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

After outperforming its peers in 2020 and already up 7 per cent in 2021, RBC Dominion Securities analyst Darko Mihelic sees Sun Life Financial Inc. (SLF-T) possessing “little room for continued outperformance given current valuations.”

Accordingly, in a research report previewing the year for Canadian Life Insurance companies, he lowered his rating for its shares to “sector perform” from “outperform” on Thursday, despite calling Sun Life’s earnings impressive and remaining “positive” on its outlook.

“Year to date, SLF has had the highest expected profit growth of approximately 12 per cent versus a peer average of 4 per cent,” he said. “Asia results have been solid as earnings increased 14 per cent year-to-dateD and insurance sales improved 9 per cent year-to-date despite COVID-19 headwinds. SLF Asset Management earnings increased 10 per cent year-to-date and MFS has reported total net inflows every quarter since Q1/20. We remain positive on the outlook as we forecast good underlying EPS [earnings per share] growth of 11 per cent and relatively high underlying ROE [return on equity] of 14 per cent in 2021. We forecast strong earnings growth in Asia of 13 per cent and in SLF Asset Management of 17 per cent in 2021. We believe the recently announced bancassurance partnership with Asia Commercial Joint Stock Bank (ACB) in Vietnam will support sales and earnings growth in Asia longer term.”

However, Mr. Mihelic thinks “valuations appear elevated on a relative basis,” noting Sun Life shares are trading at 10.1 times his 2021 core EPS estimate, which is “well above” the peer average of 8.4 times and almost 20 per cent above its historical average premium to its peers.

“SLF was the best performing stock relative to peers in 2020 (down 1 per cent versus an average decline of 10 per cent for peers) and has generated positive total returns of 7 per cent year-to-date, above the Canadian lifeco index of 6 per cent year-to-date,” he said. “While we still like the company, we do not see much room for further near-term outperformance.”

With his downgrade, Mr. Mihelic raised his target for Sun Life shares to $69 from $61. The average target on the Street is $63.83, according to Refinitiv data.

Concurrently, Mr. Mihelic raised IA Financial Corp. (IAG-T) to “outperform” from “sector perform” with a $74 target, rising from $61. The average is $62.56.

“IAG was the worst-performing stock of the Canadian lifecos in 2020 and we believe as the economy starts to recover, we see a large potential for revaluation given its current valuations and our earnings forecast,” he said.

Ahead of the start of fourth-quarter earnings season on Feb. 10, Mr. Mihelic also made target price changes to these stocks:

Great-West Lifeco Inc. (GWO-T, “sector perform”) to $33 from $25. Average: $31

Manulife Financial Corp. (MFC-T, “outperform”) to $28 from $24. Average: $24.23.

“Our earnings outlook for the Canadian lifecos in 2021 is positive as we forecast core/underlying EPS to rebound 13 per cent in 2021 on average compared to a modest decline of 1 per cent in 2020,” he said. “Our expectation for strong core/underlying EPS growth in 2021 mainly reflects our assumption of strong expected profit growth of 11 per cent on average (versus 7 per cent in 2020) and higher new business gains, particularly for MFC’s Asia segment. Earnings on surplus may continue to be pressured for GWO and IAG but we forecast an improvement in earnings on surplus for MFC and SLF in 2021.”


Pointing to “the latest dramatic surge in global crop prices and associated channel checks that suggest this environment is already translating into accelerating equipment spending,” Raymond James analyst Steve Hansen raised his rating for Ag Growth International Inc. (AFN-T) to “strong buy” from “market perform.”

“The upside surge in prices over the past two months (China import demand, Latam weather/supply concerns) has pushed key benchmarks to their highest levels in 5+ years,” he said. “Following several years of trade uncertainty, lackluster pricing, and relatively skinny margins, we expect this momentous shift will quickly usher in a robust new cycle of farm spending on grain handling and storage equipment (AGI’s core products). We also believe this environment will accelerate the adoption of AGI’s newly branded SureTrack technology platform (crop planning, bin monitoring, etc.) an underappreciated business with significant organic upside, in our view.”

“Channel checks suggest the aforementioned macro backdrop has already translated into a flurry of new commitments by farmers, with momentum only likely to accelerate given recent crop price action. Escalating steel prices are also said to be incentivizing purchases. While we don’t expect this surging activity to manifest in AGI’s front quarter earnings (4Q20E), we do believe it bodes very well for the company’s 2021 prospects (& beyond).”

Though he expressed concern about the costs and liabilities stemming from the recent silo collapse in North Vancouver, Mr. Hansen thinks the discount AG Growth shares are showing versus peers is “too steep.”

“AGI’s shares have lagged significantly vs. its Ag-equipment peers since the silo collapse, leaving it to trade at an excessive, and largely unjustified, discount to the group, in our view,” he said.

Mr. Hansen hiked his target for its shares to $50 from $38, exceeding the $40.79 average on the Street.


CIBC World Markets analyst Nik Priebe initiated coverage of Canadian independent asset managers on Thursday.

“The asset managers are contending with a multitude of headwinds, including fee pressure and the rise of passive investing,” he said. “Banks have emerged as dominant competitors and the product landscape continues to evolve with lower-cost investment vehicles (e.g., ETFs) gaining market share. Asset managers have responded by obtaining scale via M&A and controlling operating expenditures. The advent of liquid alternatives reflects an encouraging development and the introduction of a new asset class that is less likely to be indexed away. However, we expect average fee rates to continue to drift lower over time, with that trend more pronounced in the retail channel of the wealth management industry.

“In our view, the best defence is to emphasize growth in areas that are less vulnerable to secular headwinds and remain disciplined on operating expenditures. We believe that access to distribution has become increasingly important and underpins our favourable view on IGM Financial. We also believe this theme partly supports CI Financial’s decision to aggregate a growing number of registered investment advisor (RIA) firms in the U.S. market.”

Mr. Priebe gave “outperformer” ratings to these firms:

  • Guardian Capital Group Ltd. (GCG.A-T) with a $37 target. The average on the Street is $33.
  • IGM Financial Inc. (IGM-T) with a $42 target. Average: $36.21.

“We consider Guardian to be a deeply discounted stock with significant upside to its sum-of-the-parts value and potential for substantial growth from its fundamental global equity strategy,” he said. “We like IGM Financial for its significant wealth business, which, in our view, is better positioned to fend off secular industry headwinds.”

Mr. Priebe handed these firms “neutral” recommendations:

  • AGF Management Ltd. (AGF.B-T) with a $6.75 target. Average: $6.50.
  • CI Financial Corp. (CIX-T) with a $18.50 target. Average: $20.57.
  • Fiera Capital Corp. (FSZ-T) with a $12.50 target. Average: $12.69.

“CI Financial and AGF Management stand out positively on earnings quality and financial flexibility,” he said. “CI trades at a 17-per-cent free cash flow yield, which should enable the company to continue executing on an aggressive buyback program and advance its M&A strategy. However, CI is also contending with elevated redemptions and we would like to see a sustained improvement in investment performance before becoming more optimistic about a corresponding recovery in net sales. AGF’s net flows have improved throughout 2020 and we wouldn’t consider ourselves to be bearish on the stock. However, with the S&W transaction and substantial issuer bid (SIB) complete, we aren’t clear on what the next catalyst will be. Fiera Capital has produced stable flows over time and investment performance appears positive. The company also recently announced the sale of a pair of private wealth businesses, which should enhance balance sheet liquidity and support dividend sustainability. However, our analysis of the payout ratio and free cash flow conversion screens poorly relative to peers.”


After it lagged its equipment peers in 2020, CIBC World Markets analyst Jacob Bout upgraded Finning International Inc. (FTT-T) to “outperformer” from “neutral” with a $37 target, rising from $23. The average on the Street is $31.

“We see FTT well positioned to benefit from torque to an improving macro backdrop, better commodity outlook (copper and crude), and recent cost-containment measures driving operating leverage (much leaner business today than past downturns),” he said.

Mr. Bout also made these target price changes:

  • Aecon Group Inc. (ARE-T, “outperformer”) to $23 from $20. Average: $19.88.
  • Bird Construction Inc. (BDT-T, “outperformer”) to $23 from $20. Average: $10.08.
  • Cervus Equipment Corp. (CERV-T, “neutral”) to $14 from $12.50. Average: $13.50.
  • SNC-Lavalin Group Inc. (SNC-T, “outperformer”) to $31 from $30. Average: $32.31.
  • Stantec Inc. (STN-T, “outperformer”) to $52 from $45. Average: $47.41.
  • Toromont Industries Ltd. (TIH-T, “neutral”) to $92 from $90. Average: $94.81.
  • WSP Global Inc. (WSP-T, “outperformer”) to $145 from $125. Average: $125.08.


On the heels of a “record-breaking” for gold, equity analysts at Canaccord Genuity expect 2021 to be “another strong year” for the precious metals sector, featuring record margins and strong free cash flow based on current prices.

“Gold reached new all-time highs and the gold industry posting record margins and free cash flow despite significant COVID19 disruptions,” the firm said in a research report. “Gold rose 25 per cent in 2020 to close at $1,898 per ounce, the best year for gold since 2010 and posting a new all-time high of $2,064 per ounce on the back of massive monetary and fiscal stimulus in response to the COVID19 pandemic. Silver rose 48 per cent in 2020 to close at $26.40 per ounce and its best performance since 2010.

“The share price performance of precious metals equities, while positive in 2020, was more mixed. The S&P/TSX Gold index gained 22 per cent in 2020 in USD terms, slightly underperforming the 25-per-cent gain in gold but was the 4th positive year of returns out of the last 5. Share price performance was led again by the intermediate/junior producer group, rising 51 per cent on average. The S&P/TSX gold index has corrected 21 per cent since its August high, with gold down 10 per cent that we attribute to investor optimism on COVID19 vaccines but we expect gold to rebound as an inflation hedge in 2021.”

With mines now largely running at pre-pandemic levels, the firm expects a rebound in production in 2021 to 2019 levels with higher volumes.

“We remain bullish on gold,” Canaccord said. “We expect the narrative on gold to continue to shift from pandemic-driven, safe-haven demand to a hedge against inflation. We expect monetary and fiscal policy to remain accommodative in 2021. After more than a decade of consistently overestimating inflation and treating 2 per cent more like a ceiling than a target, the Fed has adopted a new average inflation targeting regime to allow the economy to run hotter to make up for past inflation shortfalls (and certainly welcome to boost a post-pandemic recovery, in our view). With the US 10-year breakeven currently at 2 per cent and core PCE at 1.4 per cent, we expect the Fed to keep its foot on the gas until inflation expectations are sustainably above 2.5 per cent or higher. After years of undershooting, Chicago Fed Reserve President Charles Evans recently noted that achieving 3-per-cent inflation would not be so bad; we note that this would be a dramatic change as the US hasn’t experienced 3-per-cent core inflation since 1992 and has averaged only 1.6% since the end of the GFC. We also expect gold to be supported by continued rising debt levels with fiscal policy likely to remain easy for some time, particularly under the new Biden administration and Democratic control in Washington. The U.S. deficit in 2020 was $3.1 trillion and 14.9 per cent of GDP, the highest level since 1945. The Congressional Budget Office forecasts a 2021 deficit of $1.8 trillion (8.6 per cent of GDP).”

After increasing its gold and silver price decks as well as its Canadian dollar forecast, the firm adjusted its target prices for companies in its coverage universe.

It also upgraded a pair of companies to “buy” from “hold” based on valuations. They are:

Sandstorm Gold Ltd. (SSL-T) with a $12 target. The average on the Street is $13.94.

“In 2020, Sandstorm shares were down 4 per cent,” said analyst Carey MacRury. “We note that throughout the year, a number Sandstorm’s underlying operators were affected by COVID-19 production interruptions, subsequently affecting the Sandstorm’s GEO deliveries. We expect GEOs to rebound to pre-COVID-19 levels in 2021. We maintain our C$12.00 target but are upgrading Sandstorm.”

Silvercorp Metals Inc. (SVM-T) with an $11 target, up from $10.75. Average: $10.56.

“SVM’s shares recorded a 16-per-cent gain in calendar 2020, underperforming the peer group average of 51 per cent, despite a 45-per-cent rally in the silver price,” said analyst Dalton Baretto. “Based on our conversations with investors, the true value proposition of the company is not well understood, as it is overshadowed by the China-centric presence, exposure to ‘secondary metals’ (silver, lead and zinc), non-traditional pricing structure (given methodology at Chinese smelters) and limited scale.

“The hallmark event for SVM in 2020 was the attempted acquisition of Guyana Goldfields; ultimately SVM was outbid by deep-pocketed Chinese entity Zijin Mining. We believe an M&A overhang may also be responsible for SVM’s underperformance in 2020.”

The firm also named its top picks for 2021:

Senior producers:

B2Gold Corp. (BTO-T) with a “buy” rating and $11 target (down from $12 previously)

Kinross Gold Corp. (K-T) with a “buy” rating and $17 target

Intermediate/junior producers:

Equinox Gold Corp. (EQX-T) with a “buy” and $20.50 target (down from $22.50)

K92 Mining Inc. (KNT-T) with a “buy” and $12.75 target (up from $12.50)

Calibre Mining Corp. (CXB-T) with a “buy” and $4.25 target.

Streaming/royalty companies:

Osisko Gold Royalties Ltd. (OR-T) with a “buy” and $26 target


Equity analysts at Echelon Capital Markets unveiled their “Top Picks Portfolio” for the first quarter of 2020 in a research report released Thursday, calling it “an aggressive, catalyst-rich portfolio of high-growth, entrepreneurial companies.”

For the fourth quarter, the firm’s portfolio returned 40.1 per cent, beating both S&P/TSX Small Cap Index (23.5 per cent) and the broader S&P/TSX Composite Index (9.0 per cent).

“The S&P/TSX Small Cap Index extended an outperformance streak over the broader TSX Composite to three consecutive quarters,” the firm said. “This reflects an aggressive recovery from the 38.1-per-cent Q120 decline when it underperformed the 20.9-per-cent decline for the broader Composite Index. We look for investors to remain focused on the high-quality small cap names with specific catalysts or underlying secular growth trends in an environment where low interest rates are expected to persist.”

“Our Top Picks Portfolio 2020 full year return at 74.0 per cent outperformed the 2020 total return of the S&P/TSX Composite and the Small Cap Index by 68.4 per cent and 61.1 per cent, respectively. The Top Picks Portfolio outperformed the Small Cap Index (our closest benchmark) in all four quarters this year and posted three consecutive quarters of double-digit outperformance over the S&P/TSX Composite Index.”

The firm said 8 of the 13 equities selected for the quarter are returning names, which it said is “signalling confidence in our Top Picks continuing to benefit from underlying secular growth trends and ample catalyst opportunities.”

The new additions are:

* Skylight Health Group Inc. (SHG-X, “speculative buy” rating and $1.85 target)

Analyst Rob Goff: “We view Skylight as a compelling investment leveraged to its ability to add shareholder value through organic and acquisition-driven growth as a U.S. health clinic consolidator. We believe current healthcare needs together with provider challenges in a fragmented industry present the opportunity for significant and sustained shareholder value creation. Returns rest squarely upon the execution of the Company’s transition to primary care and its acquisition capabilities.”

* High Tide Inc. (HITI-X, “speculative buy” rating and 60-cent target)

Analyst Andrew Semple: “High Tide generated pro forma annualized sales of $148-million in its most recent quarter (incl. Meta Growth). We forecast that the Company will grow sales/EBITDA to more than $203-million/$27-million in 2021, which is well above consensus on revenue, with the only other coverage broker calling for 2021 sales/EBITDA of $152-million/$27-million. We expect High Tide will deliver on our above-consensus growth trajectory, with additional upside potential if the Company opens new stores at a quicker pace than modelled.”

* Protech Health Medical Corp. (PTQ-X, “buy” rating and $2.30 target)

Analyst Stefan Quenneville: “We are nominating Protech Home Medical to Echelon’s Q121 Top Picks Portfolio as we remain bullish on the home care focused durable medical equipment (DME) industry and Protech’s positioning in an M&A sweet spot where it can make accretive acquisitions of the many smaller players in this fragmented market, while it has achieved a regional scale that would make it an attractive target for one of the handful of larger national players.”

* Argonaut Gold Inc. (AR-T, “buy” rating and $5 target)

Analyst Gabriel Gonzalez: “We are adding Argonaut Gold to our Q121 Echelon Capital Market’s Top Pick List as the Company kicks off what could be a pivotal year in its transformation from a relatively high-cost junior gold producer to a lowercost intermediate producer. We see ongoing exploration at Magino (which is about to begin construction) and productivity improvements at Florida Canyon contributing to a revaluation in AR’s shares from current, undervalued levels compared to the peer group.”

* Silver Tiger Metals Inc. (SLVR-X, “speculative buy” rating and $1.30 target)

Mr. Gonzalez: “We believe that incoming assay results from the ongoing 10,000m drill program at the El Tigre project, to be released through January and February, could be a significant catalyst in the share price. Highlights from the first ten holes included hole ET-20-164 which returned 11.4m of 137g/t AgEq (1.8g/t AuEq) from 17.0m, including 0.5m of 1,593g/t AgEq (21.2g/t AuEq) in the gold alteration halo and Protectora vein, demonstrating the potential for near-surface gold alteration bulk tonnage potential in addition to high-grade veins in the northern vein extensions area.”

The returning equities are:

* Osino Resources Corp. (OSI-X, “speculative buy” rating and $2.30 target)

Analyst Ryan Walker: “We reaffirm Osino as our Top Pick for Q121, with several potentially high-impact catalysts due in the coming weeks, including drill results, a Maiden Resource estimate, and Preliminary Economic Assessment of the Twin Hills Central (THC) portion of the Twin Hills gold project in the Karibib district of Namibia.”

* Converge Technology Solutions Corp. (CTS-T, on restriction)

Mr. Goff: “We returned Converge Technology Solutions to Echelon’s Q121 Top Picks Portfolio as we remain bullish on cloud adoption trends, hybrid cloud demand, deals in the IT services space, and Converge’s copy/paste/accrete/repeat acquisition approach where the Company recently announced its thirteenth on-strategy acquisition since October 2017.”

* CloudMD Software & Services Inc. (DOC-X, “speculative buy” rating and $3.25 target)

Mr. Goff: “We remain resolutely bullish toward the telehealth industry and those companies leveraging differentiated technology, efficient distribution, and comprehensive service capabilities to provide integrated healthcare services. We support primary, ongoing care ahead of episodic care models. We see the integration of acquisitions made to date together with those in its pipeline adding both scale and clarity to its strategic deployment.”

* mdf commerce inc. (MDF-T, “buy” rating and $17 target)

Analyst Amr Ezzat: “The Company went from a steady eddy operation with anemic growth, to one delivering healthy growth rates under a new management team.”

* Quisitive Technology Solutions Inc. (QUIS-X, “speculative buy” rating and $1.60 target)

Mr. Goff: “We are retaining our Top Pick status for Quisitive after gains of 38.0 per cent for Q420.”

* AYR Strategies Inc. (AYR.A-CN, on restriction)

Mr. Semple: “Ayr’s Q420 return of 81 per cent was better than both the New Cannabis Ventures Global Cannabis Stock Index return of 62 per cent and our tracking group of U.S. cannabis MSOs of 71 per cent. Ayr outperformed as it executed on all the catalysts we had hoped for. It closed on the first of its pending acquisitions, announced new M&A, completed a non-dilutive financing, and reported solid Q320 results with 61-per-cent quarter-over-quarter sales growth. We believe Ayr’s stock has ample room to rise further.

* Green Thumb Industries Inc. (GTII-CN, “buy” rating and $38 target)

Mr. Semple: “Green Thumb’s Q420 return of 81 per cent was better than both the New Cannabis Ventures Global Cannabis Stock Index return of 62 per cent and our tracking group of US cannabis MSOs of 71 per cent. GTI outperformed after delivering a solid Q320 earnings beat (sales up 31 per cent quarter-over-quarter) and following the U.S. general election in November 2020 where the cannabis-friendly Democratic party won the Presidential race and New Jersey voters approved adult-use cannabis legalization by ballot.”

* Photon Control Inc. (PHO-T, “buy” rating and $3 target)

Mr. Ezzat: “Despite the remarkable stock performance in Q4 (up 43.3 per cent), we remain bullish on the Company’s short- and long-term outlook.


RBC Dominion Securities analyst Sabahat Khan expects Gildan Activewear Inc. (GIL-N, GIL-T) to benefit from an “improving demand environment” in 2021, supporting its shares.

Ahead of the release of its fourth-quarter 2020 financial results on Feb. 25, Mr. Khan raised his target price for the Montreal-based company’s shares to US$31 from US$26 and reiterated an “outperform” recommendation. The average target on the Street is US$25.69.

“Although there have been some headlines over the recent months that may have caused investors some concern as it relates to the outlook for Gildan (i.e., ‘second wave’, flooding in Honduras), we do not expect these issues to have a material impact on Q4 results and have left our Q4 EPS estimate of $0.22 unchanged (consensus EPS also at $0.22),” he said. “COVID-19 has been a headwind from a demand perspective and also through its impact on the company’s manufacturing operations (as some workers at its facilities have tested positive), but Gildan has been managing through this issue for quite some time and we do not view the advent of the ‘second wave’ as ‘new news.’ The floods in Honduras did impact Gildan’s manufacturing facilities; however, we expect the company likely leveraged its existing inventory to meet customer demand. As we move beyond the impact of the floods and as the demand environment improves through 2021, we expect capacity utilization at Gildan’s manufacturing facilities to reach 100 per cent by mid-year.”

Mr. Khan also sees the Street’s expectations for 2021 as “reasonable,” adding: “Based on our current outlook, we are leaving our 2021 revenue and earnings forecasts unchanged. Our forecasts reflect sequential improvement in sales and earnings over the course of 2021 as the vaccine roll-out in North America is completed and as activity levels across Gildan’s end-markets improve. Although the demand outlook and capacity utilization at the company’s manufacturing facilities should improve over the coming quarters, we are uncertain if the company will provide 2021 guidance at Q4 reporting (as they have done historically). There is still an element of uncertainty given the current backdrop and we would not be surprised if the company holds off on providing guidance until they have increased visibility.”


A group of equity analysts on the Street raised their target prices for shares of Artizia Inc. (ATZ-T) in response to the release of better-than-anticipated third-quarter 2021 results after the bell on Wednesday.

The Vancouver-based women’s fashion retailer reported revenue and EBITDA of $278-million and $55-million, respectively, exceeding the consensus expectations.

“In our view, Aritzia has done a great job of navigating a changing retail landscape by offering an aspirational customer experience within its brick-and-mortar locations and an improved e-commerce platform,” said Canaccord Genuity’s Derek Dley. “With over 20 consecutive quarters of same-store sales growth prior to the onset of COVID-19, a robust pipeline of new store openings, a healthy balance sheet to support growth and margin enhancement initiatives, and a well-aligned management team, we believe Aritzia is deserving of a premium valuation.”

Mr. Dley increased his target for its shares to $31 from $30, keeping a “buy” recommendation. The average on the Street is $30.19.

Others making changes included:

  • RBC’s Irene Nattel to $32 from $29 with a “buy” rating.
  • TD Securities’ Brian Morrison to $32 from $31 with a “buy” rating.
  • BMO Nesbitt Burns’ Stephen MacLeod to $31 from $25 with an “outperform” rating


Scotia Capital analyst Jason Bouvier lowered PrairieSky Royalty Ltd. (PSK-T) to “sector perform” from “sector outperform” with a $12.50 target, up from $11.50. The average on the Street is $12.17.

The firm also made a group of target price changes to energy stocks in its coverage universe, including:

  • Seven Generations Energy Ltd. (VII-T, “sector outperform”) to $11 from $9. Average: $7.47.
  • Peyto Exploration & Development Corp. (PEY-T, “sector perform”) to $5.50 from $4.50. Average: $3.79.
  • Spartan Delta Corp. (SDE-X, “sector outperform”) to $7 from $5. Average: $5.59.
  • Parex Resources Inc. (PXT-T, “sector outperform”) to $26 from $24. Average: $26.85.
  • Suncor Energy Inc. (SU-T, “sector outperform”) to $30 from $27. Average: $28.40
  • Paramount Resources Ltd. (POU-T, “sector underperform”) to $4.50 from $3.50. Average: $4.41.
  • Mullen Group Ltd. (MTL-T, “sector outperform”) to $14 from $13. Average: $11.94.
  • Kelt Exploration Ltd. (KEL-T, “sector outperform”) to $3 from $2.75. Average: $2.73.
  • Imperial Oil Ltd. (IMO-T, “sector perform”) to $32 from $22. Average: $24.53.
  • International Petroleum Corp. (IPCO-T, “sector perform”) to $4 from $3.50. Average: $4.31.
  • Gran Tierra Energy Inc. (GTE-T, “sector underperform”) to 65 cents from 55 cents. Average: 57 cents
  • Vermilion Energy Inc. (VET-T, “sector perform”) to $8.50 from $8. Average: $6.90.
  • Freehold Royalties Ltd. (FRU-T, “sector outperform”) to $7.25 from $5.50. Average: $7.25.
  • Enerplus Corp. (ERF-T, “sector outperform”) to $5.75 from $4.50. Average: $5.08.
  • Crescent Point Energy Corp. (CPG-T, “sector perform”) to $4.25 from $2.75. Average: $3.32.
  • Cenovus Energy Inc. (CVE-T, “sector perform”) to $9.25 from $7. Average: $8.33.
  • Canadian Natural Resources Ltd. (CNQ-T, “sector outperform”) to $42 from $33. Average: $36.21
  • Birchcliff Energy Ltd. (BIR-T, “sector outperform”) to $4.50 from $4.25. Average: $3.05.
  • ARC Resources Ltd. (ARX-T, “sector perform”) to $9 from $8.50. Average: $9.03.
  • Africa Oil Corp. (AOI-T, “sector perform”) to $1.60 from $1.50. Average: $1.61.
  • Advantage Oil & Gas Corp. (AAV-T, “sector outperform”) to $4.50 from $4. Average: $3.40.


Raymond James analyst Frederic Bastien raised his rating for Neo Performance Materials Inc. (NEO-T) in response to a recent presentation by its management team to the firm’s institutional sales team, which he said “suggested the company’s end-markets are improving at a faster pace than earlier thought.”

“More abundant than in recent memory, also, are various strategic initiatives that could act as catalysts for the stock in the not so distant future,” he added. “When put together, these factors strengthen our conviction NEO’s advanced materials will help accelerate the electrification of cars, the reduction of greenhouse gases and the purification of water.”

Moving the stock to “outperform” from “market perform,” Mr. Bastien raised his target to $18 from $12. The average is $16.86.

“We understand NEO is months away from launching new formulations targeted at antibacterial and fire retardant applications, and could even see automakers other than Honda adopt Magnequench-powered traction motors on their new EV/HEV platforms,” he said. “Impossible to time, yet always percolating in the background, are acquisitions. We’d welcome a deal of any size as long as it fits strategically and makes sense financially, but we would favour a more transformational one if it also serves to improve the stock’s liquidity and optimize NEO’s balance sheet.”


In other analyst actions:

* Canaccord Genuity analyst Yuri Lynk lowered his target for AirBoss of America Corp. (BOS-T) to $27 from $43, keeping a “buy” rating. The average target on the Street is $30.80.

“We are reiterating our BUY rating but lowering our one-year target price ... as we ‘kitchen sink’ our AirBoss Defense Group (ADG) estimates. We acknowledge a lack of visibility on ADG new awards is weighing on the stock,” said Mr. Lynk. “However, even after taking our EBITDA estimates well below the FactSet consensus for 2021 and 2022, we nevertheless see good value potential in AirBoss.

“We believe the following upside risks may not be fully appreciated by investors. Firstly, CSI revenue has the potential to mean revert from less than $30-million in 2020 to $130-million. Recall, between 2003 and 2018, CSI sold over $2 billion worth of Husky route clearance vehicles and accessories. This is a unique product with a lumpy revenue profile that could upside surprise. Secondly, ADG could secure additional orders for personal protective equipment (PPE) as the second wave of COVID-19 leads to shortages. Thirdly, upside could come from management putting an underleveraged balance sheet to work in an accretive fashion.”

* BMO Nesbitt Burns analyst Brian Quast initiated coverage of Calibre Mining Corp. (CXB-T) with a “market perform” rating and $3 target. The average is $3.38.

“·Calibre trades at 0.9 times P/NPV and 4.1 times P/2021E CFPS, in line with other smaller gold producers,” he said. “Calibre is employing a ‘hub-and-spoke’ operating approach, which has the potential to create additional value.

“Management is well regarded by the market and has a track record of success. However, given Nicaragua’s headline risk, a limited reserve base, and share price appreciation of 157% in 2020, we believe that risk and reward are well-balanced at these levels.”

* JP Morgan analyst Fraser Jamieson downgraded First Quantum Minerals Ltd. (FM-T) to “underweight” from “neutral” with a $21 target, up from $13. The average is $25.23.

* JP Morgan’s Patrick Jones raised his target for Lundin Mining Corp. (LUN-T) to $12.70 from $9 with an “underweight” rating. The average is currently $12.52.

* RBC Dominion Securities Geoffrey Kwan raised its target for Power Corporation of Canada (POW-T) to $34 from $31 with a “sector perform” recommendation. The average is $32.

* National Bank Financial analyst Rupert Merer cut Ballard Power Systems Inc. (BLDP-Q, BLDP-T) to “sector perform” from “outperform” with a US$38 target, up from US$25. The average is US$29.16.

* Credit Suisse analyst Manav Gupta hiked his target for Canadian Natural Resources Ltd. (CNQ-T) to $38 from $32 with an “outperform” rating. The average is $36.21.

* TD Securities analyst Vince Valentini raised his target for Shaw Communications Inc. (SJR.B-T) to $34 from $32 with an “action list buy” rating, while BMO Nesbitt Burns’ Tim Casey trimmed his target by a loonie to $26 with a “market perform” recommendation. The average is $27.50.

* Scotia Capital analyst George Doumet increased his target for Goodfood Market Corp. (FOOD-T) to $14 from $11 with a “sector outperform” rating, while National Bank Financial’s Ryan Li raised his target to $14.25 from $12.75 with an “outperform” recommendation. The average is $14.53.

* Scotia’s Mark Neville raised his Linamar Corp. (LNR-T) target to $85 from $70, maintaining a “sector outperform” rating. The average is $68.33.

Editor’s note: In an earlier version of this article, Echelon Capital's target price for shares of mdf commerce inc. was incorrectly stated. It has been updated.

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