Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

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

Equity analysts on the Street are applauding BRP Inc.’s (DOO-T) better-than-anticipated third-quarter financial results and upbeat 2021 forecast.

Before the bell on Wednesday, Valcourt, Que.-based maker of Ski-Doos and Sea-Doo reported quarterly revenue and adjusted earnings per share of $1.67-billion and $2.13, respectively, exceeding the consensus forecast of $1.6-billion and $1.41. For 2021, it now projects normalized EPS of between $5.00 and $5.25, up from earlier guidance of between $3.65 and $3.95.

Story continues below advertisement

Calling the results “very strong” and expecting its “strength” to continue,” RBC Dominion Securities analyst Steve Arthur upgraded BRP to “outperform” from “sector perform,” pointing to market share gains, an expanding customer base and “solid” execution boosting “confidence in the sustainability of strong performance.”

“Powersports retail strength continued through FQ3 (and into FQ4), with BRP outperforming in nearly all product segments,” said Mr. Arthur. “Dealer inventories remain very low (down 53 per cent year-over-year), with BRP running ‘flat out’ to replenish stock. Beyond this replenishment (which sets up several strong quarters), we see multiple drivers of sustainable growth: an expanded customer base with many new entrants to powersports; expanded manufacturing capacity late 2021; continued innovation to deliver strong products with continued market share gains; and tight cost controls to further support margins.”

Pointing to “clearer” visibility and an “attractive” valuation, he raised his target price for BRP shares to $89 from $75. The average on the Street is $85.33, according to Refinitiv data.

“Our base case 5-year forecast points to approximately 16-per-cent EPS CAGR [earnings per share compound annual growth rate] through fiscal 2025, reflecting successful product launches, further market share gains, and solid execution,” said Mr. Arthur. “Applying the same (relatively conservative) multiples as in our base case, we derive a fiscal 2024 year-end share price level of $122 — a strong 19-per-cent implied return CAGR.”

Elsewhere, calling the release “impressive,” Desjardins Securities’ Benoit Poirier said “the most important takeaway remains the bullish outlook portrayed by management for fiscal 2022.”

He hiked his target to a Street-high $107 from $84, reiterating a “buy” rating.”

“We continue to see significant potential for long-term value creation as BRP executes on its five-year strategic plan (was targeting normalized EPS of $7.50 by FY25 although this could be achieved earlier considering the strong tailwinds resulting from the pandemic),” said Mr. Poirier.

Story continues below advertisement

Others raising their targets included:

* Canaccord Genuity’s Derek Dley to $105 from $88 with a “buy”

“In our view, BRP is well positioned to capture additional market share in a growing powersports market, as it continues to introduce new products and extends its reach into complementary product lines,” said Mr. Dley.

* CIBC World Markets’ Mark Petrie to $79 from $78 with a “neutral” rating

“In a historically favourable industry backdrop, BRP is aggressively seizing opportunities, gaining share, and building capacity,” said Mr. Petrie. “While we believe nearterm strength looks nearly certain, the next step will be keeping dealer and customer excitement up with fewer in-person touchpoints and converting new entrants to repeat customers. Our forecasts come up substantially, but notably our F22 earnings forecasts are only modestly above F21, driven by a reversion to more normal levels of sales programs.”

* National Bank Securities’ Cameron Doerksen to $88 from $85 with an “outperform”

Story continues below advertisement

* TD Securities’ Brian Morrison to $90 from $85 with an “action list buy”

* BMO’s Gerrick Johnson to $74 from $70 with a “market perform”


Dye & Durham Ltd. (DND-T) is “consolidating the fragmented legal solutions industry,” according to Raymond James analyst Stephen Boland.

In a research report released Thursday, he initiated the Vancouver-based cloud-based software and technology solutions provider, which began trading on the Toronto Stock Exchange in mid-July, with an “outperform” rating.

“The Company has a strong blue-chip customer base of over 25,000 clients,” the analyst said. “DND’s clients include the top 20 law firms in Canada, many of the large Canadian banks as well as small legal firms. The average customer relationship is over 16 years and no customer represents more than 2 per cent of revenue.

Story continues below advertisement

“We believe customer loyalty is one of the key attributes for DND when put into perspective. For instance, although the customers are listed as law firms, the real customers are the law clerks and paralegals within the firms. They may access DND systems multiple times in a day which is why there is low customer turnover.”

Pointing to “ever-increasing” compliance standard and regulations, Mr. Boland said the legal industry continues to grow in DND’s markets, which he sees as a trend that will continue.

“We also believe this business is not overly price sensitive,” he said .”Mainly because the fee charged by DND is a small fraction of the overall purchase transaction and legal cost to their clients. Increasing prices is possible following a firm being acquired.

“DND, through organic growth and acquisitions has grown its revenue and EBITDA at an CAGR [compound annual growth rate] of 65 per cent and 107 per cent over the past 5 years. This is a positive ratio in our view as it demonstrate that DND is extracting synergies to drive the margins higher.”

Mr. Boland set a target of $26 per share. The average on the Street is $27.67.

“DND is trading at a premium to the other information service providers and a large discount to the other comparable group,” he said. “We believe, based on consensus forecasts we can justify a premium to the other service providers due to the superior EBITDA growth over the next two years. The average growth for the group is 10 per cent compared to DND’s 2022 growth of 30 per cent. And this does not include material acquisitions. The Other comp group has a 26-per-cent average growth implying DND is higher than that group is well.”

Story continues below advertisement


In the wake of better-than-anticipated fourth-quarter results driven by a pandemic-driven rise in demand, Desjardins Securities analyst Frederic Tremblay thinks Rogers Sugar Inc. (RSI-T) is likely to experience a “more normalized” performance in its retail channel moving forward that should limit upside.

After the bell on Wednesday, the Montreal-based company reported “solid” quarterly results. Revenue and adjusted earnings per share of $246.2-million and 14 cents, respectively, both exceeded Mr. Tremblay’s estimates ($229.4-million and 11 cents) due largely to its Sugar segment.

“Both the sugar and maple businesses posted year-over-year growth, driven in part by an extra week and strong COVID-19-related demand,” the analyst said.

With the results, the company introduced 2021 guidance that calls for sugar volume of 766,000 metric tons, which Mr. Tremblay said was a “modest” 0.6-per-cent increase year-over-year.

“Increases in the industrial and export categories are expected to be partially offset by lower shipments in the consumer category (following pantry loading in FY20),” he said. “A moderate improvement of the segment’s adjusted EBITDA is expected, thanks in part to a more favourable operational backdrop.”

Story continues below advertisement

Also expecting volume for its maple products to “gradually return to more normalized levels over the coming quarters,” Mr. Tremblay trimmed his 2021 adjusted EPS projection to 39 cents from 41 cents.

“Pricing, execution and competition are still key ingredients that will determine the magnitude of the margin recovery in the maple business,” he said.

Keeping a “hold” rating for Rogers Sugar shares, he raised his target to $5.50 from $5. The average is $5.15.

Elsewhere, these analyst increased their targets:

* TD Securities’ Michael Aelst to $6 from $5.50 with a “sector perform”

“We upgraded RSI to BUY in early-October because the dividend yield (currently 7.1 per cent) looks very attractive at a time when earnings visibility and momentum are improving,” he said. “The Maple business stabilized in H2/F20 and should see profit recover the next few years, considering recent price increases (amid easing competitive pressure), solid volume growth, and the completion of its footprint optimization. The larger Sugar business should benefit from improved volumes (exports and industrial), favourable product mix, and a recovery from last year’s supply and logistic challenges caused by a horrible beat crop.”

* Scotia Capital analyst George Doumet to $5.50 from $5 with a “sector perform”

* National Bank’s Endri Leno to $5 from $4.25 with an “underperform”

* BMO’s Stephen MacLeod to $6 from $5 with a “market perform”


Desjardins Securities analyst John Chu said he’s “not too concerned” about Rubicon Organics Inc.’s (ROMJ-X) third-quarter results falling short of his expectations, emphasizing the Vancouver-based cannabis producer remains in “early sales ramp-up mode” and seeing momentum remaining “strong.”

“With early success in Ontario (ROMJ pre-rolls are one of the top sellers), approval to sell into Quebec (third largest market in Canada but with only a fraction of competing LPs) and new product launches planned for the coming months, we see continued strong sales growth throughout 2021,” he said. “Sales into Germany are expected to commence as early as 1H FY21, which could also provide a sales tailwind.”

On Wednesday before the bell, Rubicon reported net sales of $3.2-million, missing the projections of both Mr. Chu ($4.3-million) and the Street ($3.9-million). Adjusted EBITDA of a loss of $2.6-million also missed estimates (loss of $0.8-million and $1-million, respectively).

Despite the miss, which was due in large part to negative gross margins and higher-than-expected expenses, the analyst said Rubicon is “making good early inroads” in Ontario and sees it “well-positioned” for gains in Quebec.

“We brought down our top-line forecast for 4Q20 and 2021 to reflect the 3Q sales shortfall and assumed a slower sales ramp; we did not increase our sales forecast beyond 2021,” said Mr. Chu. “We forecast that ROMJ will reach positive EBITDA by 1Q21 given management reiterated its timeline for the company being EBITDA positive by year-end; based on 3Q results, we suspect it will commence generating monthly positive EBITDA only in December 2020. We lowered our gross margin forecast to reflect the 3Q drag and expect it to increase from there as production ramps up and cost-cutting initiatives are realized. Furthermore, we forecast gross margins reaching 50 per cent plus by 3Q21, as guided toward on the company’s conference call. Our SG&A forecast is up modestly going forward as well to reflect 3Q results.”

Maintaining a “buy” rating for Rubicon shares, he increased his target to $5 from $4.50. The average is $4.65.

“ROMJ is well-positioned to see continued strong sales growth, and margins should start to show meaningful improvement in the quarters to come,” said Mr. Chu.

Elsewhere, citing “continued execution which continues to be reflected with the shares up 100 per cent year-to-date,” Haywood Securities analyst Neal Gilmer increased his target to $5 from $4.20 with a “buy” rating and recommends investors accumulate shares at current levels.

“We view Rubicon as an attractive investment in the cannabis sector,” he said. “Rubicon is in the early innings of establishing itself as a leader within the super-premium and organic cannabis market segments. We believe the Company is positioned to establish itself in a strong niche segment of the market.”


With its first quarter as a public company “in the rear-view mirror,” Canaccord Genuity analyst Robert Young thinks Pivotree Inc. (PVT-X) is “focused on execution through the critical holiday shopping season.”

“This year, we expect more shopping than ever will be done digitally, and Pivotree is helping its large merchant and branded manufacturer client base transition to online commerce and manage omnichannel complexity,” he said. “Q3 was modestly ahead of our expectations with recurring revenue growth metrics strong across the board (22 per cent year-over-year annual recurring revenue growth, 113-per-cent net revenue retention and ARR bookings up 36 per cent year-to-date), which gives us confidence that the company will be able to capitalize on the secular opportunity. Pivotree is focused on driving 20-25-per-cent top-line growth, driven by significant demand coupled with EBITDA margin expansion toward 20 per cent-plus in the medium term.”

On Wednesday, the Toronto-based commerce and master data management services provider, which began trading on the TSX on Oct. 30, reported revenue of $16.2-million, up 6.7 per cent year-over-year and ahead of the projections of both Mr. Young ($15.45-million) and the Street ($15.65-million). The beat was due largely to 14-per-cent growth in its Managed Services segment.

“Q3 was exactly where you would expect a first quarter post IPO to land,” the analyst said. “Not too hot, not too cold. While the tremendous tailwinds behind ecommerce in Q3 heading into what we expect to be the most digital shopping season in history could have led some investors to expect a windfall, the reality is Pivotree management had a reasonable view into the September quarter when it was on the IPO roadshow in mid-October. As such, we didn’t expect too much in the way of fireworks. In general, we would expect to see more steady growth out of Pivotree as the recurring revenue (75 per cent of total revenue in Q3) driven primarily by Managed Services contracts creates a baseline that the Professional Services business adds some volatility to as projects ramp and roll off. We don’t expect Pivotree to spool up large projects quickly, which suggests singles and doubles over home runs as we look ahead.”

Mr. Young said he expects a “steady ramp” overall through the fourth quarter and 2021, led by MS, however he expects EBITDA margins to “be under some pressure” as revenue grows.

After nudging his estimates higher, he increased his target for Pivotree shares to $15.50 from $15 with a “buy” rating. The average is $14.75.

“In our view, Pivotree’s growing ARR and 50-per-cent-plus gross margins, along with its focus on accretive M&A, provide support to our valuation, and we see further upside as the company scales and executes as planned,” Mr. Young said.


In other analyst actions:

* National Bank Financial analyst Vishal Shreedhar raised his target for Alimentation Couche-Tard Inc. (ATD.B-T) to $55 from $53 with an “outperform” rating, while BMO’s Peter Sklar bumped his target up by a loonie to $51 also with an “outperform” rating. The average on the Street is $53.64.

* TD Securities analyst Cherilyn Radbourne hiked her target for Brookfield Asset Management Inc. (BAM-N, BAM.A-T) to US$57 from US$50 with an “action list buy” rating. The average is US$47.17.

* Eight Capital analyst Kevin Krishnaratne increased his target for Vitalhub Corp. (VHI-X) to $4 from $3.50 with a “buy” rating. The current average is $3

* Laurentian Bank Securities analyst Yashwant Sankpal raised his target for Fronsac REIT (FRO.UN-X) to $7.75 from $7.50, keeping a “buy” recommendation. The current average is $8.

* Laurentian Bank Securities analyst Furaz Ahmad trimmed his target for Calian Group Ltd. (CGY-T) to $73 from $75 with a “buy” recommendation, while Echelon Capital’s Amr Ezzat lowered his targett to $75 from $77 with a “buy: rating. The average is $73.19.

* After it acquired a near-term development vanadium royalty stake in Bushveld Minerals’ Brits project for $2-million, Paradigm Capital analyst David Davidson raised his target for VOX Royalty Corp. (VOX-X) to $4 from $3.75 with a “buy” rating. The average is $4.33.

“VOX is a high-growth, precious metal-focused stream and royalty company with a portfolio of over 40 transactions spanning seven jurisdictions,” he said. “Established in 2014, the company has built a proprietary database of intellectual property containing details on more than 7,000 royalty assets around the world, which helps give VOX a first-mover advantage. The company also has a technically focused transactional team with more than $1.5 billion of royalty experience, which has helped create the fastest-growing royalty and streaming company in the sector with a focus on significant near-term growth and development catalysts.”

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies