, as a positive catalyst for the shares.”
He reaffirmed an “outperform” recommendation and Street-high $184 target for CN shares. The average is $161.79.
Seeing sentiment toward Canadian Pacific Kansas City Ltd. (CP-T) as “neutral” following the quarter, Mr. Spracklin kept an “outperform” rating and $122 target, which exceeds the consensus of $118.48.
“Q1 results were below; however, Q1 is of little concern in our view ahead of the KCS integration,” he said. “On the outlook, management pointed to advantageous exposure to bulk (Grain, Potash, Coal) and new business wins (Auto and Intl Intermodal). Longer-term, management highlighted recent wins with Schneider and Knight-Swift as examples of the opportunity to drive new business with the improved reach of the combined CPKC network. Next up will be added financial disclosure with proforma financials followed by Investor Day in late June. No change to our high conviction post Q1.”
Scotia Capital’s George Doumet continues to be bullish on food processors, expecting “abatements in many of the headwinds that have impacted the group (negative commodity markets, lagging price/cost spreads, supply chain bottlenecks, significant investments in inventory, etc.).”
Ahead of earnings season for the group, which he prefers over grocers, he reaffirmed Premium Brands Holdings Corp. (PBH-T) as his top pick, raising his target for its shares to $121 from $114 with a “sector outperform” rating. The average is $116.20.
“Premium Brands has had the highest year-to-date return among the three – as top line/margins have performed well against a challenging backdrop,” he said. “Looking ahead, we see additional room for upside driven by a re-acceleration in organic growth and margin normalization (with a likely uptick as input costs continue to deflate). PBH shares are currently trading at 10-per-cent discount (on EV/EBITDA) vis-à-vis its historical average. PBH’s five-year plan of generating 9.6-per-cent annual organic top line growth is ambitious (but doable, in our view) – and we view the company’s adj. EBITDA margin target of 10 per cent as overly conservative (we believe they can get closer to 12 per cent or more).”
He also increased his target for Maple Leaf Foods Inc. (MFI-T), his No. 2 pick, to $33, above the $32.33 average, from $30 with a “sector outperform” rating.
“Maple Leaf’s margin recovery has checked back meaningfully, driven by a NA Pork Complex that is seeing multi-year low processing margins and a Japan export market that is under significant pressure,” said Mr. Doumet. “We therefore expect more of the margin improvement to be driven by internal sources, such as the ramp-up of the Poultry plant (expected in 2H). We expect the NA pork complex to improve, but timing is tough to predict at this point. We have recently seen announcement for capacity reductions both in Canada and the U.S. With the expectation of FCF generation to progressively improve and with a pathway for adj. EBITDA to double from today by 2024, we see current valuation (8 times EBITDA on our 2024 estimate – vs. a historical average closer to 9.5 times) as too punitive. As such, we see significant upside potential over the medium to longer term.”
Meanwhile, the analyst maintained a $39 target and “sector perform” for Saputo Inc. (SAP-T). The average is $42.50.
“For Saputo, the margin recovery started well ahead of MFI and PBH and was aided by the abatement of negative commodity spreads (which started as early as Q1/F23 or mid-2022 calendar year),” he said. “For the quarter, we expect a continued recovery underpinned by a cheese/milk spread rebound, improved pricing, higher fill rate, and lower vacancy. With shares trading in line with the historical average, we view the shares as fairly priced given the limited visibility around optimization initiatives that aim to reach $2.125-billion of EBITDA by F25. That said, we expect an update (with Q4 results) on the Strat Plan, including the potential upsizing of the optimization initiatives, which we estimate is currently running at $240-million in annual savings.”
In other analyst actions:
* Touting its “remarkable financial recovery” in recent months, BMO’s Jackie Przybylowski resumed coverage Iamgold Corp. (IAG-N, IMG-T) with an “outperform” rating from “market perform” previously with a US$3.25 target, rising from US$2. The average is US$3.12.
* BMO’s Tamy Chen raised Canopy Growth Corp. (WEED-T) to “market perform” from “underperform” with a $1.70 target, down from $2.50 and below the $3.36 average.
* Veritas Investment Research’s Dan Fong upgraded Imperial Oil Ltd. (IMO-T) to “buy” from “sell” and hiked his target to $73 from $61. The average is currently $79.22.
* Veritas’ Darryl McCoubrey downgraded Canadian Utilities Ltd. (CU-T) to “reduce” from “buy” previously, keeping a $38.50 target, which falls below the $39.78 average.
* CIBC World Markets’ Hamir Patel upgraded Canfor Pulp Products Inc. (CFX-T) to “outperformer” from “neutral” with a $3.50 target. The average on the Street is $4.15.
“With Canfor Pulp recently falling below $2 per share for the first time since May 2009, we believe current levels represent an attractive entry point. At the same time, the depressed share price increases the likelihood that Canfor (which owns 54.8 per cent of CFX) may look to acquire the whole business,” he said.
* TD Securities’ Greg Barnes bumped his Cameco Corp. (CCO-T) target to $51 from $50, keeping an “action list buy” recommendation, while Raymond James’ Brian MacArthur raised his target to $50 from $48 with an “outperform” rating. The average is $48.67.
“We believe Cameco provides investors with lower-risk exposure to the uranium market given its diversification of uranium sources,” said Mr. MacArthur. “These sources are supported by a portfolio of long-term contracts that provide some downside protection in periods of depressed spot uranium prices, while maintaining optionality to higher uranium prices. In addition, the company has multiple operations curtailed that can be brought back should uranium prices increase. Although the 2021 tax court decision applies only to the 2003, 2005, and 2006 tax years, we view it as a positive for CCO given we believe it will be relevant in determining the outcome for other years and reduces risk related to the CRA dispute.”
* Jefferies’ Lloyd Byrne cut his target for Cenovus Energy Inc. (CVE-T) to $33 from $35 with a “buy” rating. The average is $30.57.
* While predicting its operational performance is “set to improve throughout the year,” National Bank Financial analyst trimmed his Copper Mountain Mining Corp. (CMMC-T) target to $2.60 from $2.65 with a “tender” recommendation following the release of in-line first-quarter results. The average target is $2.68.
“Mill feed grades, throughput and recoveries are expected to improve throughout the year as Q1 was impacted by downtime associated with the December ransomware attack and a mechanical failure of the reclaim water barge,” he said. “With an alternative water pumping system installed in March and process control systems fully restored as of quarter end, the processing plant is expected to operate smoothly and benefit from increasing grades from the North pit.”
“We continue to recommend voting in favour of the transaction with Hudbay Minerals Inc. (HBM:TSX, $9.25 Target, Sector Perform) and do not anticipate any additional bidders for CMMC given the bilateral negotiation process and opportunities provided by the combined portfolio in terms of delivering nearterm operational improvements and providing longer-term optionality/asset diversification.”
* CIBC’s Krista Friesen raised her Exchange Income Corp. (EIF-T) target to $62 from $59 with an “outperformer” rating. The average is $63.91.
“With Q1 results we expect the company to provide an update on its M&A pipeline as well as commentary around its two most recent acquisitions (BVGlazing, which has yet to close, and Hansen Industries). We have tweaked our estimates to better reflect the seasonality of EIF’s growing business,” she said.
* National Bank’s Jaeme Gloyn increased his First National Financial Corp. (FN-T) target to $39 from $37 with a “sector perform” rating, while BMO’s Etienne Ricard raised his target to $39 from $36 with a “market perform” rating. The average is $39.33
“While the predictably unpredictable funding mix helped drive the meaningful EPS beat, we view Q1 as a solid quarter in the face of extremely weak housing market (and origination) activity,” Mr. Gloyn said. “Particularly given expanding securitization balances and NIM. But, not solid enough to move us off our Sector Perform rating given a significant trading premium vs. Big Six banks. Overall, we expect the shares to trade favourably on Monday.”
* CIBC’s Dennis Fong increased his Suncor Energy Inc. (SU-T) target to $62 from $60, keeping an “outperformer” rating. The average is $53.28.