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

An “uneven” operating performance and consumer concerns continue to weigh on Canadian Tire Corp. Ltd. (CTC.A-T), according to National Bank Financial analyst Vishal Shreedhar, who expects looming mortgage renewals to pressure spending even further moving forward.

“Our analysis indicates incremental consumer pressure on disposable income to more fulsomely manifest over the next several years as Canadians renew their mortgage,” he said. “Media reports have indicated that over $300-billion in mortgages are expected to be due for renewal in each of the next two years (we estimate $326-billion in 2024 and $362-billion in 2025). We estimate incremental disposable income pressure of $600+ per month for those renewing from 2024 through 2026 (forward mortgage rates extrapolated from the B.C. Real Estate Association outlook).”

In a research report previewing the retail’s Nov. 9 third-quarter earnings release, Mr. Shreedhar said he expects to see “muted” retail sales, “reflecting cautious consumer behaviour.”

“Recent consumer credit trend reports published by major credit bureaus indicate increasing financial pressure (fewer consumers able to pay off their monthly credit card balance in full and an increase in the average balance across credit products, etc.),” he said. “Nonetheless, one major credit bureau observed that 90+ days balance delinquencies for credit cards remain below Q2/19 levels, suggesting that the frequency of missed payments is not rising as rapidly as expected.

“We understand that promotional intensity steepened year-over-year and that promotional intensity is expected to remain high through the remainder of the year. We expect higher promotional intensity and consumer prioritization of essentials to pressure earnings, offset by lower freight costs, efficiency initiatives, leveraging of Triangle loyalty customer data, etc.”

Mr. Shreedhar is projecting earnings per share of $3.70 for the quarter, sitting 5 cents higher than the consensus forecast on the Street and up from $3.34 in fiscal 2022. He said that 10.9-per-cent year-over-year increase reflects share repurchases and an accounting adjustment from a change in the margin-sharing agreement (MSA). Without that MSA change, his EPS estimate would be $2.65, or down 20.4 per cent year-over-year.

“Our review of select peer commentary ... suggests the following: (i) More selective consumer spending; (ii) Moderation in big-ticket discretionary purchases; and (iii) Cautious near-term expectations given an uncertain macroeconomic backdrop,” he said.

After reducing his full-year 2023 and 2024 EPS forecast to $14.71 and $16.83, respectively, from $15.20 and $17.43, Mr. Shreedhar cut his target to $166 from $185 to reflect a lower valuation multiple “given building consumer pressure.” The average target on the Street is $181.80, according to Refinitiv data.

“We see more attractive opportunities elsewhere in our coverage as a softening of consumer demand, cautious, uneven operating performance, and an uncertain macroeconomic backdrop keep us on the sideline,” he said, maintaining a “sector perform” recommendation.


ATB Capital Markets analyst Chris Murray expects Air Canada (AC-T) to report a “significant” increase in passenger volumes and profitability from the same period a year ago when it releases its third-quarter results on Oct. 30, pointing to “demand remaining strong through the peak summer season.”

“Although jet fuel prices increased materially throughout the quarter and have weighed on sentiment across the sector, AC hedged 30 per cent of expected Q3 consumption at lower prices, which we expect to support the margin profile,” he said. “We will be looking for updates on demand conditions heading into 2024, particularly for business travel after management anticipated a step-up in traffic levels post-Labour Day; labour negotiations; and timing with regard to new capacity. We remain constructive on AC at current valuations and see a resilient demand environment mitigating the impact of more challenging macro conditions.”

Raising his forecast through 2024, Mr. Murray expects Air Canada to deliver 13 per cent year-over-year revenue growth, led by strength in its Atlantic and Domestic businesses as “demand conditions look intact.”

“To help track the recovery, we monitor weekly aircraft movements (departures and arrivals) across major Canadian airports as well as security screening data for Canada’s large airports,” he said. “Aircraft movement data is released weekly, beginning in December 2019, with the latest observations available for the week of September 16-23. Although this captures all aircraft movements, not just Air Canada, and each movement does not reflect aircraft gauge, we still see the data as instructive, with a significant recovery in transborder since early 2022 and a sharp rise in international volumes in 2023, despite a more challenging economic backdrop. Recent data indicate that volumes continued to trend upward in Q3/23. The data is consistent with recent passenger traffic levels reported by the Canadian Air Transit Security Authority (‘CATSA’) with traffic levels strengthening and coming in 1.5 per cent above Q3/19 levels in Q3/23, a trend we expect to extend into Q4/23 and 2024.”

Maintaining an “outperform” recommendation for Air Canada shares, Mr. Murray trimmed his target to $35 from a previous Street-high of $38, “largely on expectations of higher net debt levels in 2024.” The average target is $30.77.

“We continue to expect travel demand to remain strong, led by the domestic and leisure markets, with a recovery in business travel continuing in H2/23 and into 2024, with constructive commentary from U.S. peers reinforcing our outlook,” he said. “Management has remained positive on the near-term booking curve in 2023, noting that capacity is expected to return to 100 per cent of 2019 levels in 2024, which is in line with our expectations for a return to more normalized industry conditions.”


Citi analyst Steven Enders sees “a clear path to monetization” for Open Text Corp.’s (OTEX-Q, OTEX-T) expanding artificial intelligence capabilities.

The Waterloo, Ont.-based firm released its latest version of its Cloud Editions platform, which forms the core of its AI product strategy, at its OpenText World 2023 event in Las Vegas last week.

“We come away impressed by emerging AI capabilities for secure Information Management across Content and Business Network use cases,” said Mr. Enders. “Additionally, our conversations with MFGP partners and customers were constructive on the investments OTEX is making and the initial product synergies with cross-sell potential. We come away more optimistic on estimate upside with AI likely additive to the MT model.”

In a note released late Friday, Mr. Enders introduced his fiscal 2026 financial projections, including revenue of US$6.32-billion, up from an estimated US$6.12-billion in 2025, and 24-per-cent free cash flow margin, rising from 20.3 per cent. He also emphasized upside potential based on the success of its AI initiatives.

Maintaining a “neutral” recommendation for Open Text shares, he trimmed his target to US$38 from US$44 to reflect a valuation update to fall in line with peers. The average on the Street isUS$49.30.

“We see OpenText’s recently closed acquisition of Micro Focus likely remaining an overhang on the stock until OpenText is able to make changes to Micro Focus’ operations and executing the Open Text playbook to drive better renewals and leverage,” he said. “Yet, we believe the acquisition and Micro Focus’ declining revenue base will likely remain a point of focus until the acquisition closes in CY23 and distract from OpenText’s cloud and MSP investments until Micro Focus potentially returns to growth in CY24 from OpenText investments. While we believe the acquisition could ultimately prove successful, we see a challenging narrative until OpenText’s strategy can begin to take shape which we expect will take more than a year to play out.”


Stifel analyst Alex Terentiew expects Teck Resources Ltd. (TECK.B-T) to continue to see significant near-term boost for soaring coal prices.

“Since the end of Q2, Australian premium hard coking coal (HCC) prices have risen sharply, up a whopping 57 per cent, solidly outperforming most other commodities and equities,” he said. “While U.S.-listed coal miners with varying amount of coking coal exposure are up an average of 38 per cent over the period, Teck’s share price is down 8 per cent, underperforming even the price of copper (down 3 per cent), and more in-line with the weak performance of its copper-focused peers like Freeport and Lundin.

“With a sale of Teck’s met coal division pending, we expect the stock to eventually disconnect from met coal price moves, but the magnitude of this disconnect we think is too large and represents a buying opportunity for investors.”

In a research report released Monday, Mr. Terentiew said he now sees upside for coal prices of $130 per ton, or more than $4-billion in annual EBITDA gains, which he emphasized is not reflected in either his estimates as well as the expectations on the Street.

“Our 2024 met coal price forecast of $225 per ton we view as too low, with consensus prices (as per Bloomberg on Oct. 13) similar, averaging $219-$228 per ton,” he said. “At an annual run rate of 25 Mt, the incremental impact to EBITDA from the recent rally equates to more than $4-billion in EBITDA, a significant lift that we believe is not accounted for in Teck’s share price.”

“While Teck is behind on its typical met coal sales and pricing disclosure this quarter, we are updating our estimates to reflect our forecast for the quarter. We have trimmed our sales forecast to the bottom end of quarterly guidance (5.6-6.0 Mt), and bumped our realized coal price to $222 per ton (from $218 per ton ).”

Mr. Terentiew expects the Vancouver-based mining company to continue with the plan to exit its coal business, believing a sale to a consortium of buyers is likel. However, he warned “the ultimate after-tax value received for shareholders to be less than the $11.5-billion price originally implied in Teck’s February spin-out proposal.”

“Assuming a deal is made by year-end 2023, we anticipate 3-6 months may be required to obtain all the regulatory approvals for a deal to close, putting Teck in a position to trade as Teck Metals (met coal-free) by mid-2024,” he said. “While met coal prices are well above our forecast, we acknowledge that our copper price forecast of $4.25 per pound is looking high, with spot now at $3.60 per pound.”

Now assuming a minimum sale price of $9-billion, or approximately $17 per share, Mr. Terentiew raised his target for Teck shares to $71 from $68, keeping a “buy” recommendation. The current average is $68.14.

The long-term bullish outlook for copper, combined with Teck’s copper-focused growth profile and strong cash flow coming from metallurgical coal, has created an ideal scenario for Teck, and one that we believe the investing market has not yet adequately appreciated,” he said. “Today’s coal driven cash windfall is ideally timed to redeploy funds into the company’s cornerstone copper growth project, QB2, and ultimately support enhanced returns to shareholders and redeployment of additional funds to more copper growth. We expect that a ramp-up of QB2 in 2023 will establish Teck as a significant global copper producer, which in combination with its other growth opportunities, should provide several catalysts to generate incremental value over the coming years. With approximately 60 per cent of NAV derived from Canadian and U.S. mines, Teck also carries a relatively low jurisdictional risk.”


Pointing to “a surging crude oil price environment and an attractive natural gas price futures outlook,” Stifel analysts Cody Kwong and Michael Dunn thinks the landscape for Canadian energy exploration and production should “continue to screen as attractive versus other sectors given the production/cash flow growth, unfettered balance sheets, exciting new play extensions/technical applications and elevated return of capital to shareholders.”

In a research report released Monday previewing third-quarter earnings season, the analysts sees tailwinds for both oil and gas prices, and they do not expect any significant changes to 2023 guidance “aside from possible 2024 capex acceleration into 2023.”

“In general, our channel checks did not prompt us to make any meaningful changes to our overall 2023 production view, however cash flow did move approximately 1 per cent lower as we dialed in our cost/realized pricing assumptions ahead of the 3Q23 earnings season,” they said. “As for capital expenditures, most companies have migrated to the high-end of the guidance ranges, with more than a few names expected to accelerate some 2024 activity into the remaining months of 2023, which should be partially covered by higher than previously anticipated 2H23 cash flow.

“Catalysts and rate of change continues to be expected to drive stock outperformance. We expect a host of operational and financial catalysts to unfold between now and the end of the year. Those we expect to have news on the subject of return of capital includes names like: CNQ, VET, BNE, HWX, HHRS, and TVE. The companies we are expecting meaningful drilling results or operational step changes include: POU, HWX, HHRS, KEL, RBY, and LGN.”

Mr. Dunn downgraded Arc Resources Ltd. (ARX-T) to “hold” from “buy,” saying " the stock has been a significant outperformer this year, leaving diminished returns to our unchanged target, while our cash flow forecast moves lower.”

His target for Arc shares remains $23. The average on the Street is $24.53.

The analysts’ target changes for large and intermediate cap E&P companies are:

  • Canadian Natural Resources Ltd. (CNQ-T, “buy”) to $99 from $97. The average on the Street is $95.95.
  • Paramount Resources Ltd. (POU-T, “buy”) to $41 from $39. Average: $39.
  • PrairieSky Royalty Ltd. (PSK-T, “buy”) to $27.50 from $27.25. Average: $25.63.
  • Parex Resources Inc. (PXT-N/PXT-T, “buy”) to US$37.50 from US$39. Average: $36.08 (Canadian).
  • Tourmaline Oil Corp. (TOU-T, “buy”) to $78 from $77. Average: $81.53.
  • Topaz Energy Corp. (TPZ-T, “buy”) to $25.25 from $24.75. Average: $27.52.
  • Vermilion Energy Inc. (VET-T, “buy”) to $27 from $28. Average: $25.25.


Analysts at CIBC World Markets made a series of target price changes to stocks in Canada’s energy sector on Monday.

“We expect Q3 results should be a relatively strong print for the sector, and believe those companies that announce 2024 plans will have budgets that remain grounded in capital discipline and shareholder returns,” the firm said. “H2/23 has tilted firmly in favour of oil-weighted producers. Supply cuts out of OPEC and a Middle Eastern premium set up for increased shareholder returns and debt repayment, but increased cash flows may spur slightly higher spending levels in 2024. With natural gas storage levels around the globe entering winter above the five-year average, we believe natural gas prices are likely to remain rangebound in the near term, and we maintain a bias for liquids-weighted producers. Our top ideas include CVE, CPG, HHRS, LGN, and NVA.”

Denis Fong increased his targets for these stocks:

  • Canadian Natural Resources Ltd. (CNQ-T, “outperformer”) to $95 from $93. The average on the Street is $95.95.
  • Cenvous Energy Inc. (CVE-T, “outperformer”) to $32 from $31. Average: $31.85.
  • Crescent Point Energy Corp. (CPG-T, “outperformer”) to $15 from $14.75. Average: $14.25.
  • Imperial Oil Ltd. (IMO-T, “neutral”) to $85 from $76. Average: $84.
  • MEG Energy Corp. (MEG-T, “neutral”) to $27 from $23. Average: $28.46.

Jamie Kubik raised his targets for these companies:

  • Enerplus Corp. (ERF-N/ERF-T, “outperformer”) to US$23 from US$22. Average: US$25.81.
  • Ensign Energy Services Inc. (ESI-T, “neutral”) to $4 from $3.50. Average: $4.93.
  • Kelt Exploration Ltd. (KEL-T, “outperformer”) to $9 from $8.75. Average: $8.88.
  • Secure Energy Services Inc. (SES-T, “neutral”) to $8 from $7.50. Average: $9.13.

Mr. Kubik cut his target prices for these stocks:

  • Enerflex Ltd. (EFX-T, “neutral”) to $8.50 from $11.25. Average: $12.17.
  • Freehold Royalties Ltd. (FRU-T, “neutral”) to $16.50 from $16.75. Average: $19.13.
  • Nuvista Energy Ltd. (NVA-T, “outperformer”) to $15.75 from $16. Average: $15.71.
  • Paramount Resources Ltd. (POU-T, “neutral”) to $40 from $42.50. Average: $39.
  • Topaz Energy Corp. (TPZ-T, “outperformer”) to $26.50 from $26.75. Average: $27.52.


Scotia Capital analyst Jason Bouvier thinks “years of underinvestment and continued capital discipline have laid the groundwork for a structurally positive view of Canadian commodity prices.”

“We expect the WCS differential to continue to narrow beyond 2023, due to lower refining downtime, added pipeline capacity, and new heavy oil refining capacity coming online,” he said. “As for condensate, we expect prices to strengthen in H2/23 due to higher diluent requirements exiting the turnaround season. With the global refinery complex in max distillate mode, we expect strong SCO demand, given the higher distillate yield.”

In a research report released Monday, he made a series of target price changes to Canadian energy stocks after the firm raised its oil price projections, believing “the global oil market in the near term will be driven by Saudi Arabia’s aggressive management of prices.”

“We now assume Saudi Arabia’s latest 1 million barrels per day of temporary cut will be extended at least through the 1Q24 and likely through 2024 or 2025,” said Scotia. “We think demand growth will start to normalize in 2024. We expect demand from OECD countries will be flat to slightly declining over the next several years while China demand growth rate will slow drastically.

“We are raising our Brent price forecast for 4Q23 to $92 per barrel, and for 2024 to 2025, we are increasing prices to $85/bbl; we maintain our long term target unchanged at $65.0/$60.5 per barrel for Brent/WTI, respectively. We think Saudi Arabia could begin to face more challenge in their grip of the market by 2026/2027 and forecast prices could decline to $75/bbl by 2026 and then to $65/bbl in 2027 and 2028.”

Mr. Bouvier’s changes are:

  • Baytex Energy Corp. (BTE-T, “sector perform”) to $6.75 from $6. Average: $7.46.
  • Canadian Natural Resources Ltd. (CNQ-T, “sector perform”) to $90 from $86. Average: $95.95.
  • Cenovus Energy Inc. (CVE-T, “sector outperform”) to $31 from $30. Average: $31.85.
  • Enerplus Corp. (ERF-T, “sector perform”) to $25 from $23. Average: $24.06.
  • Freehold Royalties Ltd. (FRU-T, “sector perform”) to $18 from $17. Average: $19.13.
  • Imperial Oil Ltd. (IMO-T, “sector outperform”) to $83 from $76. Average: $84.
  • International Petroleum Corp. (IPCO-T, “sector perform”) to $17 from $16. Average: $17.30.
  • MEG Energy Corp. (MEG-T, “sector outperform”) to $27 from $28. Average: $28.38.
  • Ovintiv Inc. (OVV-N/OVV-T, “sector outperform”) to US$53 from US$49. Average: US$57.85.
  • PrairieSky Royalty Ltd. (PSK-T, “sector perform”) to $25 from $22. Average: $25.63.
  • Suncor Energy Inc. (SU-T, “sector perform”) to $47 from $44. Average: $52.97.
  • Vermilion Energy Inc. (VET-T, “sector perform”) to $23 from $22. Average: $25.32.
  • Whitecap Resources Inc. (WCP-T, “sector perform”) to $13 from $12. Average: $14.40.


BMO Nesbitt Burns analyst Nevan Yochim initiated coverage of High Liner Foods Inc. (HLF-T) with a “market perform” recommendation, expecting a weak macroeconomic environment to limited near-term demand for frozen seafood.

“Recent volume declines in the retail business have been driven by reduced demand for protein as consumers substitute out of frozen seafood and into lower cost meal alternatives,” he said. “Management expects retail volume headwinds to persist through Q3/23 and into Q4/23 as elevated inflation and high interest rates are leading to consumer price sensitivity.”

Despite those significant near-term headwinds, Mr. Yochim said he sees a “long runway for growth” for the Lunenburg, N.S.-based company.

“In the foodservice business, opportunities include introducing innovative products into the underpenetrated quick-service restaurant category, driving growth in ready-to-use frozen product in the casual dining category, and expanding the value-added product portfolio in high-growth shrimp and salmon species,” he said. “In the retail business, we expect High Liner Foods to focus on growing its share of the fragmented U.S. market via promotional activity, new product launches, and potentially tuck-in acquisitions. Longterm supply/demand dynamics in the North American seafood industry provide a supportive backdrop.

“We forecast organic revenue and adjusted EBITDA declines in H2/23 followed by moderate growth in 2024. Based on our expectation for lower retail volumes and deflationary pricing in H2/23E, we forecast organic revenue declines 0.5 per cent year-over-year and adjusted EBITDA declines 3.3 per cent year-over-year. In 2024, we expect improving retail volumes to be partially offset by lower pricing and lead to a 0.8-per-cent year-over-year increase in organic revenue growth. We forecast adj. EBITDA margins expand 20 basis points year-over-year to 9.4 per cent in 2024 and adj. EBITDA increases 4 per cent year-over-year.”

Mr. Yochim set a target for High Liner shares of $12, below the average on the Street of $16.

“The stock is down 20 per cent year-to-date and trades towards the bottom end of its historical valuation range, reflecting a weak macro backdrop that is reducing consumer demand and earnings,” he said.

“High Liner Foods trades at 5.5 times 2024 estimated EV/EBITDA, below its historical average of 7.4 times NTM [next 12-month] EV/EBITDA and peers at 8.0 times. Over time, we believe there is an opportunity for multiple expansion as headwinds abate and High Liner Foods demonstrates its organic growth potential.”


In a research report on North American utilities titled Buckle Up, This Might Be a Bumpy Ride, Scotia Capital analysts Andrew Weisel and Robert Hope said they are curbing “some enthusiasm” and “taking a more balanced view vs. [a] previously bullish stance.”

“The impact of steadily rising interest rates shifted from being negative to sentiment/valuations (indirect) to potentially weighing on earnings growth (direct). In addition to higher debt costs, lower stock prices make equity more dilutive,” they said. “We worry that capex/rate base growth may temporarily moderate due to affordability and balance sheet concerns. We trim our near-term EPS estimates, but expect growth to re-accelerate in 2025+. We reduce our sector anchor multiple to 15.0 times (from 16.0 times) and lower our targets by an average of 5 per cent (we still see a median upside of 20 per cent).”

For Canadian equities, Mr. Hope made these target changes:

  • Atco Ltd. (ACO.X-T, “sector outperform”) to $46 from $48. Average: $47.57.
  • Algonquin Power & Utilities Corp. (AQN-N/AQN-T, “sector perform”) to US$7 from $8. Average: US$8.79.
  • Canadian Utilities Ltd. (CU-T, “sector perform”) to $35 from $37. Average: $37.06.
  • Emera Inc. (EMA-T, “sector outperform”) to $54 from $57. Average: $58.15.
  • Fortis Inc. (FTS-T, “sector perform”) to $57 from $58. Average: $58.27.

“For our Canadian coverage, we move estimates lower for EMA-CA, FTS-CA, and AQN-US, while moving up estimates for CU-CA and ACO.X-CA given the recent GCOC decision in Alberta,” he said. “While the massive year-to-date underperformance (XLU down 16 per cent vs. S&P 500 up 13 per cent; Canadian median down 5 per cent vs. S&P TSX up 1 per cent) is largely a function of valuations (i.e., higher interest rates lessen the appeal of a utility stock’s dividend yield while EPS estimates have been quite stable), and, to a lesser degree, concerns about earnings pressures from the higher cost of refinancing debt, the latest leg down appears to be attributable to growing fears about the strength and resilience of utility companies’ balance sheets and their ability to support future capex. Of course, it’s all of the above, along with a laundry list of other concerns (higher interest expenses, pressures from general inflation, a pickup in severe weather including wildfires, etc.). But based on our most recent conversations with investors and corporates, it seems that many are growing increasingly concerned about companies’ abilities to attractively raise capital needed to finance spending and therefore drive rate base/earnings growth. The cost of debt and the cost of equity has increased notably in recent weeks. Additionally, affordability concerns remain and are only elevated by these higher financing costs. Average monthly electric bills have increased at a 5-per-cent-plus pace on a TTM [trailing 12-month] basis every month since June 2022, and have seen faster y/y growth than the CPI every month since last July (though encouragingly, the pace of y/y change in electric utility bills has moderated, similar to CPI, from a peak of 13.3 per cent in December to 6.3 per cent in July, the most recent data point). Average bills are 20 per cent higher than pre-pandemic levels. We’ve already seen some companies refer to balance sheet constraints limiting capex opportunities (AEP and BKH come to mind), and we expect we may see some more going forward (though companies will likely simply defer capex from 2023-2024 to later years rather than canceling it, which would preserve 3-5 year capex plans).”

“In Canada, we recommend ALA-CA and EMA-CA, though investors may prefer easy-to-execute funding stories in this environment (H-CA).”


In other analyst actions:

* Canaccord Genuity’s Roman Rossi initiated coverage of LNG Energy Group Corp. (LNGE-X), a Toronto-based company focused on natural gas production and exploration in Latin America that began trading on the TSX Venture Exchange on Sept. 12, with a “buy” recommendation and $1 target.

“LNG Energy is currently trading at approximately 1.8 times 2024 estimated EV/EBITDA, roughly in line with oil-weighted names,” he said. “Nevertheless, we believe that LNGE should trade at a premium similar to the gas-weighted names like Canacol and NG Energy. Furthermore, the premium gas pricing and the strategic relevance of the sector should act as a tailwind for the company.”

* Jefferies’ Dushyant Ailani lowered his target for Ballard Power Systems Inc. (BLDP-Q, BLDP-T) to US$4.50 from US$5 with a “hold” rating. The average on the Street is US$6.04.

* RBC’s Nelson Ng cut his Boralex Inc. (BLX-T) target to $36 from $42 with a “sector perform” rating. The average is $42.42.

“In light of the New York PSC’s decision to deny the subsidy increase requests for advanced renewable developments, we expect that Boralex will need to rebid 740 MW of uneconomic solar projects in New York State into future RFPs to secure higher prices,” he said. “We lower our price target ... mainly to reflect a reduction in the value we apply to the company’s development pipeline, as we expect developments with revenue contracts will have project returns that are under pressure.”

* Previewing its Oct. 25 quarterly release, CIBC’s Todd Coupland increased his Celestica Inc. (CLS-N, CLS-T) target to US$33, above the US$27 average on the Street, from US$25 with an “outperformer” rating.

“Its revenue and EPS growth is accelerating from a broadening set of drivers,” he said. “These provide increased confidence in our conservative forecast for 2023 and have prompted us to raise our 2024 forecast for adjusted EPS to $2.75 (prior $2.50) on higher revenue growth of 10 per cent (vs. 5 per cent prior).

“Trends are strong for Celestica’s business, particularly due to accelerating demand related to generative AI (GEN AI) within its Enterprise business (26 per cent of revenue) from hyperscalers like Google, Meta and Amazon. Order visibility is through the first half of 2024. Hyperscaler GEN AI plans for the second half of 2024 to serve as a catalyst with some plan updates expected by year-end.”

* Jefferies’ Brian Tanquilut cut his Dentalcorp Holdings Ltd. (DNTL-T) target to $11.50 from $15 with a “buy” rating. The average is $12.36.

* Ahead of its Nov. 2 earnings release, TD Securities’ Michael Van Aelst hiked his Parkland Corp. (PKI-T) target to $50 from $44, keeping a “buy” rating. The average is $44.73.

“The strengthened management team has adopted a renewed focus on operational excellence, cost containment, and deleveraging (accelerated by non-core asset divestitures),” said Mr. Van Aelst. “Combined, this should drive attractive earnings growth rates (exRefining), a 11-12-per-cent FCF yield, and leverage under 3 times by Q3/23. Despite the shares’ 34-per-cent return year-to-date, they are still trading at a conservative 6.8 times NTM [next 12-month] consensus EBITDA, leaving attractive incremental upside.”

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 29/02/24 3:59pm EST.

SymbolName% changeLast
Air Canada
Algonquin Power and Utilities Corp
Arc Resources Ltd
Atco Ltd Cl I NV
Ballard Power Systems Inc
Baytex Energy Corp
Boralex Inc
Canadian Natural Resources Ltd.
Canadian Tire Corp Cl A NV
Canadian Utilities Ltd Cl A NV
Celestica Inc Sv
Cenovus Energy Inc
Crescent Point Energy Corp
Dentalcorp Holdings Ltd
Emera Incorporated
Enerplus Corp
Ensign Energy Services Inc
Enerflex Ltd
Fortis Inc
Freehold Royalties Ltd
High Liner
Imperial Oil
International Petroleum Corp
Kelt Exploration Ltd
Lng Energy Group Corp
Meg Energy Corp
Nuvista Energy Ltd
Open Text Corp
Ovintiv Inc
Parkland Fuel Corp
Paramount Resources Ltd
Prairiesky Royalty Ltd
Parex Resources Inc
Secure Energy Services Inc
Suncor Energy Inc
Teck Resources Ltd Cl B
Tourmaline Oil Corp
Topaz Energy Corp
Vermilion Energy Inc
Whitecap Resources Inc

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