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

While he stressed CAE Inc. (CAE-T) did an “excellent job structurally transforming the business for the recovery,” Desjardins Securities analyst Benoit Poirier now thinks its stock properly reflects both those changes and the expected recovery in the Civil segment.

Accordingly, seeing limited upside, he lowered his rating for the Montreal-based simulator and training company to “hold” from “buy” on Thursday.

For the first quarter of its fiscal 2022, CAE reported adjusted earnings per share of 19 cents, a penny below the Street’s expectations and 2 cents lower than Mr. Poirier’s estimate.

“Uncertainty related to the global resurgence of the pandemic prevented the disclosure of formal FY22 guidance,” the analyst said. “Nevertheless, management reiterated that the outlook for FY22 still calls for continued strong year-over-year growth, as recovery in all end markets takes hold, integration of recent acquisitions progresses and cost-saving initiatives ramp up.

“Training utilization remained stable so far in 2Q despite the resurgence of the pandemic. Despite the resurgence of the pandemic with the Delta variant, the utilization rate has remained mostly stable thanks to healthy demand for business jet training, strong commercial demand in the US and recovering activity in Europe. This is encouraging.”

Though he raised his full-year EPS projection by 2 cents to $1.02, Mr. Poirier maintained a $40 target for CAE shares, which sits below the $43.11 average.

“CAE currently trades in line with its main peers in the U.S. (13.3 times EV/FY2 EBITDA vs 13.3 times),” he said.

Elsewhere, CIBC World Markets analyst Kevin Chiang raised his target by $1 to $44, with an “outperformer” rating, while National Bank’s Cameron Doerksen increased his target to $45 from $39 with an “outperform” recommendation.

“CAE’s FQ1 results and outlook reaffirm our view that the company is ‘building back better’ as it comes out of the pandemic given its recent M&A activity and end-market trends,” said Mr. Chiang.


Thursday’s “mirror” share price correction for AutoCanada Inc. (ACQ-T) presents “a window of opportunity,” according to National Bank Financial analyst Maxim Sytchev.

At 1:48 p.m. ET, the Edmonton-based company was down almost 3 per cent following the release of better-than-anticipated second-quarter results before the bell.

That led Mr. Sytchev to raise his rating to “outperform” from “sector perform” with a $64 target, up from $45 and above the $56.42 consensus on the Street.

“We put AutoCanada’s Q2/21 performance within the North American context as the entire industry now benefits from a once-in-generation used car pricing backdrop,” he said. “This is to take nothing away from the industry’s performance, but normalization is bound to come later… the big question is, of course, when … if we have another strong year with FCF generation of north of $150-million and ability to do M&A to the tune of $300-million (although closer to $500-million would be more accurate if assuming 2.75 times normalized leverage), all these items add up.

“While the pace of share price advancement is unlikely to match what we have seen in the last two years, it doesn’t mean that the shares cannot climb another 15-20 per cent from these levels (not dissimilar to what transpired with Stelco and HRC). Digital initiatives are not being given much value by the market either. To account for higher M&A optionality, we have bumped EV/EBITDA to 8.0 times (from 7.0 times); when combined with higher forecasts, the target price jumps to $64.00, for a prospective 25-per-cent return (as lukewarm reaction of ‘sell the news’ offered an opportunity to upgrade the shares); going to Outperform.”


In response to its “strong” second-quarter financial results, BMO Nesbitt Burns analyst John Gibson upgraded Pason Systems Inc. (PSI-T) to “outperform” from “market perform.”

“When we downgraded the company to Market Perform at the onset of the pandemic, it was mostly due to its higher fixed cost base relative to the large drop-off in activity levels. The company has right-sized its cost structure, and has now reached an inflection point in earnings as activity levels rise,” he said.

After the bell on Tuesday, the Calgary-based firm reported adjusted EBITDA of $15.8-million, including a $3.0-million contribution from the Canada Emergency Wage Subsidy, easily exceeding Mr. Gibson’s $8.8-million estimate and the consensus projection of $9.3-million.

“PSI’s strong quarterly results represented a bit of an inflection point as activity levels continue to trend up,” said the analyst. “On its conference call, management noted an expectation for incremental EBITDA margins in the 75-per-cent range as it adds systems back into the field. While we expect some modest cost pressures (both product and labour related), PSI requires very little capex to put equipment back to work.”

Mr. Gibson raised his target for Pason shares to $13 from $12 and above the $12.21 average.

“Despite the large run in its share price Wednesday (up 15 per cent), PSI stock has lagged the group and is up only modestly year-to-date,” he said. “The stock trades at a relatively inexpensive level of 6 times our 2022 EBITDA estimate, and as such is once again justifying our Outperform rating,”


In a separate research note, Mr. Gibson lowered Computer Modelling Group Ltd. (CMG-T) to “market perform” from “outperform” after “light” first-quarter 2022 results.

“Declining software sales, particularly in North America, continue to impact its results,” he said. “The company has done an admirable job at backfilling lost customers in Canada and the U.S. with growth in International regions. While positive, this has not been enough to offset the North American decreases. Additionally, the company’s newer software, CoFlow, has yet to take off as advertised.:

Mr. Gibson lowered his target to $5 from $7. The average is $5.58.

“CMG continues to hold many redeeming qualities, including a strong balance sheet ($54-million in net cash) and decent yield (5 per cent currently), although we feel better upside lies,” he said.

Elsewhere, iA Capital Markets analyst Elias Foscolos cut his target to $6 from $6.50, keeping a “speculative buy” recommendation.

“After looking past non-recurring revenues and government subsidies, we would classify CMG’s results as modestly below expectations,” said Mr. Foscolos. “Weakness in the U.S. was the key factor in shaping our reduced outlook. By next quarter, Maintenance and Annuity revenue should stabilize. We maintain our belief that CMG’s fundamentals remain intact, including its value-adding software that represent a low share of customers’ spending with its high-margin, capital-light business model that is backed with no debt. Based on [Wednesday’s] results and our conversations with management we are trimming our target price.”


While it possesses a “positive” outlook after “solid” second-quarter results, Canaccord Genuity analyst Brendon Abrams lowered his rating BSR Real Estate Investment Trust (HOM.U-T, HOM.UN-T) to “hold” from “buy” in the wake of recent share price appreciation.

On Tuesday after the bell, the REIT, which operates 28 multi-family real estate properties across the Sunbelt region of the United States, reported adjusted funds from operations per unit of 15 US cents, up 7.1 per cent year-over-year and above the analyst’s estimate of 12 US cents. Same property net operating income increased a “healthy” 5.2 per cent year-over-year.

“Fundamentals in the REIT’s core Texas markets of Dallas, Houston, and Austin (combined 87 per cent of net operating income) remain strong,” said Mr. Abrams. “The quarter was highlighted by healthy internal growth, including a year-over-year increase in SPNOI of 5 per cent, as well as continued execution of the REIT’s capital recycling program, which has seen BSR materially improve the quality of its portfolio since its IPO in 2018.

“Overall, our positive outlook for BSR remains largely unchanged following the quarterly results and, as highlighted by strong leasing spreads in June of 10 per cent on new leases within its same property portfolio, we expect continued growth in cash flow per unit, particularly as the REIT’s ample acquisition capacity is deployed.”

Though he raised his target to US$15.50 from US$12.50, exceeding the average of US$14.68, Mr. Abrams lowered his rating in the wake of a 35-per-cent share price jump thus far in 2021.

“Trading in line with our NAV estimate, we believe the units are now fairly valued,” he said.

Elsewhere, CIBC’s Dean Wilkinson raised his target to US$17.50 from US$13.50 with an “outperformer” recommendation and Desjardins Securities’ Kyle Stanley also hiked his target to US$17.50 from US$14 with a “buy” rating.

“BSR has begun benefiting from the extensive two-year portfolio transformation which refocused it on higher-growth core markets in Texas,” said Mr. Stanley.


A group of equity analysts on the Street made rating adjustments for Boyd Group Services Inc. (BYD-T) following the release of its second-quarter results.

Stifel’s Maggie MacDougall said she sees the Winnipeg-based company, which provides auto body and auto glass repair services, as a “great business” following a “good” quarterly report

However, believing its shares are fairly valued, she cut her rating to “hold” from “buy” and reaffirmed a $240 target, which falls below the $256.77 average.

“We believe that due to near-term labour constraints, we could see near-term same-store sales growth and margin headwinds limit upside in H2, although topline pressures may be partially offset by an accelerated M&A push,” she said.

“Boyd is a high-quality business with a stock that is pricing in robust deal flow this year and next as well as a return to pre-pandemic profitability over the coming year. We are moving to a Hold from a Buy on valuation given limited return to our target.”

Elsewhere, Laurentian Bank Securities’ Nauman Satti cut the stock to “hold” from “buy” with a $250 target.

“Our estimates were on the conservative side of consensus and have remained largely unchanged despite a muted outlook,” he said. “We had previously baked in some cushion on the margin front. While we continue to like the long-term growth opportunity for Boyd, we recognize the near-term challenges stemming from supply-chain delays, wage pressures, and a tight labor market, and for those reasons, we take a wait-and-see approach for Boyd.”

National Bank’s Zachary Evershed lowered his rating to “sector perform” from “outperform” with a target of $225, down from $260

Conversely, ATB Capital Markets’ Chris Murray upgraded the stock to “outperform” from “sector perform” and raised his target to $265 from $225.

“Results came in better-than-expected though management confirmed that volumes remain below pre-pandemic levels in certain markets and the labour supply environment remains a near-term challenge,” said Mr. Murray. “We view the issues as transitory with the Company well positioned to benefit from a reversal in organic growth trends, a potential acceleration in M&A activity, and a stabilizing (C$/US$) exchange rate. We have become increasingly positive on BYD and with valuations representing a moderate discount to our estimate of fair value, we are upgrading to Outperform as we see an acceleration of acquisition activity with the Company utilizing $600-million in dry powder to meet 2025 growth targets”


Seeing see limited upside at this stage of the pandemic, TD Securities analyst Meaghen Annett downgraded Canada Goose Holdings Inc. (GOOS-T) to “hold” from “buy” in the wake of Wednesday’s release of better-than-anticipated quarterly results.

“To be clear, yesterday’s release did not change our view of the mid-term outlook for GOOS,” she said. “We believe that the pandemic has afforded management the opportunity to reset the Wholesale revenue base, and direct inventory to the higher-margin DTC channel. As a recovery in global luxury/travel takes hold, this should become increasingly apparent. We will continue to assess the state of the pandemic; however, at this stage, an accelerated recovery may prove elusive near-term. In advance of this recovery, the strength of GOOS’ balance sheet leaves it positioned to expand distribution, support the brand, and manage pandemic headwinds.”

Her target for the luxury retailer’s shares slid to US$54 from US$56, exceeding the $53.09 average,

Elsewhere, CIBC World Markets analyst Mark Petrie raised his target to $60 from $59 with an “outperformer” rating.

“Canada Goose delivered healthy off-peak results, though a modest Q2 outlook more than offset. Shares were punished, but none of this changes our fundamental view of GOOS, which remains an attractive global growth story fuelled by building brand awareness, product diversification, and favourable channel shift. Seasonality has always been a risk factor for GOOS though this takes on even greater emphasis with the uncertainty of the pandemic. Nonetheless, we believe GOOS is well-positioned to move toward historical margin levels in F202,” said Mr. Petrie.


Following the release of largely in-line third-quarter financial results, Desjardins Securities analyst Chris Li still views Metro Inc. (MRU-T) as a “high-quality company with limited catalysts.”

On Wednesday, the Montreal-based grocer reported earnings per share of $1.03 for the 16-week period ended July 3, down a penny year-over-year as sales slid to $5.72-billion from $5.84-billion.

“When excluding $8-million related to DC [distribution centre] transition costs and slightly higher-than-expected COVID-19-related expenses, adjusted EPS of $1.09 was largely in line with our estimate of $1.11 (consensus of $1.12),” said Mr. Li. “The slight miss came from gross margin, with a decline in food margin (smaller basket size and increase in promotional intensity) partly offset by stronger pharmacy margin. Underlying SG&A expenses were well-controlled.”

”Ongoing cost pressures have resulted in price increases by vendors. MRU expects to pass on some of the cost increases while remaining competitive. Management does not expect the level of food inflation in 4Q to differ materially vs 3Q. As consumer behaviour gradually returns to normal, MRU is seeing promotional levels almost back to pre-pandemic levels and discount format growth outpacing conventional.”

After trimming his 2021 revenue and earnings expectations while increasing his 2022 projections, Mr. Li emphasized Metro’s “strong regional position, consistent execution and shareholder-friendly capital allocation strategy.” However, he said its premium valuation and lack of near-term catalysts “keep us from being more positive.”

Keeping a “hold” rating for its shares, he raised his target to $66 from $59. The average on the Street is $64.92.

Elsewhere, CIBC World Markets analyst Mark Petrie raised his target to $64 from $61 with a “neutral” rating, while Scotia’s Patricia Baker increased her target to $70 from $68 with a “sector outperform” recommendation.

“Metro stock gave back some recent gains after earnings, but has still been a strong performer dating back to the onset of the pandemic,” said Mr. Petrie. “Management believes it can deliver the targeted 8-10-per-cent EPS growth even off of pandemic-boosted results, though our expectations are slightly more modest. We believe Metro has earned a valuation premium, and while cash flow will be constrained by distribution investments for the forecast period, there is still ample room for share buybacks and dividend increases. Nonetheless, the premium is adequately reflected, and we see more upside in other Staples stocks.”


CIBC World Markets analyst Kevin Chiang thinks AirBoss of America Corp.’s (BOS-T) “structurally higher earnings provide valuation upside.”

After the release of better-than-anticipated second-quarter financial results, he reiterated his positive stance on the Newmarket, Ont.-based manufacturer of rubber based products, seeing it continuing to benefit from “a robust pipeline of organic and inorganic growth opportunities, past investments in innovation and capacity, and margin improvement initiatives.”

On Tuesday after the bell, AirBoss reported adjusted earnings before interest, taxes, depreciation and amortization, excluding the impact of the Canada Emergency Wage Subsidy and government loan forgiveness, of $17.6-million, topping the consensus forecast on the Street of $14.2-million. The beat was driven by a rebound in demand in its Rubber Solutions segment and continued strength in Defense Group segment.

Mr. Chiang thinks the company’s claim of “an impressive” $1-billion of contract opportunities over the next 24 months actually “understates the true value of potential opportunities.”

“This pool includes either contracts the company is actively bidding on or solicitations that BOS knows is coming up, but excludes contracts/opportunities where timing is uncertain,” he said. “For example, this $1-billion pool excludes the potential of supplying gas masks to the U.S. military. The company was successful in the past in supplying low-burden masks for Canada and Australia and we believe has a competitive product offering for when the U.S. puts out its gas mask bid. It also excludes the potential roll-out of the B3 blast gauge, which is currently in field testing with the U.S. Army, and we know the U.S. FY2020 National Defense Authorization Act (NDAA) states the DOD must document service members’ blast exposure histories for their medical records. Add to this, growth opportunities related to the replenishment of PPE stockpiles (nitrile gloves, gowns, masks), diversifying AEP’s revenue by pursuing non-auto revenue customers, and the potential replacement of ADG’s Husky vehicles given the newer 2G version.”

He sees its earnings stream now “structurally higher than pre-pandemic levels” and sees annual EBITDA of $100-million, which it generated in 2020 and expects to reach in 2021, as its new run rate, rising from $40-million prior to 2020.

“As the market better appreciates this higher level of earnings, we see BOS closing the significant valuation gap versus its close competitors (AVON and Hexpol trade at an average 13 times EV to forward EBITDA),” he said. “If we were to apply this comp multiple to our baseline 2022E EBITDA, this would imply an equity value for BOS of $70 per share. We are currently using 10 times to derive our price target, but recognize there is upside to this as BOS delivers against its backlog. We would note this is above the upper end of where BOS has traded historically.”

Maintaining an “outperformer” rating for its shares, Mr. Chiang raised his target to $55 from $49. The average on the Street is $51.38.

Other analysts making target adjustments include:

* TD’s Tim James to $46 from $44 with a “hold” rating.

“We believe that AirBoss’ strong balance sheet, dividend, and growing exposure to global demand for personal protective equipment make it an appealing investment,” said Mr. James. “We believe that its Defense segment is increasingly well-positioned to drive strong earnings, while its legacy Rubber Solutions and Engineered Products segments regain momentum. At this time, we believe that the above-mentioned factors and risk associated with expected future contract wins are appropriately reflected in the stock valuation.”

* Stifel’s Maggie MacDougall to $53.25 from $50 with a “buy” rating.

“With the stock trading at 7.8 times 2022 estimated EBITDA vs. compounding comps at 11.9 times and defense comps at 11.1 times, we see considerable upside in the shares from current levels,” said Ms. MacDougall.

* Canaccord Genuity’s Yuri Lynk to $51 from $46 also with a “buy” rating.


After it received federal environmental approval for its Rose spodumene project in Northern Quebec, Stifel analyst Anoop Prihar upgraded Montreal-based Critical Elements Lithium Corp. (CRE-X) to “buy” from “hold,” seeing it as a “de-risk event.”

“We believe management’s primary focus is finding a strategic partner for the project,” he said. “A financial advisor has been retained to help with this initiative. In light of the current momentum in the lithium sector as well as recent investment activity specific to Quebec (Livent Corporation partnering with the New Nemaska and Piedmont Lithium investing in Sayona Mining), we believe the potential may exist for CRE management to secure the capital needed to advance the Project.”

His target rose to $1.70 from $1.50. The average is $2.07.


In other analyst actions:

* National Bank Financial analyst Michael Parkin downgraded New Gold Inc. (NGD-T) to “sector perform” from “outperform” and cut his target to $2.75 from $3.50, exceeding the $2.67 average on the Street. Meanwhile, BMO’s Brian Quast cut his target to $3.50 from $4 with an “outperform” rating.

* TD Securities analyst Lorne Kalmar downgraded WPT Industrial Real Estate Investment Trust (WIR.U-T, WIR.UN-T) to “hold” from “buy” with a US$22 target, up from US$20 and above the US$21.33 average.

* TD’s Derek Lessard cut Pizza Pizza Royalty Corp. (PZA-T) to “hold” from “buy” with a $12.50 target.

* CIBC World Markets analyst Jacob Bout moved his WSP Global Inc. (WSP-T) target to $166 from $157 with an “outperformer” recommendation. Others raising their targets include: BMO’s Devin Dodge to $152 from $145 with a “market perform” rating; ATB Capital Markets’ Chris Murray to $150 from $135 with a “sector perform” rating and RBC’s Sabahat Khan to $172 from $155 with an “outperform” rating. The average is $159.14.

“WSP reported another strong quarter, characterized by better-than-expected organic growth and margin expansion,” said Mr. Bout. “While WSP’s 2021 guidance raise is primarily a function of better profitability/margins, we continue to expect WSP posting strong organic growth in H2/21 as key end-markets continue to recover, followed by another pickup in 2022 boosted by the U.S. (contract awards not included in backlog and awaiting funding decisions in the country is up 75 per cent vs. a year ago). Despite the relatively large Golder acquisition, the balance sheet at 1.1 times net debt/EBITDA supports further accretive M&A.”

* Canaccord’s Matt Bottomley raised his Green Thumb Industries Inc. (GTII-CN) target to $56 from $54, keeping a “buy” rating. The average is $58.34.

“As one of the top players in the sector, we believe a premium valuation continues to be warranted at this time,” said Mr. Bottomley.

* Canaccord’s Dalton Baretto cut his Fortuna Silver Mines Inc. (FVI-T) target to $5.50 from $6 with a “hold” rating. The average is $7.92.

* Canaccord’s Aravinda Galappatthige lowered his target for BBTV Holdings Inc. (BBTV-T) to $16 from $18 with a “buy” rating. The average is $18.36.

* Desjardins Securities analyst Benoit Poirier raised his target for Calian Group Ltd. (CGY-T) to $78 from $77 with a “buy” rating. The average is $78.50.

“3Q results marked another impressive quarter of organic growth at 16 per cent year-over-year. The strong performance supported management’s guidance revision for FY21. We continue to believe that CGY represents a compelling investment opportunity as investors are rewarded for waiting for the M&A strategy to pick up with impressive organic growth and a 1.7-per-cent dividend yield. We see significant potential for value creation as management starts deploying capital,” he said.

* BMO Nesbitt Burns analyst Peter Sklar raised his target for Linamar Corp. (LNR-T) to $102 from $98 with an “outperform” rating. The average on the Street is $94.80.

“We believe investors are underestimating the earnings power and free cash flow generation capability of Linamar, which will become apparent as we progress through 2022,” said Mr. Sklar.

“In 2021, Linamar’s stock has traded between $70 and $80 per share. We believe this is due to the ongoing global semiconductor shortage and inflationary pressures relating to commodities, shipping, and labour. Over the next several quarters, we believe these factors will continue to suppress earnings. However, we see the potential for strong earnings growth in H2/22 as semiconductor capacity comes online, which should ease the shortage. Additionally, demand for light vehicles remains strong due to low consumer financing rates and recovery in global economies.”

* CIBC’s Hamir Patel increased his Intertape Polymer Group Inc. (ITP-T) target to $40 from $39 with an “outperformer” rating, while National Bank’s Zachary Evershed bumped up his target to $40 from $38.50 with an “outperform” recommendation and BMO’s Stephen MacLeod moved his target to $39 from $37 with an “outperform” rating. The average on the Street is $39.56.

“Our 2021E EBITDA forecast ($257-million) is slightly above the high end of management’s raised guidance range as we believe demand trends in e-commerce and building/construction end-markets (collectively 37 per cent of 2020 mix) should remain resilient over H2. We also believe strong market conditions will allow ITP to continue successfully passing on any additional pressure on the input cost front,” said Mr. Patel.

* Mr. Patel bumped up his Hardwoods Distribution Inc. (HDI-T) target to $51 from $48, below the $57.90 average, with an “outperformer” rating.

* CIBC’s Mark Jarvi raised his Emera Inc. (EMA-T) target to $60 from $59, keeping a “neutral” rating. The average is $60.47.

* CIBC’s Dean Wilkinson raised his Dream Unlimited Corp. (DRM-T) target to $33 from $29 with an “outperformer” rating. The average is $33.33.

* Mr. Wilkinson increased his Summit Industrial Income REIT (SMU.UN-T) target to $21.50 from $18, keeping a “neutral” rating. Others making changes include: Desjardins Securities’ Michael Markidis to $22.50 from $19 with a “buy” rating; BMO’s Joanne Chen to $22 from $18.50 with an “outperform” rating; Canaccord’s Mark Rothschild to $21.75 from $18.25 with a “hold” rating and Raymond James’ Brad Sturges to $23 from $20 with an “outperform” rating. The average is $20.13.

“Our fundamental outlook for Summit remains bullish and we expect the REIT to continue benefitting from rising rental rates for industrial space in its core markets. However, with the units currently trading at an 11.0-per-cent premium to NAV and at an implied cap rate of 3.7 per cent, we believe this value is largely reflected in the unit price,” said Mr. Rothschild.

* Canaccord’s Doug Taylor cut his Mogo Finance Technology Inc. (MOGO-T) target by $1 to $11 with a “speculative buy” rating, while Raymond James’ Steven Li lowered his target to $13.50, the current average on the Street, from $15 with an “outperform” rating.

“Mogo reported Q2 results which were ahead of expectations,” Mr. Taylor said. “The 16-per-cent move in the stock post-earnings was driven, in our view, by management’s updated outlook for the pace of growth exiting Q4 and into 2022. These numbers suggested upside to the Street’s prior model and were a vote of confidence in the expected launch timing and contributions from upcoming products such as the equity trading platform. What is not at this point reflected in the financial performance is the $110-million invested (so far) in Coinsquare which, given the activity levels in cryptocurrencies, has quickly become a key asset of Mogo. Our $11 target (from $12) is based on expectations that are now better grounded by management’s guidance, offset by a more conservative valuation for Coinsquare. Mogo’s gearing to volatile cryptocurrencies creates a high risk/high reward return distribution which informs our SPECULATIVE BUY rating.”

* RBC Dominion Securities analyst Matt Logan increased his Tricon Residential Inc. (TCN-T) target to $17.50 from $15.50, exceeding the $16.28 average, with an “outperform” rating.

“If there’s a ceiling for rent growth ... TCN hasn’t hit it yet. On balance, exceptional fundamentals, paired with newly formed joint-ventures and a recently fortified balance sheet, underpin our continued confidence in TCN’s ability to deliver top-tier compounding power over a multiyear horizon,” said Mr. Logan.

* RBC’s Pammi Bir bumped up his target for Crombie Real Estate Investment Trust (CRR.UN-T) target to $19 from $17.50 with a “sector perform” rating. The average is $18.64.

“On the back of sound Q2 results, our outlook for CRR continues to improve,” said Mr. Bir. “From a fundamental standpoint, we expect traction in NOI will continue to form in 2H/21 as the weight of the pandemic recedes. As well, the development program is progressing well, as mixed-use project deliveries ramp up and set the stage for incremental NAV upside ahead. On balance, we believe CRR’s premium valuation is well supported.”

* RBC’s Alexander Jackson raised his Stelco Holdings Inc. (STLC-T) target to $59 from $54 with an “outperform” rating, while BMO’s David Gagliano hiked his target to $60 from $50 with an “outperform” rating/ The average is $53.22.

“Stelco offers investors leverage to high steel prices through its highly fixed, low cost operations and it trades at a discount to peers. With operations humming along and the company executing on its strategy we expect strong free cash flow and earnings at current spot and forecast steel prices, which we expect to translate to capital returns. We have revised our model marking-to-market for steel prices in H2/21 and tweaked realized prices up in 2022 which increased our estimates,” said Mr. Jackson

* RBC’s Michael Harvey increased his Birchcliff Energy Ltd. (BIR-T) target to $6 from $5 with an “outperform” rating. Others making changes include: Canaccord Genuity’s Anthony Petrucc to $6.50 from $6 with a “buy” rating; BMO’s Randy Ollenberger to $5.50 from $5 with an “outperform” rating and Raymond James’ Jeremy McCrea target to $6.75 from $6.50 with an “outperform” rating. The average is $6.70.

“BIR continues to reap the rewards of its bold unhedged strategy supported by not only by the rally in gas prices but, also its strong execution across its portfolio. We point to BIR shares as a great way to gain leverage to a constructive AECO environment while being protected on the downside by the company’s low-cost structure derived from its premium Montney assets supported by owned & operated infrastructure.,” said Mr. McCrea.

* RBC’s Douglas Miehm raised his Dentalcorp Holdings Ltd. (DNTL-T) target by $1 to $19 with an “outperform” rating, while CIBC’s Scott Fletcher moved his target to $20 from $18 with an “outperformer” rating and BMO’s Stephen MacLeod increased his target to $19 from $18 with an “outperform” rating. The average is $19.25.

“The key takeaway from the quarter is the company completing 20 acquisitions in Q2, which are expected to generate $12-million in annualized EBITDA, ahead of our $7.6-million expectation. We see the higher-than-expected acquisition spend as a positive sign for the pace of M&A accelerating above our forecast in future periods. Modestly positive same-practice sales growth was also encouraging in light of COVID restrictions in place during the quarter,” said Mr. Fletcher.

* RBC’s Drew McReynolds increased his Points International Ltd. (PCOM-Q, PTS-T) target to US$21 from US$20, keeping an “outperform” rating. The average is $20.38.

* TD Securities analyst Cherilyn Radbourne raised his ATS Automation Tooling Systems Inc. (ATA-T) target to $48 from $41 with a “buy” rating, while Stifel’s Justin Keywood bumped his target to $51.50 from $45 with a “buy” recommendation. The average is $46.40.

“ATS is hitting on all cylinders in our view with a strong outlook, including organic tailwinds and M&A as a pipeline for additional acquisition opportunities remain very active with a strong balance sheet and $500-$600-million in capacity to execute. The backdrop for automation is constructive in general with rising costs in an inflationary environment, a tight labor market and supply chain disruptions, leading to companies driving efficiencies in the manufacturing process. ATS operates in higher valued verticals within automation, including Life Sciences, Food & Beverage, EV and Nuclear, leading to more robust demand in already a good growth industry. Despite, ATS’ recent share outperfomance, up 85 per cent year-to-date vs. the S&P/TSX composite, up 18 per cent, we still see strong upside as the shares are relatively undervalued,” said Mr. Keywood.

* TD’s Lorne Kalmar raised his American Hotel Income Properties REIT (HOT.U-T) target to US$5 from US$4.75 with a “buy” rating. The average is US$4.30.

* TD’s Graham Ryding increased his Lifeworks Inc. (LWRK-T) target to $40, matching the consensus, from $39 with a “buy” rating, while BMO’s Étienne Ricard cut his target to $39 from $40 with an “outperform” recommendation.

“LWRK’s stock decline offers a buying opportunity, in our view. Fundamentals are intact with accelerating organic growth, a deleveraging balance sheet and improving free cash flow conversion. In addition, the Q2 margin profile is most likely to be a 2021 low point,” said Mr. Ricard.

* BMO’s Thanos Moschopoulos raised his Thinkific Labs Inc. (THNC-T) target to $18 from $17, remaining below the $20.01 average, with an “outperform” rating.

“We remain Outperform on THNC and have made minor changes to our model following Q2/21 results, which were in line on revenue and revenue guidance,” he said. “Management expressed a hint of caution regarding the potential near-term uncertainty associated with the re-opening (which contributed to a quarter-over-quarter deceleration in customer adds and GMV, offset by better-than-expected ARPU). We continue to view the stock’s valuation as attractive relative to our forecasts for growth, particularly with Payments now poised to ramp.”

* Scotia Capital analyst Michael Doumet raised his Dexterra Group Inc. (DXT-T) to $9.50 from $9 with a “sector outperform” rating. The average is $8.44.

* National Bank’s Tal Woolley raised his CT REIT (CRT.UN-T) target to $19 from $18 with an “outperform” rating, while Scotia’s Himanshu Gupta bumped up his target to $18 from $17.50 with a “sector outperform” recommendation. The average is $17.89.

* National Bank’s Zachary Evershed increased his Savaria Corp. (SIS-T) target to $24.50 from $24, topping the $23.75 average, with a “buy” rating.

* National Bank’s Patrick Kenny cut his target for Emera Inc. (EMA-T) to $58 from $59, below the $60.47 average, with a “sector perform” rating, while CIBC World Markets’ Mark Jarvi raised his target to $60 from $59 with a “neutral” recommendation and BMO’s Ben Pham moved his target to $62 from $59.50 with an “outperform” rating.

“In-line Q2 results, a unanimous settlement for Tampa Electric and steady progress on its capex and funding plans have EMA trending positively,” said Mr. Jarvi. “We’ve made minimal changes to our forecast; we continue to wait and see if potential investments will allow EMA to modestly increase its growth outlook. We view shares as reasonably valued, with only a modest total return opportunity (albeit shares offer a slightly higher dividend yield vs. peers). "

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

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