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

Calling ita top-tier compounder,” RBC Dominion Securities analyst Matt Logan thinks the “future remains brighter than ever” for Colliers International Group Inc. (CIGI-T, CIGI-Q), citing its “robust organic growth, continued progress building key growth engines, and a balance sheet primed for acquisitions.”

On Wednesday before the bell, the Toronto-based diversified professional services and investment management company reported revenues for the second quarter of US$946-million, up 72 per cent year-over-year and beating Mr. Logan’s projection by 28 per cent (US$740.6-million) and the consensus estimate by 26 per cent (US$750-million). Adjusted EBITDA increased 128 per cent year-over-year to US$137-million, also blowing past expectations by 71 per cent (US$79.8-million) and 69 per cent (US$80.9-million), respectively.

“While a faster-than-expected rebound in sales brokerage drove most of the variance, several factors increase our confidence: 1) recurring revenue was 7 per cent ahead of our forecast, underpinned by high-teens organic growth; 2) D/EBITDA declined 0.2 times quarter-over-quarter to 0.9 times (vs. the post-spin average of 1.4 times); and 3) efficiency gains should translate into sustained EBITDA margins of 13.5 per cent-plus in 2022,” said Mr. Logan.

Concurrently with the “strong” results, Colliers raised its 2021 guidance by 6 per cent. It now sees revenue growth of 20-30 per cent and adjusted EBITDA of 25-35 per cent, rising from its previous expectations of 15-30 per cent.

“Colliers International Group continues to demonstrate top-tier compounding power with a 25-per-cent two-year adjusted EBITDA CAGR in Q2/21 and 17 per cent in 2019–2021,” the analyst said. “Looking ahead, we believe CIGI’s evolution into a highly diversified real estate services firm remains underappreciated by investors, with shares trading at a 21 times 2022 estimated P/E multiple compared with 20 times for the S&P 500—despite a stronger growth outlook and significant recurring EBITDA.”

After raising his revenue and earnings expectations through 2022, Mr. Logan hiked his target for Colliers shares to US$160 from US$135, contending they deserve a premium multiple, with an “outperform” recommendation. The average on the Street is $139.50.

“While shares have rallied approximately 48 per cent year-to-date, we remain constructive on the multi-year outlook for the business,” he said “Shares are trading at 12.5 times 2022 estimated EBITDA vs. the normalized 11.0-times average since the 2015 spin-out — warranted, in our view, in light of CIGI’s continued evolution and strong track record (i.e., 21-per-cent EBITDA CAGR in 2004–20).”

Elsewhere, others making target changes include:

* Raymond James’ Frederic Bastien to US$150 from US$130 with an “outperform” rating.

“The company delivered an Andre De Grasse-like quarterly performance and raised its outlook for the current year,” he said. “With its globally diversified platform, enterprising culture and low leverage, CIGI’s runway for growth remains long and wide, in our opinion.”

* BMO’s Stephen MacLeod to US$148 from US$136 with an “outperform” rating.

“Colliers reported a solid Q2/21 beat and increased 2021E revenue and EBITDA guidance,” said Mr. MacLeod. “While H2 EBITDA growth is expected to moderate from H1, we believe the earnings bias is to the upside. We continue to believe Colliers is well positioned to participate in a recovery, given its solid competitive position, diversification, liquidity, technology investments, and entrepreneurial culture. While valuation has moved higher, our SOTP valuation pushes $148-159.”

* CIBC’s Scott Fromson raised his target to US$160 from US$135 with an “outperformer” rating.

“CIGI’s Q2 results blew estimates out of the water – by way more than portended by the strong beat last week by CBRE US (and CIGI’s own Q1 beat),” he said. “The company showed strength across service lines (particularly Capital Markets and a recovering Leasing business) and regions (particularly the Americas). Once again, management increased its financial outlook, which may prove conservative – we are increasing our estimates to reflect. CIGI provides good exposure to recoveries in leasing (as the global economy continues to rebound) and transaction volumes (as investment managers deploy capital following significant raisings). CIGI’s large recurring-revenue presence (Outsourcing & Advisory and Investment Management) smooths out more variable transaction businesses. Further, we could see catalysts from acquisitions.”


Pointing to “escalating concerns over the demand-side impact of North American drought conditions and still stratospheric steel prices,” Raymond James analyst Steve Hansen lowered his rating for Ag Growth International Inc. (AFN-T) to “outperform” from “strong buy.”

“According to Agriculture & Agri-Food Canada (AAFC), old crop carryout stocks are projected to fall to their lowest level in eight years on the back of record exports of grains, oilseeds and pulse crops — a trend evident in record CN/CP grain shipments over the past year,” he said. “As a result, farmer bins are looking pretty lean heading into this year’s harvest, thus subduing the ‘need’ for incremental storage on the margin. U.S. ending stocks data point to a similarly lean starting point.”

“The acute drought sweeping key regions of the North American grain basket is only expected to further erode incremental demand, in our view. Conditions aren’t universally bad; there are several key regions faring far better than others (i.e. eastern corn belt looks solid). However, with aggregate yield expectations dropping sharply in recent months, particularly in the southern prairies and northern tier states, we ultimately expect there will be less crop volume to handle/store this fall (and thus lower storage/auger demand). AAFC’s latest forecast supports this weaker yield outlook, recently calling for total production of principal field crops to decline by 3.7 per cent year-over-year, although this estimate is based upon June survey conditions that have since worsened.”

After cutting his estimates for the second half of 2021 and full-year 2022 to “reflect a more cautious demand & margin outlook,” Mr. Hansen trimmed his target for Ag Growth shares to $55 from $62. The average is $54.88.


Though he thinks Stantec Inc.’s (STN-T) second-quarter results were “solid,” National Bank Financial analyst Maxim Sytchev thinks its shares are “likely to be more range-bound and would like a better risk/reward interplay to become aggressive buyers of the name.”

Accordingly, he lowered the Edmonton-based international professional services company to “sector perform” from “outperform,” pointing to a return of 88 per cent since a Nov. 19 upgrade (versus a 42-per-cent rise in the TSX).

“At 15.0 times EV/EBITDA on 2022 for STN, investors are looking for growth,” said Mr. Sytchev. “And the latter can take multiple forms – organic momentum, M&A, capital returns. If, however, there is a sense that two or three of those levers are absent (vs. expectations to be incremental) vis-à-vis the scale of the company, we have to ask a question whether the shares are due for a breather. On M&A, there is also more competition from financial players while the U.S. is still proving a troubled spot for the company – we are now talking about flat organic growth for 2021. We’ve followed STN for a long time, and we have seen shares gap-up and then settle for a while. In 2008, we had Urban land that came unglued on the back of U.S. spurt, in 2014 oil & gas became an issue while in 2020 (on top of much improved execution) we got an ESG/U.S. stimulus hopes re-rating.”

He maintained a $66 target for Stantec shares. The current average on the Street is $63.

Elsewhere, BMO Nesbitt Burns analyst Devin Dodge raised his target to $67 from $65, exceeding the $63 with an “outperform” rating.

“While results were largely consistent with expectations, we believe there were encouraging signs in the Q2 report including strong contract wins and financial guidance being nudged higher,” he said. “We believe there are multiple paths for financial performance to exceed our estimates while STN’s valuation is attractive relative to its global engineering & design peers.”


Following a second-quarter earnings beat and seeing North American bookings “climbing out of the doldrums,” Raymond James analyst Andrew Bradford raised his rating for Enerflex Ltd. (EFX-T) to “outperform” from “market perform.”

After the bell on Wednesday, the Calgary-based supplier of products and services to the energy industry reported EBITDA for the quarter of $36-million, exceeding the $34-million consensus estimate with its U.S. Service business displaying its best performance since the start of the pandemic

“For the better part of 2021 we have been advising patience on Enerflex,” said Mr. Bradford. “The minimal E&P infrastructure spending has resulted in historically low Engineered Systems bookings and an uncertain outlook for EFX’s formerly largest segment. EFX’s equity has generally traded in sympathy with its pace of bookings and not surprisingly the net result has been an equity that is flat since the start of the year (up just 3 per cent versus 43 per cent for its Canadian OFS peers).

“Now at $6.77, we believe the market is overpricing the impact of a slow Engineered Systems segment and not giving sufficient credit for the reoccurring revenue from its rentals and service business lines. Assigning a multiple in-line with its US contract compression peer group (approx. 7.5 times) to EFX’s Rental and Service run-rate EBITDA implies negative residual value for the Engineered Systems segment. While we expect engineered systems to move in fits-and starts as E&Ps exercise capital discipline, the negative value placed on its Engineered Systems business line, a 12.8-times multiple on 2022 estimated earnings, and 22-per-cent yield on estimated 2022 free cash flow compels us to increase our rating.”

The analyst maintained a $9.25 target, which falls below the $11.42 average.


2021 has been “a year of significant transformation” for Dream Industrial Real Estate Investment Trust (DIR.UN-T), according to Desjardins Securities analyst Michael Markidis, who sees its $1.3-billion acquisition of 31 European properties and subsequent sale of several U.S. assets drastically altering its geographic footprint.

“Pro forma, we see Europe at 39 per cent (vs 14 per cent at the end of 1Q21) and the U.S. at only 4 per cent (vs 17 per cent),” he said. “Long-term targets have not been specified; however, we believe management is planning to keep more than 50 per cent of the asset base within Canada; the pro forma weighting is 57 per cent.

“Worth noting, DIR increased its average market rent estimate for Ontario by 10 per cent (to $10.27 per square feet) and for Québec by 7 per cent (to $8.16/sf). The gap vs in-place rent in each region now stands at 38 per cent and 17 per cent, respectively. In both Toronto and Montréal, availability is extremely low, absorption is strong and supply risk is relatively benign. We thus see room for continued rent growth in 2H21.”

On Tuesday, the Toronto-based REIT reported a slight second-quarter beat with funds from operations unit of 19 cents, a penny above both Mr. Markidis’s estimate and the consensus projection on the Street

“Strong underlying operating performance was characterized by mid-single-digit same-property NOI growth, robust leasing spreads and continued growth in management’s average market rent estimates,” he said.

Maintaining a “buy” recommendation, the analyst raised his target by $1 to $17. The average is $16.97.

“Pro forma leverage is within the targeted range (mid- to high 30 per cent) and the effective cost of debt has been dramatically reduced,” he said.

Other analysts making target adjustments include:

* Canaccord’s Brendon Abrams to $17.25 from $16.25 with a “buy” rating.

“The quarter was highlighted by an exceptionally strong pace of acquisition activity, with $1.5 billion of properties acquired since the beginning of Q2/21 and nearly $1.9 billion acquired or under contract since the beginning of 2021,” said Mr. Abrams. “At the same time, the REIT has capitalized on strong investor demand for industrial real estate by selling the majority of its U.S. portfolio, which will enable it to recycle capital into assets with higher expected returns. We remain bullish on Dream Industrial and view it as an attractive way for investors to gain exposure to the industrial real estate sector. The REIT features a high-quality and geographically diversified portfolio, strong balance sheet, and a management team that has executed extremely well on several major initiatives over the past several years.”

* CIBC’s Dean Wilkinson to $17.50 from $16.50 with an “outperformer” rating.

“With the establishment of the U.S. industrial JV, DIR opens a new avenue of growth into its U.S. target markets as well as capitalizes on an opportunity to generate fee income (property management fees, construction management and leasing fees),” he said. “The JV also provides a source of liquidity for the REIT, recapturing significant acquisition capacity to deploy into potentially higher growth markets. On that front, DIR continues to execute on its acquisition pipeline with a potential $200-million around the corner, and is also making significant progress on its development pipeline with two expansions scheduled to begin this upcoming quarter at compelling development yields above 6.5 per cent. All the meanwhile, DIR possess a solid balance sheet with below-average leverage and ample liquidity. We continue to view the REIT favourably given its growth prospects and strong market fundamentals across its core geographies.”


Ahead of the Aug. 11 release of its second-quarter results, Desjardins Securities analyst Kevin Krishnaratne thinks Converge Technology Solutions Corp. (CTS-T) is “well-aligned to benefit from strong software and cloud industry tailwinds.”

“We expect a solid quarter with 15-per-cent quarter-over-quarter organic growth in managed services ARR and continued software/hybrid cloud gains given positive industry tailwinds observed so far this quarter from other IT providers, VARs and tech vendors,” he said.

For the quarter, Mr. Krishnaratne is forecasting revenue of $373.3-million, up from $227.8-million during the same period a year ago and narrowly higher than the consensus on the Street of $370.6-million.

“Given CTS’s growing mix of software, managed services and cloud revenue, we see gross profit of $87.4-million for a margin of 23.4 per cent vs 21.9 per cent in 1Q, which was light given a large hardware-centric Canadian government contract,” he said. “Our adjusted EBITDA forecast of $23.4-million reflects a margin of 6.3 per cent vs 6.0 per cent in 1Q, as we include upside from recent cost savings (annualized $8-million starting in 2Q), while we also acknowledge a return to more normalized travel and entertainment expenses. FCF is expected to revert to positive territory at $42.3-million vs negative $7.8-million in 1Q due to working capital normalization.”

Seeing its shares “undervalued” versus its peers, Mr. Krishnaratne raised his target to $13 from $11 with a “buy” recommendation. The average on the Street is $11.25.

“Trading at approximately 12.0 times 2022 EBITDA, CTS looks attractive compared with North American peers at 15.0 times and European peers at 18.0 times,” he said. “Our analysis of VARs across North America and Europe shows how CTS’s organic gross profit growth of at least 15 per cent and EBITDA margin on gross profit of 30 per cent is comparable vs several peers. We continue to see upside to gross profit–related metrics via the layering of high-margin managed services revenue, such as its iSeries service, and as it leverages its recent acquisition of ExactlyIT.”


A day after strong quarterly results sent its shares soaring by almost 15.5 per cent, several analysts raised their targets for Sleep Country Canada Holdings Inc. (ZZZ-T).

Driven by continued ecommerce gains, the retailer reported revenue of $192.2-million, up 67.3 per cent year over year and topping the consensus estimate on the Street of $167.8-million. Adjusted diluted earnings per share jumped 254.5 per cent to 48 cents, also easily topping the consensus of 31 cents.

Analysts making changes include:

* CIBC World Markets’ John Zamparo to $41 from $38 with an “outperformer” rating. The average target is $40.

“It’s difficult to find a flaw in ZZZ’s Q2: sales and profitability were well ahead of consensus estimates, the balance sheet has never been in better shape, all while stores were heavily restricted. Despite this, valuation—even after today’s 15-per-cent move—still trails historical averages,” he said. “Meanwhile, we find the argument (held by some) that Sleep Country is the beneficiary of a one-time pandemic surge to be unconvincing. We view ZZZ as a quality business with sound strategic decisions, and continued execution, with the potential for a material capital return program, and with the benefit of improved operating conditions.”

* BMO Nesbitt Burns’ Stephen MacLeod to $42 from $40 with an “outperform” rating.

“Sleep Country’s strong omnichannel positioning shone through again, with 31-per-cent e-commerce growth (after four quarters of triple-digit growth) complemented by in-store sales recovery (up 90 per cent year-over-year),” said Mr. MacLeod. “Sleep Country is still early in its digital journey, with a multi-year opportunity for ecommerce growth and market share gains for everything ‘sleep,’ including renewed focus on health & wellbeing. We see attractive risk-reward (7.2 times 2022 estimated EV/EBITDA).”

* RBC Dominion Securities’ Sabahat Khan to $33 from $32 with a “sector perform” rating.

* TD Securities’ Meaghen Annett to $43 from $41 with a “buy” rating.

* Scotia Capital’s Patricia Baker to $42 from $40 with a “sector outperform” rating.

* National Bank Financial’s Vishal Shreedhar to $58 from $56 with a “sector perform” rating.


Finning International Inc. (FTT-T) is “well positioned for remainder of 2021,” according to RBC Dominion Securities analyst Sabahat Khan, pointing to its “strong recent progress” and its outlook for further improvement.

“Q2 results were ahead of expectations and reflected notable progress towards a number of initiatives outlined by management at the company’s recent investor event,” he said. “These include: 1) cost rationalization measures helping drive operating leverage (Q2 revenue was up 28 per cent year-over-year while SG&A was up 2 per cent year-over-year); 2) significant improvement in ROIC as the demand environment normalizes; 3) data and digital insights from connected machines helping the company ensure it has the “right” inventory (which also contributes to improved inventory turns); and, 4) leading with digital capabilities is helping secure significant wins (HS2 equipment marketshare is 3 times what would historically be the case, and 2022 HS2 orders could be up 50 per cent vs. 2021 orders). Overall, the outlook remains favorable and we maintain a positive view heading into H2 2021.”

Late Tuesday, the Vancouver-based Caterpillar dealer reported total revenue of $1.705-billion for the second quarter, rising 27.7 per cent year-over-year and topping the Street’s expectation of $1.681.2-billion. Diluted earnings per share jumped 907 per cent to 56 cents (from 6 cents), blowing past the consensus forecast of 45 cents.

“Q2 results reflected good progress in Canada, and the outlook calls for further improvement,” said Mr. Khan. “This is predicated on: 1) a strong outlook for copper and other base metals, which should drive additional opportunities in the Mining end-market; 2) federal/ provincial stimulus programs that are supporting construction activity; 3) growing the number of Customer Value Agreement (“CVAs”), and increasing aftermarket share in the construction end-market; and, 4) capitalizing on demand for rebuilds (29 certified rebuilds in the Canadian Construction end-market in Q2/21 and 38 in Q1/21, which compares to 20 for full-year 2020).”

Maintaining an “outperform” rating, Mr. Khan raised his target to $43 from $41. The average is $41.39.

Others making changes include:

* BMO’s Devin Dodge to $36 from $35 with a “market perform” rating.

“Supported by the meaningful improvement in its cost structure and a demand recovery in its end markets, we believe Finning is positioned to exceed prior peak earnings on “mid-cycle” demand over the next 12 months,” he said. “However, we believe the overhang from elevated political uncertainty in Chile will continue to weigh on the multiple, which limits the near-term upside in the shares.”

* CIBC World Markets’ Jacob Bout to $45 from $44 with an “outperformer” rating.

“FTT reported a strong Q2/21, beating estimates across all metrics. Looking forward, we expect FTT to benefit from the solid build in equipment backlog and a continued recovery of higher-margin product support as COVID-19 restrictions ease. Though we do expect some added costs from a rise in discretionary SG&A (travel, etc.) and labour inflation, the quarter highlighted the benefit to margins from operating leverage and a reduced fixed cost base (and we expect this to continue). The only areas of concern that we are monitoring are potential increases to mining royalties in Chile and equipment availability (FTT doesn’t expect a material impact to large project deliveries),” said Mr. Bout.

* Scotia Capital’s Michael Doumet to $41.50 from $40 with a “sector outperform” rating.


A group of equity analysts on the Street raised their target prices for Great-West Lifeco Inc. (GWO-T) in response to its better-than-anticipated second-quarter results.

Late Tuesday, the Winnipeg-based firm reported base earnings, which excluded one-off items, of 89 cents, exceeding the consensus projection of 79 cents, driven by strong growth in earnings from its U.S. business and higher equity markets.

Desjardins Securities analyst Doug Young called the results “encouraging” and increased his target for its shares to $40 from $39 with a “hold” recommendation (unchanged). The average is $39.90.

Elsewhere, Barclays analyst John Aiken increased his target to $40 from $38 with a “market perform” rating, while CIBC’s Paul Holden raised his target to $42 from $41 with a “neutral” recommendation.

Concurrently, Mr. Aiken raised his target for Great-West’s parent Power Corp. of Canada (POW-T) to $43 from $39 with an “equalweight” rating. The average is $43.25.


While sector valuations “fade,” Canaccord Genuity analysts Matt Bottomley and Derek Dley sees fundamentals for U.S. cannabis companies “strengthening” ahead of the start of second-quarter earnings season next week.

“Although MSO valuations continue to face pressure since their February highs, we note that the group as a whole is largely flat or modestly up year-to-date,” they said. “However, we continue to assert that fundamentals in the U.S. have never been stronger and that structural issues hampering the ability for institutions to hold/clear U.S. cannabis equities have resulted in what we believe to be an attractive entry point for those able to participate in the space.”

The analysts say U.S. Senate Majority Leader Chuck Schumer release of his cannabis reform discussion draft last month did little to spark excitement, however they think the planned legislation “includes considerations that could be tremendously favourable for existing incumbent U.S. operators and represent a sizable de-risking event for the sector as a whole.”

“We believe the comprehensiveness of the draft plan will likely need to see substantial revisions in order to garner enough support to ultimately be implemented into law,” they said. “Due to the moderate-to-high risk of material changes before a draft is submitted to Congress, we believe the can has effectively been kicked down the road until later this year (fall) when investors hope to get better clarity on the realistic specifics of Schumer’s reform.”

Seeing “strong” growth in several key states, including Illinois, Florida and Massachusetts, the analysts said the second quarter “represents another period of all-time highs throughout the U.S.,” leading them to raise their ratings for several MSOs.

“Given what is expected to be continued strong fundamental performance in the U.S. as well as the continued growth and de-risking of the sector as a whole over the past several years, including: i) the legalization of adult-use cannabis in Massachusetts, Nevada, California, Illinois, Arizona, New Jersey and New York; ii) industry sales that we believe will come in well in excess of US$20-billion for 2021; iii) operators that have inflected well into profitability; and iv) a stated objective from the federal government to decriminalize and deschedule cannabis - structural issues in the capital markets aside, we believe many of the speculative elements of the sector have begun to rapidly dissipate,” he said.

They moved the following stocks to “buy” recommendations from “speculative buy” previously:

  • Ascend Wellness Holdings LLC (AAWH.U-CN) with a US$15 target. The average on the Street is US$16.
  • Ayr Wellness Inc. (AYR.A-CN) with a $70 target. Average: $76.
  • Columbia Care Inc. (CCHW-CN) with a $15 target. Average: $14.61.
  • Cresco Labs Inc. (CL-CN) with a $19 target. Average: $23.69.
  • Curaleaf Holdings Inc. (CURA-CN) with a $24 target. Average: $28.28.
  • Green Thumb Industries Inc. (GTII-CN) with a $54 target. Average: $57.71.
  • Jushi Holdings Inc. (JUSH-CN) with US$8 target. Average: $12.43.
  • Trulieve Cannabis Corp. (TRUL-CN) with a $97 target. Average: $86.35.
  • Harvest Health & Recreation Inc. (HARV-CN) with a $8 target. Average: $7.
  • Verano Holdings Corp. (VRNO-CN) with a $35 target. Average: $40.64.


In other analyst actions:

* After completing its acquisition of a 50-per-cent stake in JCU (Canada) Exploration Co. for $20.5-million from UEX Corp., Raymond James analyst Brian MacArthur raised his rating for Denison Mines Corp. (DML-T) to “outperform” from “market perform” with a $1.80 target. The average is $1.92.

“DML holds a controlling interest in the Wheeler River project, including the Phoenix deposit, which is one of the highest-grade deposits in the world. DML also offers a diversified revenue stream from tolling and DES, while exploration and development activities at Wheeler progress. We believe Denison offers investors good exposure to uranium through a number of assets,” said Mr. MacArthur.

* RBC Dominion Securities analyst Irene Nattel raised her Empire Company Ltd. (EMP.A-T) target to $46 from $45, keeping a “sector perform” rating. The average on the Street is $45.30.

“Expecting more of the same for FQ1/22E when EMP reports on September 9, in moderation,” she said. “Different fiscal quarter lengths and timing across publicly traded food & drug retailers matters once again as we lap prior year COVID surge. In addition, exceptionally strong recovery in hospitality spending that started in June and exceeded pre-pandemic levels by July are a bigger headwind to EMP this quarter relative to peers.”

“Although management continues to execute on the value creation plan, near-term tonnage will remain under pressure as we cycle peak pandemic lift in the prior year and as consumer spending trends normalize; SP rating on the stock reflects relative valuation and heightened capex and investment spending.”

* RBC’s Sabahat Khan raised his Spin Master Corp. (TOY-T) target to $59 from $56, exceeding the $50.64 average, with an “outperform” rating.

“Q2 results were well ahead of our and Street forecasts, reflecting better-thanexpected top-line contribution from most segments (Activities/Puzzles was the only segment below forecasts) and an Adjusted EBITDA margin that exceeded RBC/consensus expectations (20.9 per cent vs. RBC/consensus of 17.3 per cent/16.6 per cent),” said Mr. Khan. “The company left 2021 Gross Product Sales (’GPS’) and Adjusted EBITDA margin guidance unchanged while raising revenue guidance (implying an upward revision for Digital/Entertainment revenue guidance).

“We believe the reiteration of GPS guidance (despite the Q2 outperformance) reflects conservatism on management’s part given some ‘macro’ uncertainties (primarily concerns related to freight costs/availability through H2 that have been noted by other toy industry participants). While we see upside to our H2 estimates (which we revise modestly higher on the back of the Q2 print), we view management’s conservative stance as prudent at this point in the year.”

* RBC’s Geoffrey Kwan bumped up his TMX Group Ltd. (X-T) target by $1 to $159 with a “sector perform” recommendation. The average is currently $151.71.

“Overall fundamentals are positive at the TMX with a strong capital raising environment; trading volumes that have generally been similar to last year’s very strong year; and continued solid growth at Trayport. Looking ahead, the AST acquisition is likely to close by the end of Q3/21. We view the shares as fairly valued,” said Mr. Kwan.

* RBC’s Walter Spracklin increased his target for Exchange Income Corp. (EIF-T) to $43 from $42, maintaining an “outperform” rating. The average is $46.40.

“Exchange has done a commendable job managing through the pandemic, generating sufficient FCF to fund its capital allocation priorities and execute on strategic acquisitions,” said Mr. Spracklin. “While it is expected that Q2 will face similar headwinds to those experienced during Q1, we see reasons for optimism (easing of travel restrictions at the territories, recovery in domestic air travel etc.) that the recovery in key segments is poised to gain steam as we head into 2H/21. We continue to see EIF representing an enticing blend of yield and re-opening upside to investors.”

* BMO’s Stephen MacLeod cut his Rogers Sugar Inc. (RSI-T) target to $5.75 from $6 with a “market perform” rating. The average is $5.60.

Q3/21 results were below expectations, due to lower retailer order levels,” he said. “Sugar EBITDA was up year-over-year (higher volumes), but fell short of our estimates due to negative margin mix (lower Consumer volumes). Maple results declined year-over-year and were below forecast (lower volumes). Management expectations are for retail order levels to ‘normalize’ over the next several quarters, but near-term visibility appears low.”

* Canaccord Genuity analyst Carey MacRury increased his Yamana Gold Inc. (YRI-T) target to $9.50 from $9 with a “buy” rating. The average is $8.64.

* Canaccord’s Dalton Baretto raised his SSR Mining Inc. (SSRM-T) target to $25 from $24, reiterating a “buy” recommendation. The average is $28.75.

“We reiterate SSRM as our Top Pick in the mid-cap precious metals space following yet another strong set of results, bolstered further by robust execution on the share buyback program in Q2,” said Mr. Baretto. “We continue to like the company for its operational prowess, organic growth and emerging value across the asset portfolio, strong balance sheet and capital allocation / return program, and attractive valuation. SSRM has traded at a discount to peers since the ASR merger in May 2020; we continue to believe that results like these will eventually result in a re-rating of the company’s multiples.”

* CIBC’s Nik Priebe increased his Trisura Group Ltd. (TSU-T) target to $58 from $50 with an “outperformer” rating, while National Bank Financial’s Jaeme Gloyn raised his target to $58 from $57 with an “outperform” recommendation. The average is $51.28.

* Scotia Capital analyst Paul Steep raised his Nuvei Corp. (NVEI-T) target to $109 from $106, maintaining a “sector outperform” rating. The average is $89.42.

* National Bank Financial analyst Don DeMarco bumped up his Endeavour Mining PLC (EDV-T) target to $55 from $54, topping the $44.83 consensus, with an “outperform” rating.

* National Bank’s Jaeme Gloyn raised his IGM Financial Inc. (IGM-T) target to $58 from $56 with an “outperform” rating. The average is $50.44.

* National Bank’s Travis Wood trimmed his Parex Resources Inc. (PXT-T) to $34 from $36 with an “outperform” rating. The average is now $32.93.

* National Bank’s Rupert Merer increased his Innergex Renewable Energy Inc. (INE-T) target to $27 from $26 with an “outperform” rating. The average is $24.33.

Follow David Leeder on Twitter: @daveleederOpens in a new window

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