Thursday’s analyst upgrades and downgrades

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

Brookfield Infrastructure Partners L.P.’s (BIP.UN-T, BIP-N) growth initiatives “continue to support a strong outlook,” according to iA Capital Markets analyst Naji Baydoun, who called sees its financial position as “robust.”

Before the bell on Wednesday, Brookfield reported adjusted earnings before interest, taxes, depreciation of US$596-million, exceeding both Mr. Baydoun’s US$564-million projection and the consensus estimate of US$572-million. Funds from operations per share of 89 US cents also topped projections (83 US cents and 86 US cents, respectively).

Mr. Baydoun attributed the beat to “strong” contributions from its Midstream segment, including contributions from its privatization of Inter Pipeline Ltd., and gains from its recently completed organic growth initiatives.

“BIP continues to deliver strong organic growth (9 per cent in Q3/21), driven by a combination of higher volumes, inflation-indexation, and new capital investments,” he said. “Furthermore, the Company (1) has completed the large-scale strategic acquisition of IPL (12-per-cent FFO per share accretion, additional strategic updates expected in due time), and (2) continues to source attractive risk-adjusted investments with the announcement of an US$500-million equity investment into a regulated utility in Australia.”

“BIP targets long-term 6-9-per-cent average annual organic FFO/share growth; over the near term, management (1) continues to expect (1) the current favourable macro-economic backdrop to support organic growth at the top end of its target range, and (2) sees run-rate FFO/share more than 20 per cent above prior year levels(underpinned by both organic growth and recently completed/announced M&A activity). Overall, we continue to forecast sustainable high single-digit FFO/share growth (with upside from accretive M&A), which supports dividend increases in line with the Company’s ~5-9-per-cent average annual growth target within an 70-per-cent FFO payout over time.”

Reiterating a “strong buy” recommendation for Brookfield Infrastructure shares, Mr. Baydoun raised his target to US$71 from US$71. The average is US$64.91.

“We view BIP as a unique and diversified way for investors to play the broad long-term infrastructure investment theme, with (1) access to a global, large-scale infrastructure investment platform (ownership interests in more than US$60-billion of assets), (2) defensive cash flows (90-95 per cent of FFO regulated/contracted), (3) visible and sustainable organic cash flow growth (6-9 per cent per year, CAGR 2020-25E), (4) potential upside from accretive M&A, and (5) attractive income characteristics (3.50-per-cent yield, 60-70-per-cent long-term FFO payout, and a 5-9 per cent per year dividend growth target),” he said. “We continue to see BIP as a standout growth vehicle for long-term shareholders, and are increasing our price target to reflect the AusNet (AST-AX, Not Rated) investment.”

Elsewhere, RBC Dominion Securities analyst Robert Kwan raised his target to US$65 from US$61 with an “outperform” rating.

“BIP’s longstanding strategies continue to offer unitholders ways to benefit in almost any macro environment,” said Mr. Kwan. “In particular, inflation and supply chain disruptions are major topics of conversations and BIP has a number of avenues to capitalize on these themes. Further, we highlight the upside from BIP’s asset rotation program, particularly if it looks to monetize “platform” assets that can garner premium valuations (e.g., the sale of the North American district energy business for close to 30 times EBITDA).”

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Calling it “crunch time in the Gobi Desert,” RBC Dominion Securities analyst Sam Crittenden thinks Turquoise Hill Resources Ltd. (TRQ-T) has reached a “critical juncture” in the development of its Oyu Tolgoi gold-copper mine, needing a deal with the Government of Mongolia in the next few months to “continue on the current path, or risk more significant delays and overruns.”

Mr. Crittenden sees a potential agreement in its tax dispute as a positive catalyst for its shares, however he warned “there could be another step change higher in the funding gap that is currently at $3.6-billion” if negotiations extend into next year.

“TRQ Interim CEO Steve Thibeault just returned from 6 weeks in Mongolia as negotiations with the Government continue to reach a deal to resolve the government’s concerns namely the capital overrun, long-dated nature of dividend payments to the Government, and an in-country power solution,” he said. “TRQ and RIO have made a formal proposal to the government, which TRQ believes addresses the government’s key issues and includes concessions to reduce the debt outstanding and accelerate or increase dividend payments.

“We believe there is motivation from all sides to reach a deal and avoid the type of ‘tools down’ situation that occurred in 2015; however, it remains to be seen if an agreement can be reached with the government’s negotiating committee. It is also unclear if the deal would need to be ratified by Mongolia’s 76- person parliament which likely holds a wider spectrum of views towards Oyu Tolgoi.”

Maintaining his “cautious view” and a “sector perform” rating for Turquoise Hill, Mr. Crittenden cut his target for its shares to $15 from $25 to reflect recent delays. The average is $18.48.

“We continue to see potential for long term value creation if agreements can be reached with GOM and as the underground ramps up becoming one of the largest, lowest-cost copper mines in the world; however, risk remains around further delays,” he said.

Elsewhere, BMO Nesbitt Burns analyst Jackie Przybylowski downgraded the stock to “underperform” from “market perform” with a $12 target, falling from $14.

“The Oyu Tolgoi construction project is rapidly approaching a serious deadline which could cause work to slow significantly later this month,” she said. “We have yet to see compelling evidence that an agreement is imminent, and so we have pushed back our expected project start date and the project budget to reflect our assessment of the potential impact of delays.

“Our confidence level in the timing and budget are low and are based on ambiguous guidance from Turquoise Hill.”

Others making target changes include:

* Canaccord Genuity’s Dalton Baretto to $12.50 from $14 with a “sell” rating.

“Our primary takeaway from the release is an increasing probability that construction on the HNLO project may have to be suspended on November 30,” said Mr. Baretto. “It goes without saying that the costs and risks associated with this action would be enormous. On the flip side of the coin, an agreement with the Government of Mongolia (GOM) that would allow construction to continue would likely be significantly punitive economically to TRQ. As such, we find it hard to see any near-term upside in the shares, and the longer-term NAVPS of the project to TRQ shareholders remains unclear at this time. We will look for an attractive entry point once the questions around economic sharing and funding are answered..”

* TD’s Menno Hulshof to $18 from $20 with a “buy” rating.

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Following a “strong” third quarter in which its U.S. segment “shot the locks off,” Raymond James analyst Andrew Bradford raised his rating for Calfrac Well Services Ltd. (CFW-T) to “outperform” from “market perform.”

“Reported EBITDA came in well-ahead of consensus expectations, beating the high end of the range,” he said. “Headline EBITDA was $36-million against the $28-million consensus and almost triple 1Q21 EBITDA. Vis-a-vis our own expectations, U.S. operations and Latin America were the obvious sources of 3Q’s ‘beat’.

“Unquestionably, CFW equity has explosive upside potential driven by both its underutilized U.S, fleet and what we see as the increasing likelihood for pricing improvements in Canada. And its financial leverage has the potential to amplify this upside in equity performance.”

Despite the impressive 59-per-cent revenue jump in the U.S., Mr. Bradford warned that a pause may come in the fourth-quarter due to the “combined impacts of Thanksgiving, Christmas and overall budget exhaustion.” He added: “We also won’t be surprised to see U.S. drilling activity outpace fracking activity as E&Ps apply effort to stave off unsustainable DUC inventory drawdowns.”

He raised his target for Calfrac shares to $6.90 from $4.50. The current average is $6.19.

“Investors should remain mindful this cuts both ways,” he said. “CFW has relatively low conversion of EBITDA to Free Cash (26 per cent), which limits its capacity for debt reduction to about $40-million in 2022. Any amount of debt reduction is positive for shareholders, but with an 8-per-cent FCF yield (necessarily fully diluted as the 1.5 lien convertibles are so deep-in-the-money), a relatively smaller portion of value will be generated through the mechanism of debt reduction. Most equity value growth will necessarily come via the capitalization of EBITDA – so either EBITDA grows or the multiple expands. This doesn’t detract from upside potential, it just means CFW equity has a higher-than-average risk profile among oilfield services stocks, which should probably instruct a lower-than-average multiple.”

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After its third-quarter results and outlook “disappointed,” Desjardins Securities analyst Kevin Krishnaratne thinks it’s time to reset expectations for AcuityAds Holdings Inc. (AT-T) to account for the impact of global supply chain disruptions and a longer-than-anticipated sales cycle for its Enterprise deals.

Shares of the Toronto-based company plummeted 26.5 per cent on Wednesday with weaker-than-anticipated release.

AcuityAds reported revenue for the quarter of $27.5-million, up 11 per cent year-over-year on a constant currency basis but below Mr. Krishnaratne’s $30.6-million projection.

“Supply chain constraints led clients to pause campaigns given an inability to sell products, which caused the softness,” he said. “One top client paused almost $1-million of previously planned ad spend. Collectively, AT noted that supply chain pauses were ‘a few million dollars’ — we suggest revenue growth was 18 per cent excluding these transitory issues. .... Adjusted EBITDA of C$4.4-million was below our $4.9m-million, but margin on net revenue was strong and industry-leading at 31 per cent (we were at 30.4 per cent). CFO of $9.5-million beat our $5.1-million on strong cash collections. AT ended 3Q with $100-million-plus of cash and minimal debt.”

Mr. Krishnaratne said the headwinds from supply chain issues appeared earlier than he anticipated, and he now expects them to linger into the fourth quarter and beyond.

“We now expect 4Q revenue of $36.6-million (was $43.9-million) for growth of 4.3 per cent year-over-year (up 8 per cent in constant currency) owing to supply chain– related ad spend pauses,” he said. “Upside to estimates exists on supply chain issues easing, a return to spend in the hard-hit travel and leisure sectors (signs of rebound have already emerged), and continued illumin traction. With regard to 2022, we see revenue of $145-million (was $168.9-million) for growth of 19 per cent year-over-year. The Enterprise sales cycle for illumin is taking longer than expected, requiring different sales resources and involving more integration work—we reflect related deals starting mid-2022 (was 4Q21). AT is ramping opex to fuel future growth—we have reduced our 4Q EBITDA estimate to $6.9-million (was $8.8-million), while in 2022, EBITDA moves to $21.6-million (was $27.2-million), reflecting a margin on net revenue of 29.3 per cent (was 33.6 per cent in 2021).”

With those reductions, the analyst cut his target for AcuityAds shares to $10 from $15.50, keeping a “buy” recommendation. The current average on the Street is $16.22.

“While a tough quarter, AT looks attractive post the 25 per-cent-plus sell-off at 2.8 times our reduced 2023 sales estimate (and 8.5 times 2023 EBITDA), with a strong cash balance ($100-million),” Mr. Krishnaratne said.

Elsewhere, TD Securities analyst Vince Valentini downgraded its shares to “hold” from “buy” with an $8 target, down from $18.50.

Others making target adjustments include:

* Canaccord Genuity’s Aravinda Galappatthige to $13 from $21 with a “buy” rating.

“Due to the steep sell off in the programmatic space over the past three months (partly on account of lighter H2 trends, partly due to privacy initiatives), we have revised down our target multiple to 7.5 times from 12.5 times,” he said. “Together with the downward revisions to our estimates, this lowers our target by $8 per share. We believe that while the stock is quite inexpensive now at 12.2 times EV/EBITDA 2022, it would be dictated in the near term by the programmatic comp group; that is until we see more catalytic traction from illumin, specifically on the enterprise front.”

* Echelon Capital’s Rob Goff to $14 from $23 with a “speculative buy” rating.

“The market response appears to reflect deeper concerns with respect to both headwinds and the migration of AcuityAds’ legacy managed and self-service businesses onto the illumin platform,” said Mr. Goff. “Concerns around the impact of Apple’s iOS privacy moves remain an overhang despite the Company communicating that the changes primarily impact in-app advertising, where AcuityAds derives very modest revenues (less than 5 per cent). Furthermore, the illumin platform dynamically directs budgets to the highest return-on-investment (ROI) channel and can thus direct budgets towards Connected TV (CTV) or other alternatives where in-app advertising ROIs are negatively impacted by iOS privacy moves limiting viewer profile data.”

* Needham’s Laura Martin to US$8 from US$14 with a “buy” rating.

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A group of equity analysts on the Street raised their targets for shares of IA Financial Corp. (IAG-T) following Wednesday’s release of stronger-than-expected third-quarter results.

Shares of the Quebec City-based firm rose almost 3 per cent after it reported core earnings per share of $2.23, exceeding management’s guidance ($2.00–2.15) and above the consensus projection on the Street of $2.12.

“We believe IAG will likely hit the high end of its 2021 core EPS guidance, has reserve buffers in case things get bumpy and the valuation is compelling,” said Desjardins Securities’ Doug Young.

He raised his target to $85 from $80, keeping a “buy” recommendation. The average target is $86.61.

Others making adjustments include:

* CIBC World Markets’ Paul Holden to $84 from $82 with an “outperformer” rating.

“Management stated that it intends to take its dividend payout ratio back to the middle of its 25-35-per-cent range as soon as possible. We expect that will happen before the release of Q4 results in February and our 2022 estimated EPS suggest a dividend increase of 30 per cent is possible,” said Mr. Holden.

* RBC’s Darko Mihelic to $83 from $81 with an “outperform” rating.

* BMO’s Tom MacKinnon to $89 from $85 with an “outperform” rating.

* Canaccord Genuity’s Scott Chan to $89.50 from $85.50 with a “buy” rating.

* Scotia Capital’s Meny Grauman to $91 from $90 with a “sector outperform” rating.

* National Bank Financial’s Gabriel Dechaine to $87 from $86 with an “outperform” rating.

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ATB Capital Markets analyst Tim Monachello expects “persistent” global supply chain issues to present a risk for the 2022 results of Ag Growth International Inc. (AFN-T).

In a research report released Thursday, he cut his financial expectations for the Winnipeg-based company in response to an operational update in which it reiterated full-year 2021 guidance and confirmed supply chain issues would lead to margin compression, leading to a decline in EBITDA despite revenue gains. Mr. Monachello’s third-quarter EBITDA estimate slid to $47-million from $53-million with his full-year projection dipping to $172-million from $182-million.

Also pointing to the close of its $100-million offering of 5.00-per-cent unsecured subordinated convertible debentures, the analyst cut his target to $52 from $58, above the $44.86 average, with an “outperform” rating

“We believe mid-term risks facing the company are significantly outweighed by upside for investors given 1) record demand as evidenced by 99 per cent higher backlogs year-over-year; 2) AFN’s transition to a FCF harvest cycle which we expect to result in meaningful deleveraging over our forecast horizon to roughly 3.5 times net debt/EBITDAS by H2/23 (5.3 times at Q2/21); and 3) AFN’s attractive valuation trading at 8.4 times, 6.9 times, and 6.1 times our 2021, 2022, and 2023 EV/EBITDAS estimates with roughly 12-per-cent, 21-per-cent and 24-per-cent distributable FCF yields in each year, respectively.”

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Rivalry Corp. (RVLY-X) is “well positioned to ride the tailwinds of esports and esports betting growth, given its deep roots in the sector,” according to Eight Capital analyst Adhir Kadve.

He initiated coverage of the Toronto-based company, which began trading on the Venture Exchange on Oct. 5, with a “buy” rating, emphasizing it “aims to create true product differentiation by focusing on a user experience catered to this incredibly valuable demographic and building brand affinity with them, with the ultimate goal to cross-sell them from esports into their other product offerings such as traditional sports betting and casino offerings.”

Mr. Kadve sees several sources of potential growth moving forward including marketing campaigns aimed at growing its market share, including Australia and Ontario, and the potential for M&A activity.

“Rivalry employs an efficient user acquisition strategy which leverages its strong social media following and the use of content creators and influencers to attract next-gen bettors to the platform,” the analyst said. “This strategy lowers the company’s CAC and allows Rivalry to compete with the large global sports betting operators and their massive marketing budgets. With a strong balance sheet ($40-million in cash), Rivalry can efficiently deploy marketing dollars, with a focus on user growth and building out its brand equity.”

He set a target of $4 per share, which represents 70-per-cent upside to its Wednesday close of $2.33.

“Rivalry currently trades at 4.2 times fiscal 2022 estimated Sales, roughly in-line with to Online Gaming operators at 4.0 times and a discount to pure-play U.S. sportsbook peer DKNG (Not Rated) which trades at 9.7 times,” said Mr. Kadve. “Our $4 target implies 8 times, a premium to the Online Gaming operators on account of higher growth rates and potential for TAM expansion, but a discount to DraftKings given DKNG’s dominant position in the fully regulated U.S. gaming market.”

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In other analyst actions:

* TD Securities analyst Steven Green initiated coverage of Prime Mining Corp. (PRYM-X) with a “speculative buy” rating and $6.50 target. The average is $6.05.

* National Bank Financial analyst Gabriel Dechaine increased his Sun Life Financial Inc. (SLF-T) target to $79 from $78 with an “outperform” rating. The average is $74.77.

* Mr. Dechaine raised his Great-West Lifeco Inc. (GWO-T) target to $39 from $38, keeping a “sector perform” rating. The average is $40.20.

* National Bank’s Michael Robertson raised his Pason Systems Inc. (PSI-T) target to $12.25 from $11, reiterating a “sector perform” rating. The average is $12.46.

* National Bank’s Tal Woolley raised his Storagevault Canada Inc. (SVI-X) target by $1 to $7.50, exceeding the $6.95 average, with an “outperform” rating, while Canaccord Genuity’s Christopher Koutsikaloudis bumped up his target to $7.25 from $6 with a “buy” rating.

“While performance from the self-storage sector proved resilient throughout 2020, fundamentals have strengthened considerably since the beginning of 2021 as higher construction costs and project delays have constrained new supply while demand has remained strong. This backdrop contributed to another quarter of exceptionally strong financial performance from StorageVault Canada Inc.,” said Mr. Koutsikaloudis.

* National Bank’s Travis Wood cut his target for Parex Resources Inc. (PXT-T) to $33 from $35 with an “outperform” rating, while Stifel’s Cody Kwong raised his target to $36.50 from $34 with a “buy” rating. The current average is $33.70.

“Our review of Parex’s 3Q21 earnings report shows the Company matching consensus production and FFO expectations despite investing less than anticipated in the quarter,” said Mr. Kwong. “The key takeaway in this update will be the announcement of a 2-cent per share special dividend (payable later in November) which clearly reinforces the Company’s commitment to returning capital to shareholders. Parex also laid out an active 4Q21 2021 and a capital program that ratchets up in 2022, highlighted by exploration, delineation, and seismic on new prospects comprising more than 50 per cent of next year’s budget. With increased activity and heightened return of capital outlook we are increasing our target.”.

* National Bank’s Jaeme Gloyn raised his Goeasy Ltd. (GSY-T) target to $220 from $196 with an “outperform” rating. The average is $227.43.

* Mizuho analyst Christopher Parkinson increased his Nutrien Ltd. (NTR-N, NTR-T) target to US$75 from US$70 with a “neutral” rating. The average is US$79.31.

* RBC Dominion Securities analyst Sabahat Khan raised his target for Spin Master Corp. (TOY-T) to $61 from $59 with an “outperform” rating, while National Bank Financial’s Adam Shine increased his target to $61 from $58 also with an “outperform” rating. The average is $54.27.

* RBC’s Robert Kwan cut his Keyera Corp. (KEY-T) target to $34 from $36 with an “outperform” rating, while Canaccord Genuity’s John Bereznicki moved his target to $35 from $37 with a “buy” rating and BMO’s Ben Pham to $31 from $33 with a “market perform” recommendation. The average is $34.69.

“We expect Keyera to benefit from improving system volumes in 2022, but note the company has a relatively active planned turnaround schedule next year,” said Mr. Bereznicki. “We also expect KMS to enjoy solid tailwinds through Q1/22 but believe it will need to realize ISO Octane pricing gains to sustain its current segment margin run rate after that point. In our view, the company’s facility optimization and cost savings initiatives should be beneficial as Keyera undertakes the balance of its KAPS spending ahead of its 2023 commissioning. We also believe the company has numerous opportunities to pursue low-hanging fruit within its operations as fundamentals recover, which could be incremental to our estimates. Longer-term we also view Keyera’s strong infrastructure presence in Alberta’s Industrial Heartland as leaving it well positioned to participate in large-scale energy transition initiatives.”

* CIBC’s Anita Soni raised his B2Gold Corp. (BTG-N, BTO-T) target to US$6.25 from US$5.75, topping the US$5.72 average, with an “outperformer” rating.

* CIBC’s Todd Coupland increased his Nuvei Corp. (NVEI-Q, NVEI-T) target to US$160 from US$123.75 with an “outperformer” rating. The average is US$140.67.

“Nuvei will report its Q3 prior to the market open on November 9,” he said. “We expect strong organic growth as the recent trends that caused Nuvei to increase its mid- and long-term outlooks continue. The target calls for 30-per-cent annual volume and revenue growth for the medium term and EBITDA margins of 50 per cent-plus in the long term. Recall in Q2, organic volume and revenue growth was 68 per cent year-over-year and EBITDA margins were 45 per cent. We maintain our view that Nuvei’s shares are attractive and should be purchased.”

* CIBC’s Sumayya Syed raised her Dream Industrial Real Estate Investment Trust (DIR.UN-T) target by $1 to $19, topping the $18.83 average, with an “outperformer” rating.

* CIBC’s Dean Wilkinson moved his First Capital Real Estate Investment Trust (FCR.UN-T) target to $23 from $22 with an “outperformer” rating, while BMO’s Jenny Ma bumped up her target to $21.50 from $21 with an “outperform” recommendation. The average is $21.14.

“Q3/21 results were in line with our expectations, and reinforce our view that the broader retail outlook continues to improve; occupancy was stable (and now sits only slightly below pre-pandemic levels) while renewal lifts continue to remain at very healthy levels, which ultimately culminated in organic growth of 2.6 per cent (4.2 per cent if including the impact of lower bad debt expense year-over-year and termination fees). Further, the REIT continues to de-lever its balance sheet, which we view as a potential (although secondary to overall retail sentiment) catalyst for valuation expansion (while also effectively highgrading the portfolio). With units trading at a 20-per-cent discount to our NAV estimate (and a relative discount to the most comparable peers), we continue to believe that FCR offers compelling valuation optionality,” said Mr. Wilkinson.

* CIBC’s Scott Fromson raised his True North Commercial Real Estate Investment Trust (TNT.UN-T) target to $7.75 from $7.25, maintaining a “neutral” recommendation. The current average is $7.50.

* TD Securities analyst Jonathan Kelcher raised his Cominar Real Estate Investment Trust (CUF.UN-T) target to $11.75 from $11 with a “hold” rating. The average is $11.63.

* TD’s Menno Hulshof increased his Cenovus Energy Inc. (CVE-T) target to $21 from $19.50 with a “buy” rating, while JP Morgan’s Phil Gresh raised his target to $19 from $15.50 with an “overweight” rating and and Raymond James’ George Huang raised his target to $19 from $18 with an “outperform” rating. The average is $18.48.

“Strong 3Q21 results from Cenovus were accompanied by the company’s first steps in delivering on the promise of accelerated cash returns,” said Mr. Huang. “While the base dividend yield is not yet competitive with its Canadian large cap peers, we believe the company is making a sound long-term strategic decision by prioritizing share repurchases at this juncture given the shares’ significant discount to peers as well as, intrinsic value. Our recent upgrade reflects our increasing confidence that the CVE story boasts the highest rate of fundamental change within our large cap coverage universe. This coupled with a discounted valuation and an accelerating cash return profile drive our Outperform Rating.”

* Canaccord Genuity analyst Matthew Lee raised his Black Diamond Group Ltd. (BDI-T) target to $6 from $5.50, keeping a “buy” rating, while Raymond James’ Frederic Bastien moved his target to $7 from $6.25 with an “outperform” rating and BMO’s John Gibson raised his target to $7 from $5.50 with an “outperform” rating. The average is $6.63.

“Black Diamond Group reported Q3/21 results [Tuesday] with revenue and EBITDA both beating forecasts,” said Mr. Lee. “While much of the beat was non-recurring in nature, we believe that the heightened installation revenue largely points to strong demand for new rental agreements, which should lead to higher utilization and better rates. We were also encouraged by the reinstatement of a dividend, which we believe reflects management’s confidence in its ability to generate adequate cash flow to support the dividend, debt repayment, and future M&A activity. While shares are up over 9 per cent [Wednesday], we believe that BDI continues to have upside over the medium term from continued rate increases and organic fleet growth, the expansion of LodgeLink, and additional acquisitions.”

* ATB’s Chris Murray raised his NFI Group Inc. (NFI-T) target to $38 from $34 with an “outperform” rating. The average is $30.63.

* Desjardins Securities analyst Frederic Tremblay trimmed his 5N Plus Inc. (VNP-T) target to $4 from $4.50 with a “buy” rating and Raymond James’ Michael Glen cut his target to $4.50 from $5 with an “outperform” recommendation. The average target is $4.55.

“Solid demand fuelled better-than-expected revenue in 3Q while inflationary pressures associated with global supply chain disruptions contributed to an adjusted EBITDA miss and revised 2021 guidance,” Mr. Tremblay said. “We see revenue tailwinds continuing, both in the short and long term, and believe that the current cost environment will likely continue to weigh on margins for a few quarters. Valuation and our constructive stance on VNP’s next phase of growth support our Buy recommendation.”

* BMO Nesbitt Burns analyst Peter Sklar raised his Parkland Fuel Corp. (PKI-T) target to $52 from $49, topping the $50.36 average, with an “outperform” rating.

* BMO’s Randy Ollenberger increased his Tourmaline Oil Corp. (TOU-T) target to $55 from $52, keeping an “outperform” rating. The average is $61.35.

“We believe Tourmaline shares are still attractively valued and that the company is uniquely positioned to generate impressive levels of free cash flow, which allow it to accelerate returns to shareholders as seen with its recent special dividend,” he said.