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

Desjardins Securities analyst Doug Young thinks the second-quarter results for Canadian banks are likely to benefit from a faster than anticipated recovery in the global economy brought on by the acceleration of the vaccine rollout.

For the Big 6, he’s forecasting an 8-per-cent year-over-year increase in pre-provision operating profit, driven by a 21-per-cent jump in capital markets.

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However, Mr. Young does see vast disparities in that performance, estimating Toronto-Dominion Bank is likely to see a 3-per-cent profit decline while Bank of Montreal enjoys a 34-per-cent increase.

“We expect TD’s results to be weighed down by NIM compression in the US, a strong C$ (vs US$) and higher NIX, and there were several unusual items in BMO’s 2Q FY20 results,” he said. “Cash EPS comparisons are clouded by a material build in performing loan ACLs last year, whereas we expect releases this quarter. We believe the banks could beat cash EPS expectations on higher performing loan ACL releases and stronger capital markets results.”

Remaining “overweight” on the sector, Mr. Young raised his financial estimates from the second quarter through 2022. That led him to raise his target prices for bank stocks.

His changes, in order of preference, are:

  1. Toronto-Dominion Bank (TD-T, “buy”) to $92 from $84. The average on the Street is $84.99, according to Refinitiv data.
  2. Bank of Nova Scotia (BNS-T, “buy”) to $85 from $82. Average: $81.13.
  3. Canadian Western Bank (CWB-T, “buy”) to $40 from $39. Average: $35.46.
  4. Royal Bank of Canada (RY-T, “buy”) to $129 from $119. Average: $122.93.
  5. National Bank of Canada (NA-T, “buy”) to $94 from $87. Average: $91.18.
  6. Canadian Imperial Bank of Commerce (CM-T, “hold”) to $135 from $125. Average: $135.46.
  7. Bank of Montreal (BMO-T, “hold”) to $119 from $113. Average: $121.13.
  8. Laurentian Bank of Canada (LB-T, “hold”) to $43 from $41. Average: $41.30.

“The Big 6 Canadian banks on average are trading at just above their 20-year historical average P/4QF EPS multiples,” the analyst said. “However, given the volatility in the denominator, we remain focused on P/BVPS multiples, and on this basis the banks are generally trading below historical averages (see Exhibit 28 on page 18). The stocks underperformed in FY20 on the back of the unprecedented economic situation with COVID-19. Dial forward to today, and it appears (at least so far) that credit losses could end up being less than anticipated, partially due to government support programs. And now, with the accelerating vaccine roll-out, the global economy is projected to recover faster than initially anticipated. Layer on top of this the banks’ significant excess capital positions, and we believe the set-up over the next year looks good for the Canadian banks. Our view factors in various headwinds such as persistent low interest rates, a potential steady increase in net charge-offs, recent economic lockdowns and a potential return to more normal capital markets activity. That said, we are still not out of the woods yet with this pandemic.”

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RBC Dominion Securities analyst Drew McReynolds sees Points International Inc. (PCOM-Q, PTS-T) as “a differentiated way to play the re-opening.”

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Following the release of better-than-expected results after the bell on Wednesday that he sees representing a “solid” sequential improvement over a seasonally strong fourth quarter, Mr. McReynolds upgraded the Toronto-based loyalty services provider to “outperform” from a “sector perform” recommendation.

“With the pending multiyear recovery in global travel and hospitality finally seeing signs of both sustainability and acceleration, we believe Points is well positioned to benefit from renewed adjacent growth in the global loyalty industry providing investors with a low-risk, differentiated way to play the earlier stages of the recovery/re-opening,” he said in a research report. “While we acknowledge valuation is far from distressed and that the stock is well off its March/April 2020 lows, we see significant potential for accelerated earnings growth and further multiple expansion over the near-term and medium-term driven by a multi-year cyclical tailwind, a broader Points service capability and pipeline of new business that has been strengthened through COVID, a more streamlined and unified cost structure providing additional operating leverage, and what appears to be a greater emphasis from loyalty partners post-COVID on program innovation helping to further boost end-demand.”

Mr. McReynolds warns Points’ results are likely to remain “choppy” as it rebounds from the steep declines brought on by the pandemic last year, however he emphasized momentum is present after both base and promotional campaign activity accelerated in March, particularly south of the border.

“Importantly, management indicated that the early recovery is broadening with loyalty partners increasingly turning to loyalty programs not only to support the recovery but to enhance program economics,” he said.

Pointing to an encouraging recovery trajectory through 2025, he raised his revenue and earnings expectations for the next two years, leading him to increase his target for Points International shares to US$20 from US$16. The average target on the Street is US$18.50, according to Refinitiv data.

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IA Capital Markets analyst Naji Baydoun thinks “the worst is now over” for Innergex Renewable Energy Inc. (INE-T).

Following the release of in-line first-quarter 2021 financial results after the bell on Tuesday, he raised his rating for the Longueuil, Que.-based company to “buy” from a “hold,” seeing an “attractive” valuation.

“We continue to like INE’s long-term investment proposition, and believe that the Company will be able to deliver healthy FCF/share growth over time, driven by favourable industry fundamentals and its growth ambitions,” said Mr. Baydoun in a research note. “The Q1/21 update provided investors with additional clarity on the Texas situation, where the worst seems to be over for INE, and we believe that the overhang in the shares tied to this uncertainty will begin to dissipate; combined with the recent pullback in the stock, we believe that th current share price represents an attractive buying opportunity for long-term investors.”

Innergex reported normalized adjusted earnings before interest, taxes, deprecation and amortization of $113.6-million, narrowly lower than Mr. Baydoun’s $121-million estimate and the consensus projection on the Street of $122-million. Normalized free cash flow per share of 18 cents exceeded expectations (16 cents and 14 cents, respectively).

With the results, the company maintained its 2021 financial guidance. Though Mr. Baydoun said his forecast remains “slightly” lower than its expectations due to a more conservative commissioning schedule, he thinks Innergex’s project development activities will support “healthy” FCF per share results through 2025.

“INE continues to make progress on its near-term organic growth initiatives, which primarily include the (1) 226MW Griffin Trail wind project in Texas (merchant facility; US$285-million investment; COD expected in Q3/21; more than US$27-million year to EBITDA, including PTCs), and (2) 200MW Hillcrest solar project in Ohio (contracted; US$290-million investment; COD expected in Q2/21; more than USS$10-million per year to EBITDA), among other initiatives,” the analyst said. “Management noted that it continues to target additional development opportunities, particularly in solar in both the U.S. and France; we expect additional growth initiatives to materialize in 2021, which would provide further support to the overall growth outlook.”

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Mr. Baydoun maintained a $27 target for Innergex shares. The average target on the Street is $26.60.

“We continue to like INE’s (1) high-quality, low-risk asset portfolio (2.7GW net in operation, 14-year weighted average contract term), (2) healthy FCF/share growth (5-7 per cent per year, CAGR 2021-25), (3) healthy dividend (3-per-cent yield, albeit with a greater-than 80-per-cent payout over our forecast period), (4) potential upside from organic development (7GW of prospects) and M&A, and (5) the support of the Hydro-Québec strategic alliance,” he said.

Elsewhere, other analysts making target changes include:

* Desjardins Securities’ Michael Markidis to $17 from $15.50 with a “buy” rating.

“With 70 per cent of NOI coming from Ontario and Quebec, we see substantial runway for robust rent growth on new leases and renewals over the next several years,” said Mr. Markidis. “Investor demand for the asset class is strong and asset values continue to rise. The balance sheet is in excellent shape and SMU’s cost of capital has never been lower. These are the key factors underpinning our positive stance.”

* RBC’s Nelson Ng to $24 from $29 with a “sector perform” rating.

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“Although the share price decline is much larger than the value of the Texas weather impact, we believe the additional information provided by management highlights the risk of the Texas renewable projects that have financial hedges,” said Mr. Ng. “We are reducing our Price Target ... to reflect the higher risk-profile of the Texas renewable portfolio and a moderation to the value we place on the company’s growth platform. We believe the shares offer good upside, but it is balanced by the Texas uncertainty, and elevated payout ratio.”

* CIBC’s Mark Jarvi to $23 from $25 with a “neutral” rating.

“While INE wants to turn the page on recent Texas weather impacts, some unanswered questions may not allow investors to step in despite the pullback in the share price. More specifically, INE’s potential decision to walk away from two assets in Texas (and let hedge counterparty foreclose) may make financial sense, but likely won’t inspire investor confidence and increases perceived risk. A continued high payout ratio and lingering questions on balance sheet strength also don’t help,” Mr. Jarvi said.

* National Bank’s Rupert Merer to $26 from $28 with an “outperform” rating.

* TD Securities’ Sean Steuart to $23 from $28 with a “hold” rating.

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Though he reiterated his “long-term conviction” on its growth opportunity, Raymond James analyst Steve Hansen downgraded Boyd Group Services Inc. (BYD-T) on Thursday based on a series of short-term headwinds.

Moving the Winnipeg-based company to “outperform” from “strong buy,” he cited “lingering weakness in collision industry activity (Canada in particular), short-term margin compression associated with Boyd’s recent restaffing efforts, and a slower-than-expected M&A cadence in recent quarters.”

On Wednesday, Boyd reported first-quarter adjusted EBITDA of US$52.7-million, down 12.8 per cent year-over-year and missing the expectations of both Mr. Hansen (US$66.4-million) and the Street (US$63.1-million). Revenue fell 9.9 per cent to US$422-million, also falling short of estimates.

“Management’s outlook commentary maintained a cautionary tone near-term, indicating that: 1) 2Q21activity has thus far only been ‘marginally higher’ than 1Q21; 2) technician capacity constraints continue to impact select US markets; and 3) the recent decision to convert back into full production sites is expected to create a short-term drag on margins,” the analyst said. “On the positive front, management reiterated its prior commitment to double the size of its business over the next 5 yrs and suggested its pipeline remains very full. News earlier this week that Boyd has now entered the Aloha state is encouraging and likely reflects this position, although we’d like still like to see a bit more velocity given the backdrop.”

Mr. Hansen cut his target to $240 from $250. The average is $252.67.

Other analysts making target changes include:

* CIBC’s Krista Friesen to $260 from $275 with an “outperformer” rating

“BYD reported Q1 results that were weaker than expected. While top-line results were impacted by lower demand levels, particularly in Canada, margins were impacted by BYD’s decision to prepare for the eventual recovery. While BYD may not have timed the recovery perfectly, it is prepared for when demand does reach pre-pandemic levels,” said Ms. Friesen.

* National Bank’s Zachary Evershed to $260 from $265 with an “outperform” rating.

* Scotia Capital’s Michael Doumet to $245 from $255 with a “sector outperform” rating.

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A group of equity analysts on the Street raised their target prices for units of Summit Industrial Income REIT (SMU.UN-T) with the release of in-line financial results for the first quarter and an increase to its monthly distribution.

On Tuesday after the bell, the Toronto-based REIT reported funds from operations per unit of 17 cents, a penny better than the consensus forecast, with occupancy at 98.2 per cent and same store net operating income up 2.6 per cent year-over-year. It increased its monthly distribution by 4.4 per cent to 4.7 cents per unit (or 56.4 cents annualized).

IA Capital Markets analyst Frédéric Blondeau said Summit is “firing on all cylinders,” calling its performance “solid” in an “exceptionally strong operating environment.”

Keeping a “hold” recommendation for its shares, he raised his target to $16 from $14. The average on the Street is $16.17.

Others making changes include:

* CIBC’s Dean Wilkinson to $16.50 from $15 with a “neutral” rating.

“With land acquisitions and the unveiling of nearly 1.8 million sq. ft. of expansion opportunities on embedded land holdings in the REIT’s portfolio, Summit’s development focus is kicking into a higher gear. At Q1, the development pipeline comprised 4 per cent of pro forma GLA, and, indeed, could represent over 15 per cent of portfolio GLA if longer-term projects are included. At attractive spreads exceeding 100 bps over acquisition cap rates, the pipeline could be a material source of future NAV growth and enhancement to portfolio age and quality. Moreover, market fundamentals remain robust in the REIT’s core markets of Toronto and Montreal, and are expected to continue driving strong organic growth and positive momentum on lease renewals. While we continue to like the multiple growth drivers that Summit possesses, these positive factors are arguably already largely reflected in the trading price,” said Mr. Wilkinson.

* Scotia Capital’s Himanshu Gupta to $16.50 from $15.50 with a “sector outperform” rating.

* National Bank Financial analyst Matt Kornack to $18 from $17 with an “outperform” rating

* Raymond James’ Brad Sturges to $17.50 from $17 with an “outperform” recommendation.

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In the wake of a “strong” first-quarter beat, Desjardins Securities analyst David Newman sees Ag Growth International Inc. (AFN-T) “set up for a robust year of growth,” pointing to its increasing backlog.

Late Wednesday, the Winnipeg-based company reported quarterly EBITDA of $39-million, blowing past both Mr. Newman’s $30-million estimate and the consensus projection of $31-million. Margin expanded to 15.3 per cent, exceeding the analyst’s 12.2-per-cent projection, which he attributed to product and segment mix, total sales volume, slightly reduced expenses and operational efficiencies.

“Given limited impacts of COVID-19 in 1Q20 and steel dynamics in 1Q21, we believe the beat represents a relatively clean view of AGI’s progress in operational productivity improvements, market share gains and diversification (platforms and geographies),” he said.

“Trade sales in 2021 should exceed 2020 levels; we are forecasting $1.1-billion. In addition to a stronger Canadian dollar, steel dynamics could present a margin headwind in 2Q and 3Q, mainly to the Farm segment, before normalizing in 4Q. We expect 2021 EBITDA of $164-million for a 15-per-cent margin, flat vs a year ago as the strong margin in 1Q and expected in 4Q should offset the dip in 2Q and 3Q. However, except for surcharges, price increases taken throughout this year should expand margins in 2022. Coupled with efficiency gains and strong broad-based demand, management believes it could grow EBITDA margins by 100–200bps to 16–17 per cent in the next few years.”

Mr. Newman called the 9.3-per-cent drop in the company’s share price on Wednesday an overreaction to a series of near-term headwinds, including steel, FX and COVID-19 struggles in India and Brazil.

“We remain constructive on AGI’s full-year outlook and have raised our 2022 estimates given stellar global demand, expanded margins and efficiency gains,” he said.

Keeping a “buy” rating for Ag Growth shares, he raised his target to $60 from $57. The average on the Street is $54.

Elsewhere, RBC’s Andrew Wong reduced his target to $54 from $55 with an “outperform” rating.

“We think the ag environment for AGI is the most favourable in over 10 years, with a combination of high crop prices and high crop volumes, which should drive strong sales growth. While higher steel input costs are a concern, AGI has proven its ability to navigate these challenges and we are confident the company should be able to do so again with only a moderate impact on margins,” he said.

Scotia Capital’s Michael Doumet lowered his target to $48 from $50 with a “sector perform” rating.

“There were several moving parts in the results and outlook,” said Mr. Doumet. “Overall, our takeaway from management’s commentary was that the 1Q21 beat came at the expense of lower 2Q21 and 3Q21 expectations. The dynamic that is playing out is similar to several manufacturing companies, whereby customers have pulled forward purchases (to get ahead of price increases) and whereby, despite price passthroughs, the company expects to face incremental margin pressure in 2Q21 and 3Q21. While management talked down 2Q21 and 3Q21 versus consensus, they thought the company would come in “at or above consensus” (EBITDA of $168 million) for the full year. As such, the primary disappointment in the release and outlook is that the near-term EBITDA growth catalysts are being deferred.”

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With recent improvements in lithium prices and signs of stronger demand for electric vehicles, RBC Dominion Securities analyst Arun Viswanathan raised his rating for Albemarle Corp. (ALB-N) to “sector perform” from “underperform.”

“While our initial downgrade to Underperform in October 2020 was based on our view that valuations were outpacing weakened lithium fundamentals, we now see the tide turning as lithium prices show firmer signs of recovery from the December lows and greater demand due to increased EV demand,” he said. “We also believe the temporary one-year price concession is likely behind, given the tighter supply environment.”

The move comes a week after the Charlotte-based chemicals producer reported better-than-anticipated first-quarter results and raised its 2021 EBITDA guidance for its lithium segment by high-single digits year-over-year with the expectation of higher volumes from North American plant restarts, productivity improvements and tolling.

That led Mr. Viswanathan to raise his 2021 and 2022 earnings estimates, leading to an increased in his target for Albermarle shares to US$168 from US$135. The average is US$161.23.

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Intertape Polymer Group Inc.’s (ITP-T) continued strong execution should support multiple expansion, according to CIBC World Markets analyst Hamir Patel, who thinks “demand trends in e-commerce and building/construction end-markets should remain resilient throughout the year.”

Also seeing strong market conditions allowing the Quebec-based company to “pass on near-term escalation in input costs,” Mr. Patel raised his 2021 EBITDA estimate by 4 per cent to $250-million. He also increased his 2022 projection by 6 per cent to $263-million, which is a the high end of its guidance range ($235-$250-million) .

“While Census Bureau stats for 2020 indicate channel sales rose 32 per cent last year, ITP’s growth in the channel last year of 40 per cent was closer to Amazon’s 38-per-cent top-line growth,” he said. “Although Census Bureau stats for Q1 e-commerce sales will only be released next week, Amazon’s 44-per-cent comps in Q1 and Q2 guide of positive 24-30 per cent year-over-year comps suggest another strong year for ITP’s largest channel. In the same way the pandemic likely accelerated e-commerce demand by two to five years, the building/construction end-market will likely be up double digits in 2020 based on housing starts trends (and likely to hold at elevated levels for several years given low mortgage rates and demographic trends).”

Keeping an “outperformer” rating, Mr. Patel raised his target to $39 from $37. The average is $37.17.

“ITP’s FCF yield of 6.8 per cent in 2022 compares favorably to the 5.0-per-cent average yield of its two Canadian plastic packaging peers,” he said.

Others making target adjustments include:

* Scotia Capital’s Michael Doumet to $39 from $38 with a “sector outperform” rating.

“The 1Q21 beat underscores the fundamental strength in the business, as the company benefited from a structurally enhanced margin profile against a favourable backdrop for industrial and ecommerce end-markets,” said Mr. Doumet. “To take it one step further, the extent of the beat bodes well for the balance of 2021 (2021 EBITDA guidance was raised 5 per cent, at the mid-point) as the company has effectively managed the price/spread through 1Q21 and so far into 2Q21. We raised our 2021 EBITDA to the upper end of the guided range and, despite that, we believe our estimates continue to have upside risk. ITP remains one of the most attractive equities under our coverage.”

* RBC’s Walter Spracklin to $36 from $32 with an “outperform” rating.

“ITP continues to be a significant beneficiary of the pandemic-induced acceleration of e-commerce - a secular trend that appears to have accelerated during Q1,” said Mr. Spracklin. “We see this, coupled with impressive spread management (attributable to ITP’s “at-will” pricing strategy) during a period of rapidly rising commodity prices, as driving the impressive performance seen during the quarter.”

* National Bank’s Zachary Evershed to $38.50 from $34 with an “outperform” rating.

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In other analyst actions:

* In response to its updated guidance and seeing improved balance sheet visibility, BMO Nesbitt Burns analyst Randy Ollenberger raised his rating for Birchcliff Energy Ltd. (BIR-T) to “outperform” from “market perform” with a $4.25 target, rising from $3.70 and 3 cents higher than the consensus.

“Birchcliff reported Q1/21 operating and financial results that were in line with expectations,” he said. “The company increased its production guidance while maintaining its capital budget, which we view positively. Birchcliff continues to work towards maximizing free cash flow and reducing debt. At current prices, we believe that the shares are attractively valued and should continue to appreciate as the company reduces financial leverage. We are upgrading our investment opinion.”

* “With recent strength in oil prices accelerating the Company’s debt repayment strategy and visible pathway to FCF that can be returned to its shareholders,” Stifel analyst Cody Kwong upgraded Bonterra Energy Corp. (BNE-T) to “hold” from “sell” with a $4.25 target, up from $3.50. The average is $3.82.

“With quality oil weighted assets that are primarily focused in the well-known Pembina Cardium field of Central Alberta, Bonterra represents an equity option on rising crude oil prices given its operational leverage and low share count, though until such time, remains challenged within the context of its dubious liquidity profile and challenging pathway to make gains on its financial standing,” said Mr. Kwong. “The recent addition of the EDC and BDC loan programs does give Bonterra some breathing room over the next 12 months, and if oil prices continue to recover, like we think they will, could help kickstart a more sustainable investment opportunity.”

* Though its quarterly results fell short of his expectations, Raymond James analyst Frederic Bastien upgraded Dexterra Group Inc. (DXT-T) to “outperform” from “market perform” with an $8.50 target, up from $6.50. The average on the Street is $7.56.

“Some positive developments have emerged to materially strengthen the firm’s outlook for the remainder of the year,” said Mr. Bastien. “These include the award of a 5-year services contract in Northern Alberta that should bolster WFES revenue to the tune of $30-million annually, pending contract awards and manufacturing efficiency gains for Modular Solutions, and a line of sight to over $200-million of revenue that Facilities Management is actively pursuing. This organic growth momentum, combined with the flexibility that a much improved balance sheet now affords capital-light DXT, particularly with respect to potential M&A growth, gives us sufficient visibility to roll our valuation forward to 2022.”

* With the growth accelerating in the U.S. sunbelt multifamily sector and seeing “deep” value versus peers, Raymond James analyst Brad Sturges upgraded BSR Real Estate Investment Trust (HOM.U-T) to “strong buy” from “outperform” with a US$13.50, up from US$13 and above the US$13.05 average.

* Touting its “uniquely independent” digital farm management platform and seeing it poised to scale and add high-value services, Raymond James analyst Steve Hansen initiated coverage of Farmers Edge Inc. (FDGE-T) with a “market perform” rating and $15 target. The average on the Street is $24.33.

“In short, while we’re clearly excited over the company’s growth prospects, we also believe that: 1) Street expectations are a likely too high out of the gate (particularly in 2022/2023); and 2) the current trading multiple is fair given the company’s market position and the relative growth we foresee,” he said.

* RBC Dominion Securities analyst Robert Kwan raised his Keyera Corp. (KEY-T) target to $33 from $29 with an “outperform” rating, while Credit Suisse’s Andrew Kuske bumped up his target to $34 from $30 also with an “outperform” recommendation and Scotia Capital’s Robert Hope increased his target to $32 from $29 with a “sector outperform” rating. The average is currently $30.35.

“We have a favourable view of Keyera’s Q1/21 given results were above expectations and the Marketing guidance for 2021 is materially higher than our forecast,” said Mr. Hope. “Our 2021 free cash flow per share estimates increase by 9 per cent to reflect the better Marketing guidance and slightly improved results from its Liquids Infrastructure and Gathering and Processing (G&P) assets. Our 2022 and 2023 estimates increase slightly to reflect a more robust growth outlook, partially offset by higher taxes in 2022. Our target price increases to $32 from $29 to reflect a more clear and robust growth environment (including higher estimates.”

* RBC’s Walter Spracklin lowered his target for Andlauer Healthcare Group Inc. (AND-T) to $46 from $50 with an “outperform” rating, while TD Securities’ Tim James raised his target to $43 from $42 with a “hold” rating and CIBC’s Kevin Chiang cut his target to $44 from $47 with a “neutral” recommendation. The average is $43.75.

“Our long-term positive thesis on AND reflects our view that the company benefits from a wide competitive moat and a deep organic and inorganic pipeline of opportunities. We also believe the company is being conservative with its margin assumptions and see upside relative to its historical normalized range given its performance the past year. While our earnings estimates move higher, we have lowered our price target,” said Mr. Chiang.

* Desjardins Securities analyst Doug Young increased his Intact Financial Corp. (IFC-T) target to $185 from $180 with a “buy” rating.

“The outperformance was mainly driven by higher favourable prior-year reserve developments (PYRD). From a divisional perspective, the Canadian businesses outperformed our expectations, offset by a miss in the U.S.. The RSA acquisition is on track,” he said.

“We like IFC’s high-quality management team, the RSA acquisition and the outlook for the P&C insurance sector over the next year.”

* National Bank’s Maxim Sytchev bumped up his Bird Construction Inc. (BDT-T) target to $11 from $10.50, keeping an “outperform” rating, while TD Securities’ Michael Tupholme raised his target to $11.50 from $10.50 with a “buy” rating. The average is $11.19.

* National Bank’s Endri Leno cut his IMV Inc. (IMV-T) target to $4.25 from $5.25, which is below the $8.07 average.

* National Bank’s Dan Payne raised his Headwater Exploration Inc. (HWX-T) target to $5.50 from $4.50 with an “outperform” rating. The average is $5.64.

* National Bank’s Jaeme Gloyn increased his Goeasy Ltd. (GSY-T) target to $167 from $156 with an “outperform” recommendation. The current average is $175.67.

* CIBC World Markets analyst Bryce Adams increased his Hudbay Minerals Inc. (HBM-T) target to $14 from $13 with an “outperformer” rating, while Scotia Capital’s Orest Wowkodaw trimmed his target to $13 from $14 with a “sector outperform” rating. The average is $12.97.

“HBM reported weaker-than-anticipated Q1/21 results although 2021 guidance was reaffirmed. The company’s near-term growth projects remain on track. Overall, we view the update as a modest negative for the shares. Despite the miss, HBM shares are rated SO based on an attractive valuation, significant leverage to higher Cu-Au prices, and several likely catalysts on the horizon,” said Mr. Wowkodaw.

* Mr. Wowkodaw also cut his target for Turquoise Hill Resources Ltd. (TRQ-T) to $30 from $32 with a “sector outperform” rating. The average is $25.84.

“Although TRQ technically reaffirmed the estimated timeline and capex for the Phase II underground project at Oyu Tolgoi, the company warned that COVID-19 related delays were putting increasing pressure on the current schedule and budget,” he said. “Overall, we view the update as negative for the shares given the increasing risks to the timeline, capex, and ultimately, funding requirements. Despite the increasing risks, we rate TRQ shares SO based on relative valuation and the scarcity of high-quality Cu projects.”

* CIBC’s Dean Wilkinson raised his Dream Unlimited Corp. (DRM-T) target to $29 from $27 with an “outperformer” rating, while Canaccord Genuity’s Mark Rothschild increased his target to $32.50 from $27 with a “buy” rating. The average is $30.50.

“Dream Unlimited continues to progress at a number of its development projects, which should drive both cash flow and NAV growth over the next few years. However, the growth of its assets under management as well as a recovery in the Western Canada housing market are, in our view, the more exciting near-term drivers of cash flow growth” said Mr. Rothschild.

* TD Securities analyst Derek Lessard raised his Savaria Corp. (SIS-T) target to $25 from $23 with a “buy” rating, while Scotia Capital’s Michael Doumet increased his target to $22 from $20.50 with a “sector outperform” recommendation and Desjardins Securities’ Frederic Tremblay bumped up his target to $24 from $22 with a “buy” rating. The average is $22.31.

“Savaria had a strong start to 2021, with a 1Q beat and solid performance from Handicare since the acquisition was completed in March,” said Mr. Tremblay. “We expect 2Q to represent an important inflection point for the company, notably with a return of positive organic growth in Accessibility and a first three-month contribution from Handicare. Post-2Q, we expect momentum to build thanks to synergies and reopenings.”

* Both TD’s Sam Damiani and iA Capital Markets’ Frédéric Blondeau raised their Firm Capital Mortgage Investment Corp. (FC-T) targets to $15.50 from $15 with “buy” recommendations. The average on the Street is $15.25.

* Credit Suisse analyst Mike Rizvanovic raised his ECN Capital Corp. (ECN-T) target by $1 to $11, maintaining an “outperform” rating. The average is $10.25.

* Scotia Capital analyst Paul Steep raised his Dye & Durham Ltd. (DND-T) target to $58 from $57 with a “sector outperform” rating, while BMO Nesbitt Burns’ Thanos Moschopoulos cut his target to $53 from $55 with an “outperform” rating. The average is $57.20.

“Our view is that Dye & Durham delivered solid results in Q3, reflecting year-over-year organic and acquired growth, with the firm benefitting from increased transaction volumes in each of its geographies based on reopening momentum,” said Mr. Steep. “Our view is that the firm’s financial results will continue to be fueled by its organic growth and integration of acquisitions (e.g., GlobalX, DoProcess, SAI Global Property Division, PIE) that have been completed during the past year. We believe that DND’s existing mix of business and geographic markets offers the potential for further acquisitions given that legal information and software markets remain fragmented. Our near-term focus for DND’s financial performance remains centered on the firm’s integration and on-boarding efforts given recent M&A activities.”

* Scotia’s Tanya Jakusconek cut her Kinross Gold Corp. (KGC-N, K-T) target to US$13 from US$13.50 with a “sector outperform” rating. The average is US$10.99.

* Scotia’s Trevor Turnbull cut his Lundin Gold Inc. (LUG-T) target to $14 from $15, below the $15.09 average, with a “sector outperform” rating.

* Scotia’s Scott Macdonald lowered his Mountain Province Diamonds Inc. (MPVD-T) target to 5 cents from 10 cents with a “sector underperform” rating. The average is 50 cents.

“With its Q1/21 financials, MPVD released its (delayed) 2021 guidance that was weaker than expected and also announced that it has agreed to another US$33-million short-term loan from its major shareholder to fill a previously announced short-term funding gap expected in Q2. While the loan meets the immediate liquidity concerns, it won’t address MPVD’s funding needs later in the year as its current debt comes due. In other words, with US$58-million of debt maturities in 2H/21 and a further US$300M in 2022, MPVD’s balance sheet is far from out of the woods,” he said.

* Scotia’s Justin Strong trimmed his Northland Power Inc. (NPI-T) target to $48.25 from $52 with a “sector outperform” rating. The average is $52.63.

“The quarter was largely absent of new information, save the release of the company’s 2020 sustainability report,” said Mr. Strong. “We take this opportunity, though, to align the multiples by which we value the various streams to better reflect where we see the market as currently trading. Specifically, we’ve reduced our 2023E EV/EBITDA multiples for the offshore wind and onshore renewables streams by 0.5 times and 1.0 times turns, respectively.”

* Acumen Capital analyst Nick Corcoran raised his Boston Pizza Royalties Income Fund (BPF.UN-T) target to $14.50 from $13 target, which is the consensus, with a “buy” rating.

“While the network will face headwinds from additional restrictions, the network remains well positioned to weather the storm and the distribution has been set at a sustainable level (with another special distribution prior to yearend possible),” he said.

* TD Securities analyst Aaron MacNeil raised his Trican Well Service Ltd. (TCW-T) target to $2.50 from $2.25 with a “hold” rating. The average is $2.49.

* TD’s John Mould cut his TransAlta Renewables Inc. (RNW-T) target to $20 from $21, maintaining a “hold” rating. The average is currently $20.19.

* TD’s Daryl Young increased his target for Superior Plus Corp. (SPB-T) to $17 from $16.50 with a “buy” rating. The average is $15.06.

* TD’s Derek Lessard bumped up his Pizza Pizza Royalty Corp. (PZA-T) target to $12.50 from $12. He’s currently the lone analyst covering the stock.

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