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

Raymond James analyst Michael Glen initiated coverage on Ballard Power Systems Inc. (BLDP-Q; BLDP-T) with a bullish “outperform” rating, calling the high-flying stock “a legitimate hydrogen industry leader in a sector on the cusp of receiving very significant and substantial investment dollars.”

He set a price target of US$28. The median price target among analysts is US$13.41, according to Refinitiv Eikon.

Ballard stock has soared 150 per cent so far this year, compared with about 16 per cent for the Nasdaq. And it’s expensive, trading at an enterprise value/revenue multiple of close to 30 times based on 2021 earnings estimates. But, “digging beyond valuation and understanding the drivers, what we find is an extremely compelling and unique multidecade growth opportunity in the stock,” Mr. Glen said in a note.

“The starting point for an investment in Ballard (and an investment in hydrogen) centers on the significant actions being taken by various governments with respect to controlling emissions and achieving long-term targets with respect to C02 emissions. Hydrogen’s role in meeting these targets will see the technology applied in certain segments of the market where battery-electric technology alone is deemed insufficient to meet the targets. Most importantly for Ballard, this will result in the application of hydrogen and hydrogen fuel cells in the heavy-duty motive market (i.e. bus/coach, medium and heavy-duty trucking, rail, marine), where the company is already a market leader. Importantly, such developments in the use of hydrogen are being heavily supported by government, and we would highlight the July 8 kickoff event for the European Hydrogen Alliance and ongoing developments in China with respect to hydrogen.”

“When we look at Ballard, and in working through the company’s relationships (in both Europe and China), strategic alignments, investment focus, and strategy, we see a company that is exceptionally well positioned to benefit as investment dollars are allocated towards hydrogen. The company already has an extremely high market share in the deployment of fuel cells in the commercial bus market (indicated at 75%), and is significantly advanced in the development of fuel cell stacks and a module to serve the rapidly emerging commercial truck market. Finally, as we examine the JV with Weichai Power in China, we see a very significant alignment with one of the largest diesel engine OEMs globally, whose parent company also owns two large China-based bus manufacturers and a large commercial vehicle manufacturer.”

“On top of what we view as a multi-decade growth opportunity in the stock, we also see the potential for several material near-term announcements pertaining to new orders, commercial developments, investments, and further government action. In terms of valuation, we are using an EV / Revenue multiple of 20x our 2023-2024E sales estimate, a multiple that is in-line with where European peers trade,” he added.


Citi initiated coverage on Shopify Inc. (SHOP-N; SHOP-T) with a “neutral” rating, believing the stock is nearly fully valued at current levels. He set a price target of US$998.

“While top-line drivers and trends are undeniably attractive with shelter in place fueling eCommerce demand, we believe shares leave little room for upside at 37x revenue, which we calculate embeds 32% organic 10-year compounded annual growth rate, a streak only ever achieved by Facebook,” Citi analysts, led by Walter Pritchard, said in a note.

Despite essentially a hold rating on the stock, Mr. Pritchard is more bullish than most on the Street, where the median target is currently $800, according to Refinitive Eikon data.

“eCommerce trends have been positive for some time and adoption drivers have been numerous across an expanding number of retail categories for some time. COVID-19 has likely accelerated this, as especially smaller brands, retailers and smaller businesses are relying on this as a primary channel. Our proprietary breakdown of the opportunity suggests that while the SHOP GMV (gross merchandise value) opportunity is likely ~5% of the $5.5 trillion U.S. retail market, the growing “direct to consumer” trend is a tailwind, as well as having long-term marketplace opportunity. International is also early stages, with $900 billion GMV worldwide TAM (total available market), well ahead of current $61 billion GMV,” he said in a note.

“With dual drivers of growth from merchant adds and GMV / merchant, we see high-growth likely to be sustained. Street estimates look low, on the back of accelerated “shelter in place”-driven adoption. Our numbers are above Street on the back of GMV. While merchant and GMV/merchant trends have been strong, we believe there is medium-term optionality on higher GMV take-rates with new services, although this has been elusive over the last 3-4 years as payments, partner apps and more recently shipping have rolled out,” he said.


Credit Suisse analyst Andrew Kuske initiated coverage of Inter Pipeline Ltd. (IPL-T) with a “neutral” rating and C$14 target price. But he’s advising investors the keep the stock in mind for future buying opportunities, even after its recent dividend cut, commenting “severe pressure on the shares over the past few years could create a potentially interesting positioning.”

“The root cause of IPL’s stress is the Heartland Petrochemical Complex (HPC) project, which is focused on a multi-billion dollar Propane Dehydrogenation/Polypropylene (PDH/PP) facility,” Mr. Kuske said in a note. “Capital expenditure timing, commodity prices, and, among other things, the effects of the COVID-19 pandemic collectively contributed to the March dividend reduction.”

“In Canada’s broad infrastructure universe, outright dividend/distribution reductions tend to be relatively rare occurrences but could provide opportunities for longer-term investors. We believe that IPL’s path to execute a partial HPC sale and the successful commissioning are key to future dividend increases and eventual re-rating of the shares. However, in terms, of the risk/reward, these potential positives are just slightly beyond our investment horizon,” he said.

The median price target is $12.


Canaccord Genuity analyst T. Michael Walkley hiked his price target on Apple Inc. (AAPL-Q) to US$444 from $390.90.

“Apple is well-positioned to benefit from the long-term 5G investment cycle and we anticipate recovering earnings in 2H/C20 and C2021 as 5G smartphones ramp, the installed base of users grows, and ecosystem services and adjacent hardware sales benefit,” he wrote.

Mr. Walkley cited a strengthening ecosystem that will deliver strong attach rates for multiple hardware purchases. “Ahead of the COVID-19 shock to global economies, we were encouraged by the strong demand for the iPhone 11 lineup and believe Apple will maintain its market share leadership of premium-tier smartphones that should expand with its iPhone 12 lineup supporting 5G along with other strong features."

Apple’s strong leading position in sales of watches and AirPods, as well as its strong balance sheet with $83-billion in net cash, put it in a position for long-term growth, the analyst wrote. “With the 5G upgrade cycle a likely catalyst in F2021 and continued business mix shift towards high-margin Services, we reiterate our BUY rating...”

The median Street target is US$325.


Canaccord Genuity analyst Doug Taylor raised his price target on Mogo Finance Technology Inc. (MOGO-T; MOGO-Q) to $4 from $3, citing better-than-expected second quarterly results.

“Beyond the strong financial performance in the quarter, we believe that the positive commentary around the performance of the loan book is driving this relief rally in the shares,” Mr. Taylor wrote about the jump in Mogo shares in the wake of the release of the company’s preliminary second quarter financial results Thursday morning.

“We believe that, as credit concerns around the loan portfolio lift, investors will be able to focus on the growth opportunities ahead, including the roll-out of the MogoSpend product to its 1M+ member base.”

He maintained his “speculative buy” rating on the stock and said he believes “there is substantially more upside as the company builds out a track record of sustained cash flow profitability.”

The median analyst target is $4.


In other analyst actions:

CIBC World Markets upgraded Storm Resources Ltd. (SRX-T) to “outperformer” from “neutral” and raised its price target to $2.50 from $1.75.

CIBC raised its price target on Docebo Inc. (DCBO-T) to $48 from $35.50.

CIBC raised its price target on Enghouse Systems Ltd. (ENGH-T) to $98 from $79.

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