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

Though they applauded the first-quarter financial results for Shopify Inc. (SHOP-T, SHOP-N) on Thursday, equity analysts on the Street cautioned that the trajectory of growth for the remainder of the year is likely to more volatile.

The Ottawa-based online commerce software giant reported revenue of US$988.6-million, up 110 per cent year over year and exceeding the Street’s forecast by 16 per cent (US$855-million). Earnings per share of US$2.01 also blew past the consensus estimate (73 US cents).

In a research note titled Keeps the Ball Moving Forward with Strong Q1, Citi’s Tyler Radke said Shopify’s strong 2020 momentum carried over into 2021, saying its “broad-based strength was encouraging to see and is driving strong estimate revision.” However, he expects growth to “decelerate sharply” into the second half of the year.

“Significant additions in capacity (merchants) to the Shopify platform accelerated the pace of transactional volumes through Q1, and combined with persistence of trends on the consumer side benefitting e-commerce generally, Shopify continues to capitalize on what is a large and evolving market opportunity,” said Mr. Radke. “Our numbers do move materially higher on stronger conviction around MS levers and subscription revenue growth, though it appears shares are already pricing in a more optimistic scenario vs Street. We continue to believe that more meaningful upside to shares from here will likely come from further evidence of SFN, Shop App, and other MS monetization levers / contribution to incremental topline.”

Despite the concern, Mr. Radke was one of several analysts to raise their target prices for Shopify shares, a day after they jumped over 11 per cent in Toronto after the earnings release.

Keeping a “neutral” recommendation, he increased his target to US$1,420 from US$1,315. The current average on the Street is US$1,472.50, according to Refinitiv data.

“We rate Shopify shares as Neutral, High Risk because while we appreciate the magnitude of the TAM, an acceleration of secular tailwinds coming into focus, a strong management team and record of execution, we believe much of this is priced in at the current multiple—which earns a significant premium to the implied multiple of its growth/margin framework and implies a 10-yr revenue CAGR that appears potentially too high,” he said.

Elsewhere, Susquehanna analyst John Coffey upgraded Shopify to “positive” from “neutral” with a price target of US$1,500.

“SHOP saw their fourth consecutive quarter of 100-per-cent-plus GMV (payments) growth and 93-per-cent-plus revenue growth,” he said. “Next quarter they will lap these Covid-driven tailwinds of 2020 and growth should normalize. But we still like the setup into 2021 and beyond as the company continues to expand its merchant offerings and increase investments to drive top-line growth.”

Others making target adjustments include:

* Credit Suisse’s Timothy Chiodo to US$1,400 from US$1,350 with a “neutral” rating.

* CIBC World Markets’ Todd Coupland to US$1,475 from US$1,325 with a “neutral” rating.

* Evercore ISI’s Mark Mahaney to US$1,460 from US$1,360 with an “in line” rating.

* Piper Sandler’s Brent Bracelin to US$1,600 from US$1,500 with an “overweight” rating.


Despite calling it a “first-class” company and believing it “can do no wrong these days,” Raymond James analyst Frederic Bastien downgraded FirstService Corp. (FSV-Q, FSV-T) to “market perform” from “outperform” on Thursday.

“We are big fans of FirstService, which demonstrated over the past 12 months it can vigorously cut costs in the face of economic disruption and still seize on emerging revenue opportunities,” he said. “For 1Q21, these came courtesy of the Texas deep freeze, which drove significant volumes for the FIRST ONSITE commercial restoration business, and a red-hot housing market. But with the share price up 113 per cent since we reported on 1Q20 results a year ago, compared to a gain of 50 per cent for the S&P 500, we feel that FirstService’s envious leadership position in North America’s big and fragmented market for residential property services is getting appropriate recognition from the Street.”

On Wednesday, the Toronto-based property services provider reported adjusted EBITDA of US$60-million, topping both Mr. Bastien’s Street-high projection of US$53-million and the consensus estimate of US$48-million. Revenue also topped expectations as both of its segments, FirstService Brands and FirstService Residential, displayed improved margins.

After raising his financial expectations for the remainder of 2021 and 2022, Mr. Bastien increased his target to US$175 from US$160. The average target is US$146.25.

“[The] stock is now expensive on an absolute and relative basis,” he said. “It is trading at an EV/EBITDA multiple of 25.7 times our 2021 forecasts, versus the average forward multiple of 17.9 times it has commanded over the past five years. At the same time, FirstService’s premium to its closest comps has never been larger, at over 8.0 multiple points. Although we feel FSV’s scarcity value and above-average growth prospects justify its premium, we’re hardpressed painting a scenario where this gap widens further from here.”

Elsewhere, CIBC World Markets analyst Stephanie Price downgraded FirstService to “neutral” from “outperformer” with a US$180 target, rising from US$161.


RBC Dominion Securities analyst Paul Treiber thinks digital initiatives are likely to “transform” CGI Inc. (GIB.A-T) moving forward.

A day after its second-quarter results topped expectations on the Street, sending its shares higher by 1.6 per cent in Toronto, Mr. Treiber was one of several equity analysts to raise his target price for the Montreal-based information technology and business consulting services company.

“CGI reported the highest quarterly bookings in 5-plus years and trailing 12-month bookings reached a record high,” he said. “Management commentary suggests that the momentum is structural, not cyclical, as clients accelerate digital transformation initiatives. Strong bookings are a positive leading indicator and suggest that CGI’s organic growth is likely to turn positive in coming quarters.”

Before the bell on Wednesday, CGI announced adjusted earnings per share for the quarter of $1.35, up 7 per cent year-over-year and exceeding both Mr. Treiber’s estimate (by 3 cents) and the consensus on the Street (by a penny). Revenue declined 2 per cent to $3.08-billion, narrowly topping expectations ($3.01-billion and $3.07-billion, respectively).

Bookings for the second quarter jumped 40 per cent from the same period a year ago to $3.89-billion blowing past Mr. Treiber’s estimate of $3.22-billion. He emphasized the strength came as a result of new business, which almost doubled to $1.48-billion.

“We believe that CGI’s strong bookings would convert into higher organic growth for the company, particularly with such a high mix of new business (vs. renewals),” he said. “As a result, we believe that CGI’s organic growth is likely to continue trending upward. Constant currency organic growth improved to an estimated decline of 2.7 per cent in Q2, up from a 5.4 per cent drop in Q1 (RBC estimate at down 1.6 per cent). Following Q2, our constant currency organic growth estimates move to a decline of 0.5 per cent in FY21 and up 3.4 per cent FY22e, from down 0.3 per cent and 3.2 per cent, respectively.”

Seeing a “digital transformation augmenting CGI’s M&A model,” Mr. Treiber raised his target for CGI shares to $120 from $115 with an “outperform” rating (unchanged). The average on the Street is $114.

“Prior to COVID, CGI was beginning to experience stronger than historical organic growth,” he said. “ However, growth and bookings were uneven, as it took longer than expected to close deals. Now, CGI’s clients are prioritizing digital transformation initiatives, from which CGI is benefiting through uptake of managed services and systems integration & consulting. Stronger organic growth would complement CGI’s M&A model and could enable CGI to achieve its aspirations to double in size sooner than its target of 5–7 years.”

Other analysts raising their targets include:

* Canaccord Genuity’s Robert Young to $120 from $112 with a “buy” rating.

“Overall, we see COVID-related headwinds subsiding and expect positive momentum in revenue and EBIT margins going forward,” he said.

* Scotia Capital’s Paul Steep to $114 from $112 with a “sector outperform” rating.

“Our expectation is that CGI will continue to manage through a volatile demand environment as its clients shift priorities between near-term and longer-term IT projects,” said Mr. Steep. “In our view, CGI remains positioned to execute well despite end-market volatility, generating strong FCF to invest in its business as well as providing returns to shareholders through capital deployment.”

* BMO Nesbitt Burns’ Thanos Moschopoulos to $121 from $115 with an “outperform” rating.

“The bookings strength in the quarter reaffirms our view that CGI is benefitting from an improved spending environment, driven by digital transformation initiatives, as clients across all industries and geographies are gearing up for a postpandemic world. We’ve made minor changes to our model and believe the stock’s valuation remains attractive, particularly as CGI’s forward P/E multiple remains below its pre-pandemic peak,” said Mr. Moschopoulos.

* CIBC World Markets’ Stephanie Price to $110 from $105.25 with a “neutral” rating.

* TD Securities’ Daniel Chan to $125 from $120 with a “buy” rating.

* Raymond James’ Steven Li to $120 from $110 with an “outperform” rating.


A group of equity analysts raised their targets for TFI International Inc. (TFII-N, TFII-T) in response to the release of in-line first-quarter results, seeing encouraging signs from the Quebec-based transportation and logistics services company’s guidance.

On Wednesday, TFI reported EBITDA and earnings per share of US$170-million and US72 cents, matching the consensus projections on the Street.

Concurrently, he raised its 2021 guidance for 2021, which included the expectation of 7 months of contributions from its blockbuster deal for UPS Freight, the less-than-truckload and dedicated truckload divisions of United Parcel Service, Inc. , to a range of US$3.80 to US$4.00. The Street had expected US$3.76 previously.

“While Q1 was largely in-line, the key takeaways from the quarter were: 1) management’s confirmation of the tight capacity and strong pricing trends in the trucking sector (which bodes well for the repricing of the UPS Freight acquisition set to close this quarter); and 2) the solid 2021 guide, which includes a 7 month contribution from the UPS Freight transaction and confirming the encouraging (and early) contribution from that acquisition. We continue to see meaningful upside in the shares as execution on the acquisition builds,” said RBC Dominion Securities analyst Walter Spracklin.

He raised his target for TFI shares to US$98 from US$86 with an “outperform” rating. The average on the Street is currently US$90.90.

Others making changes include:

* BMO’s Fadi Chamoun to US$95 from US$84 with an “outperform” rating.

“We also see upside to company 2021 guidance of $3.80-$4.00 EPS,” said Mr. Chamoun. “TFII should benefit from several earnings/cash flow growth levers over the coming two years: (1) industrial economic recovery to which TFII has significant exposure; (2) continued strength in consumer end markets; (3) self-help opportunity from improving performance of acquired businesses including UPS Freight and DLS; (4) modest leverage and strong FCF to redeploy in small-medium-size acquisitions.”

* CIBC’s Kevin Chiang to US$95 from US$86 with an “outperformer” rating.

* Credit Suisse’s Allison Landry to US$102 from US$92 with an “outperform” rating.

* TD Securities’ Tim James to $125 from $110 with a “buy” rating.


Though his outlook didn’t change after weaker-than-anticipated first-quarter results, iA Capital Markets analyst Elias Foscolos downgraded Yangarra Resources Ltd. (YGR-T) to “speculative buy” from “buy” based on above-average financial leverage.

On Wednesday after the bell, the Calgary-based energy company reported production of 8,736 barrels of oil equivalent per day, down 28 per cent year-over-year and below both Mr. Foscolos’s estimate (10,600 boe/d) and the consensus projection (9,500 boe/d). Though realized prices were higher, they were offset by increased royalties and operating costs, leading to cash flow per share of 20 cents, also missing the analyst’s expectation (22 cents)

“Despite the production miss compared to estimates, we believe the overall outlook remains intact as the wells that were drilled in late Q1 continue to operate and percolate through financials,” said Mr. Foscolos.

He maintained a $2 target for Yangarra shares, exceeding the consensus of $1.76.


Calling it a market leader, Desjardins Securities analyst David Newman thinks Montreal-based Dialogue Health Technologies Inc. (CARE-T) is “dominating the continuum of care in bits and bytes.”

In a research report released Thursday, he initiated coverage of the telemedicine firm, which debuted on the the Toronto Stock Exchange on March 30 after a highly anticipated stock offering, with a “buy” recommendation.

“We believe Dialogue has a leading position in virtual care in Canada, focused on the resilient B2B market, as highlighted by its more than 2,000 direct customers in Canada and Germany (OHS in Germany),” said Mr. Newman. “Furthermore, it serves more than 50,000 customers through its channel partnerships. As at January 31, 2021, 2.5 million Canadian members and their dependants have access to Dialogue’s virtual platform. Dialogue offers the only fully integrated B2B user experience in Canada, with a simple user interface and streamlined architecture, which continues to resonate with its large and high-quality customer base. Dialogue’s one-stop hub is accessible 24/7/365, connecting individuals to a team of more than 500 multidisciplinary healthcare providers across 12 clinical specialties in primary care and mental health care. Moreover, non-clinical providers include specialists such as career counsellors and financial advisors, as well as a broad network of EAP service providers.”

Mr. Newman pointed to several factors in justifying his bullish stance, including “compelling” industry drivers, “formidable” competitive advantages, “strong” customer traction and its “highly scalable” health platform.

““Our positive view is premised on: (1) Dialogue’s leading position in virtual care, focused on a large B2B market undergoing disruption; (2) a fully integrated platform supported by a highly scalable tech stack; (3) a predictable business model (strong recurring revenue, high customer retention); (4) significant organic growth and M&A opportunities; and (5) an experienced management team,” he said.

“We see significant growth ahead as the company executes its multi-pronged strategy of building its unique Integrated Health Platform, executing its ‘land and expand’ strategy through higher attach rates, extending its offering to new treatment areas and entering new geographies, augmented by strategic acquisitions. Dialogue should benefit from large addressable markets undergoing significant disruption on the back of the COVID-19 pandemic.”

He set a target price of $21 per share, exceeding the current average on the Street of $19.90.

“Dialogue offers a potential total return of 38 per cent, supported by its best-in-class organic growth, highly predictable and ratable revenue stream focused on the resilient B2B market, formidable competitive advantages and acquisitions,” said Mr. Newman.


A day after its shares jumped over 5 per cent following the release of better-than-expected quarterly results, BMO Nesbitt Burns analyst Thanos Moschopoulos downgraded Real Matters Inc. (REAL-T) to “market perform” from “outperform,” citing “apprehension regarding the rate environment and the impact that rising rates seem to be having on refi volume.”

“While we believe REAL continues to have significant opportunity for long-term growth (driven by market share gains), we think there are too many moving parts in the near term. This prompts us to move to the sidelines,” he said.

Mr. Moschopoulos trimmed his target to $20, down from $21 and below the $26.63 average.

“We’ve reduced our estimates, despite the beat in the quarter, based on the impact that rising rates seem to be having on the refi market,” he said. “While there are still millions of potentially refi-able mortgages (even at the current average 30-year rate of 3.17 per cent), it would seem that borrowers are less enticed to refi than when rates were lower. We believe consensus estimates aren’t perhaps adequately baking in this recent deceleration, or the potential impact of a further rate increase.”

Others making target changes included:

* Canaccord Genuity’s Robert Young to $25 from $30 with a “buy” rating.

“Real Matters reported strong results with both the appraisal and title segments ahead of expectations. Net revenue growth of 30 per cent in Q2 alongside EBITDA margins of 40.7 per cent benefitted from share gains but also continued strong origination volumes across the US and Canada regions. As foreshadowed, Real Matters announced it passed a significant milestone with the ramping of revenue from a new Tier 1 customer in the Title business. With interest rates turning upward in the quarter, we expect refinance volumes to moderate while seasonality supports purchase origination volume. Appraisal waivers appear to have stabilized but remain a headwind in the near term. While we have reduced estimates to reflect the impact of rates, we remain confident on continued net revenue growth in H2,” said Mr. Young.

* Scotia Capital’s Paul Steep to $22 from $24 with a “sector perform” recommendation

“We remain cautious on the shares due to several updated Mortgage Bankers Association (MBA) forecasts which reflect anticipated declines in refinancing volumes and moderate decreases to origination volumes driven by increasing mortgage lending rates. We are monitoring the firm’s progress in growing its U.S. Title business beyond the refinancing market as it seeks to replicate the efforts within its U.S. Appraisal operations. Factors we are monitoring in revisiting our view on the shares include the ramp-up of volumes in U.S. Title, given the new Tier 1 client launch, and additional new client wins,” said Mr. Steep.

* ATB Capital Markets’ Martin Toner to $26 from $24 with an “outperform” rating.

“Real Matters announced the addition of a Tier 1 lender in U.S. Title, its largest segment. This is positive news for the longer-term value of Real Matters’ stock, but the weakening in the refinance market results in our near-term estimates coming down. With mortgage rates still near five-year lows, and Real Matters continuing to gain share in Appraisal and Title, we continue to believe a stream of cash flow through FY25 makes Real Matters attractive to investors,” he said.

* TD Securities’ Daniel Chan to $22 from $30 with a “buy” rating.

* National Bank Financial’s Richard Tse to a Street-high $35 from $40 with an “outperform” rating.


Ahead of the start of first-quarter earnings season for Canadian life insurance companies, Scotia Capital analyst Meny Grauman thinks the issues facing the industry haven’t changed since the end of 2020, seeing the market continues to “balance near-term operating performance against a longer-term outlook for a sustained rise in interest rates.”

“The pandemic continues to rage in most jurisdictions, including Canada, as the third wave of the virus appears to be the toughest yet, but the good news is that equity markets continue to look through these negative headlines and focus on recovery as vaccination efforts gather steam,” he said in a research report released Thurday. “While the rate outlook is a key positive for the sector as a whole, it certainly does not appear to be a near-term catalyst given that the earnings impact is largely indirect and will only become apparent over time. Our outlook for the lifecos then is for steady and consistent results with an emphasis on execution, especially for GWO which is busy integrating its recently closed MassMutual acquisition and for IAG which continues to integrate its IAS vehicle warranty business in the U.S.”

Mr. Grauman is forecasting first-quarter earnings per share for the sector to rise by 4 per cent from the fourth quarter of 2020 and rise 37 per cent year-over-year.

“The year-over-year increase reflects a resilient operating environment and ongoing solid credit experience that continues to stand up to the pressures of the global pandemic, as well as the reemergence of core investment gains from MFC in particular. With the exception of SLF all of our estimates are higher than consensus, led by GWO and MFC at 4 per cent.”

With that view, he made a series of changes to stocks in his coverage universe on Thursday.

His changes included:

  • Great-West Lifeco Inc. (GWO-T, “buy”) to $37 from $33. The average is $34.50.
  • IA Financial Corp. Inc. (IAG-T, “sector outperform”) to $84 from $72. Average: $74.50.
  • Intact Financial Corp. (IFC-T, “sector outperform”) to $184 from $179. Average: $182.20.
  • Manulife Financial Corp. (MFC-T, “sector perform”) to $29 from $25. Average: $28.46.
  • Sun Life Financial Inc. (SLF-T, “sector outperform”) to $76 from $70. Average: $70.

“Among the names we cover we continue to highlight IAG as our top pick in the space even though valuation is not quite what it was this time last year (or even a few months ago),” he said. “Despite significant year-to-date outperformance, consensus continues to be below the midpoint of Management’s 2021 core EPS guidance of $7.60 to $8.20 (using the firm’s new definition of core earnings). Coming off the company’s latest investor day we remain convinced that there is still unrealized value in this name especially given IAG’s extremely conservative reserve position and its guidance that ROE can move into the 13-15-per-cent range by 2023 even with the introduction of IFRS 17. We also continue to like SLF which despite still trading at a significant premium to peers on a price-to-book basis, is still very attractive in absolute terms with the company only trading at 10.1 times consensus 2022 earnings.”


In other analyst actions:

* Raymond James analyst Rahul Sarugaser raised Cardiol Therapeutics Inc. (CRDL-T) to “outperform” from “market perform” with a $4.25 target (unchanged). The average is $7.58.

* CIBC’s Kevin Chiang raised his Magna International Inc. (MGA-N, MG-T) target to US$113 from US$100 with an “outperformer” rating. The average is US$101.78.

* CIBC’s Krista Friesen increased her Boyd Group Services Inc. (BYD-T) target to $275 from $270 with an “outperformer” rating, while Scotia Capital’s Michael Doumet raised his target to $255 from $250 with an “sector outperform” recommendation. The average is $253.58.

“We believe the company will close its pre-pandemic SSS-gap through the end of 2022,” said Mr. Doumet. “Market share gains and auto body repair inflation (up 4.5 per cent year-over-year in March) should drive a speedier recovery than the underlying traffic/collision trends. Boyd’s pace of M&A is improving and its B/S is well-capitalized (i.e. lowest leverage ratios since 2016) for needle-moving transactions. With the economic reopening taking hold and industry fundamentals gaining momentum, we are incrementally bullish on BYD as we expect it to exit the recovery with market share gains, structural margin improvements, and several accretive/opportunistic acquisitions.”

* Ms. Friesen bumped up her Autocanada Inc. (ACQ-T) target to $48 from $41 with a “neutral” rating. The current average is $47.25.

* Canaccord Genuity’s Mark Rothschild moved his Allied Properties Real Estate Investment Trust (AP.UN-T) target to $45.50 from $43.50 with a “buy” rating. The average is $45.23.

“In our view, no asset class currently has greater uncertainty than the office sector regarding the outlook in a post-Covid world,” he said. “While some believe that many employees will chose to work from home, at least for part of the week, there are many companies that have acknowledged various issues with remote work, as well as the benefits of physical office space in building company culture and team collaboration. Perhaps no company has expressed this with greater confidence than management of Allied Properties REIT (Allied).

" In our view, this position has merit, although it will take some time before we have a clear picture of the future of the office market. In the near term, Allied continues to post stable operating results, and while vacancy has increased, management indicated that this was largely due to ‘ongoing building transformations’ and is not reflective of any change in fundamentals.”

* RBC Dominion Securities analyst Keith Mackey increased his Tervita Corp. (TEV-T) target by $1 to $6.50, exceeding the consensus by 4 cents, with a “sector perform” rating.

* ATB Capital Markets analyst David Kideckel raised his target for Valens Company Inc. (VLNS-T) to $4.50 from $3.75, maintaining an “outperform” rating. The average is currently $3.94.

* Mr. Kideckel cut his Flowr Corp. (FLWR-X) target to 45 cents from 70 cents, keeping a “speculative buy” recommendation. The average is $1.05.

* JP Morgan increased its Primo Water Corp. (PRMW-N, PRMW-T) target to US$19 from US$17 with an “overweight” recommendation. The average is US$18.68.

* Scotia Capital analyst Phil Hardie raised his target for First National Financial Corp. (FN-T) by $1 to $52 with a “sector perform” rating, while National Bank Financial’s Jaeme Gloyn bumped up his target to $51 from $49, keeping a “sector perform” recommendation. The average on the Street is $53.20.

“Investors are likely to view First National’s first-quarter earnings as mixed,” said Mr. Hardie. “While earnings fell short of expectations and commercial mortgage production was weaker than anticipated, residential volumes rose almost 60 per cent year-over-year. In that context, we do not view the earnings miss as overly concerning given that it was driven largely by the timing of commission expense that related to 2020 broker loyalty program payments that were paid in the first quarter of 2021. The quarter also saw a 12-per-cent dividend hike, with the dividend yield now sitting at 4 per cent. This follows a 7-per-cent increase announced in Q3/20 and a 50-cents per share special dividend.”

* Scotia’s Trevor Turnbull cut his Alamos Gold Inc. (AGI-N, AGI-T) target to US$11 from US$11.50 with a “sector perform” rating. The average is now $10.65.

* Scotia Capital’s Paul Steep raised his Trisura Group Ltd. (TSU-T) target to $135 from $133 with a “sector outperform” rating. The average is $138.25.

* National Bank Financial analyst Don DeMarco reduced his Fortuna Silver Mines Inc. (FVI-T) target to $10.50 from $12.50, keeping a “sector perform” rating. The average is $10.40.

* National Bank’s Vishal Shreedhar raised his Premium Brands Holdings Corp. (PBH-T) target to $130 from $125, topping the $125.73 average, with an “outperform” recommendation.

* National Bank’s Zachary Evershed raised his Hardwoods Distribution Inc. (HDI-T) target to $42 from $40 with an “outperform” rating. The average is $39.30.

* National Bank’s Jaeme Gloyn increased his target for Fairfax Financial Holdings Ltd. (FFH-T) to $700 from $625 with an “outperform” rating, while Scotia Capital’s Phil Hardie raised his target to $686 from $630 with a “sector outperform” recommendation. The current average is $657.63

* National Bank’s Shane Nagle raised his First Quantum Minerals Ltd. (FM-T) target to $35 from $32, exceeding the $32.17 average, with an “outperform” rating, while Canaccord’s Dalton Baretto also moved his target to $35 from $31 with a “buy” recommendation.

“A solid quarter that was largely in line with our estimates, which were modestly above consensus. Production and costs were in line with our expectations, while financial results were better than we had forecast. FM made no changes to its guidance,” said Mr. Baretto.

* Mr. Nagle raised his Teck Resources Ltd. (TECK.B-T) target to $32.50 from $30 with an “outperform” recommendation. The average is $31.39.

* Ahead of its May 5 earnings release, Canaccord’s Luke Hannan raised his Gildan Activewear Inc. (GIL-N, GIL-T) target to US$35 from US$29. The average is US$35.55.

“We have increased our target multiple to reflect the increasingly favourable outlook for Gildan, particularly in the context of widespread vaccination programs that suggest Gildan’s live events end-markets are set to return in the near-to-medium term. While the company’s fundamentals and outlook have improved significantly, at current valuations we believe the risk-reward profile remains unfavourable, leading us to remain on the sidelines,” he said.

* Canaccord Genuity’s T. Michael Walkley raised his BlackBerry Ltd. (BB-N, BB-T) target by US$1 to US$10 with a “hold” recommendation. The average on the Street is currently US$7.63

“We participated in BlackBerry’s Analyst Day and come away with increased conviction in the company’s focus on growing its software and services segment as the company is targeting a total $89-billion TAM by 2025,” said Mr. Walkley. “The recent management promotions to head the security and IoT verticals help solidify the company’s commitment to aligning operations with sales, which we see as critical to driving future growth. While we believe management has created a cogent long-term strategy and the business is turning the corner towards stronger trends, we await more proof in execution on the new product roadmap, evidence of cross-selling opportunities emerging, growing overall software and services revenue, and the potential for upside to our estimates before becoming more constructive on the shares. However, we believe the software and services fundamentals should improve throughout F2022 and we are encouraged by new software offerings.”

* Raymond James analyst Bryan Fast raised his target for North American Construction Group Ltd. (NOA-T) by $1 to $19, matching the consensus, with an “outperform” rating.

“Earlier this year, we upgraded North American Construction Group (NACG) to Outperform from Market Perform after the company weathered the depths of the pandemic and emerged well positioned to take advantage of an improving macro backdrop,” said Mr. Fast. “Yesterday’s results reflect NACG’s disciplined approach to cost control. Coupled with the company’s focus on efficient capital allocation and the goal of being the best contractor in the market, we view NACG in good shape to capitalize on $3-billion in potential projects that the company has sight of. We expect project decisions

in coming months, representing important catalysts as the company continues down the path of diversifying end markets (targeting 50 per cent of 2022 EBIT from non oil sands markets).”

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