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

Dollarama Inc. (DOL-T) displayed its “resilience” with “solid” third-quarter 2022 financial results, according to iA Capital Markets’ Neil Linsdell.

He was one of several equity analysts on the Street to raise their target prices for shares of the Montreal-based discount retailer following Wednesday’s earnings release, which was met with a muted response by investors. It fell a mere 0.4 per cent during the trading session.

“The Company has managed inventory well and maintained profitability despite rising costs and supply chain challenges,” said Mr. Linsdell. “It continues to expand both domestically and internationally and remains a solid retailer with a great mix of products and unique value proposition. We believe the Company can maintain its resilience amid multiple uncertainties.”

Dollarama reported sales of $1.122-billion, up 5.5 per cent year-over-year and largely in-line with both Mr. Linsdell’s $1.155-billion estimate and the consensus projection of $1.119-billion, as same-store sales growth rose 0.8 per cent (versus a tough 7.1-per-cent benchmark from a year ago). Earnings per share rose 9 cents from fiscal 2021 to 61 cents, topping forecasts (58 cents and 57 cents, respectively).

“The outlook for Q4 includes better revenue growth versus Q4/F21 (at negative 0.2-per-cent SSS), which was impacted by lockdowns in parts of the country and the ban on non-essential items in Quebec,” said Mr. Linsdell. “The pick-up in lower-margin sales however will lead to year-over-year gross margin pressure in Q4. Management continues to deal with a fluid pricing environment and highly iterative approach as Dollarama follows competitor pricing while maintaining its value proposition with a product mix that refreshes 25-30 per cent per year, providing lots of flexibility.”

Emphasizing both inflation and supply chain disruptions remain the chief concern of investors in the retail space, Mr. Linsdell said he thinks Dollarama is poised to “fare better” than most of its peers, pointing to “its solid value proposition (economically priced every day and seasonal goods), well-developed logistics, buying power, and its ability to maintain margins by managing product assortments as it refreshes 25-30 per cent of its SKUs each year.”

“Dollarama is the largest value store chain in Canada, appealing to all demographics – lower income consumers with limited budgets and higher income consumers on treasure hunts,” he said. “Therefore, it is not overly dependent on one specific demographic segment. Its stores carry a balanced product mix, with most food and health & beauty products sourced in North America, while slightly over 50 per cent of purchases (mostly general merchandise) are sourced from over 25 countries.

“The Company has multiple levers to mitigate inflation and supply chain risks. Introducing a higher price point ($5.00) is certainly one method, although management remains non-committal as to when that might occur. Pricing and product mix optimization are what the Company is good at. Even though it is a price follower, there is lots of wiggle room for price increases, especially on products with price tags between $1.00 and $2.00. The “no exchange, no return” policy removes additional burden on inventory management, which is a competitive advantage at any time. As for the supply chain, the Company has already demonstrated its ability to manage the situation well. Although most overseas items are still sourced from China, the Company maintains a broad list of suppliers from over 25 countries, mitigating risk while still benefiting from reliable supply from China as the manufacturing system will not grind to a halt even when facing new COVID variant.”

Maintaining a “buy” rating for Dollarama shares, Mr. Linsdell raised his target to $67 from $62. The average on the Street is $64, according to Refinitiv data.

“We remain positive on the Company to optimize product mix for margin protection and maintain solid growth from more normalized SSS growth,” he said. “The typical store size of 10K sq. ft is nimble enough for the Company to take advantage of areas with retail store closures and to negotiate commercial leases with better terms. We expect continuous store expansion in both domestic and international markets to be the growth driver in the mid to long term.”

Other analysts making adjustments include:

* BMO’s Peter Sklar to $61 from $59 with a “market perform” rating.

“Despite an EPS beat on better-than-anticipated high-margin Halloween sales, positive guidance on FQ4/22 SSS, and inventory position, Dollarama closed down 0.4 per cent [Wednesday],” said Mr. Sklar. “We believe this is due to continued general investor concerns about supply chain issues, which will likely weigh on the stock into FY2023, and as a result, we remain Market Perform rated on Dollarama.

“However, we believe major discretionary retailers, such as Dollarama and Canadian Tire, will fare better than smaller retailers due to their scale and established supply chain access.”

* Scotia’s Patricia Baker to $66 from $64 with a “sector outperform” rating.

“We believe we could see the shares playing a bit of catch-up as we move through the remainder of the year and into 2022 given the defensive nature of the business, unique operating model, multiple levers to navigate supply chain, potential FX tailwinds, and a potentially positive inflationary backdrop,” said Ms. Baker.

* RBC’s Irene Nattel to $77 from $70 with an “outperform” rating.

“Strong FQ3 results, above consensus and our street-high forecast, underpinned by robust seasonal mix and in-stock position bode well for the all-important Christmas period,” said Ms. Nattel. “Results underscore DOL’s supply chain and logistics capabilities and unique ability to manage gross margin. Tepid stock reaction to solid results likely reflects broader weakness in consumer names, and we reiterate our OP rating at current levels.”

* TD Securities’ Brian Morrison to $72 from $68 with a “buy” rating.

* CIBC’s Mark Petrie to $60 from $59 with a “neutral” rating.

* TD Securities’ Brian Morrison to $66 from $64 with a “buy” rating.

* National Bank Financial’s Vishal Shreedhar to $66 from $64 with an “outperform” rating.

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In response to the recent pullback in commodity prices, TD Securities analyst Aaron MacNeil increased his stance on the Energy Services sector to “overweight” for the first time since 2017.

“Over the past few weeks, we have caught up with our coverage universe and other industry participants,” he said. “A consistent theme from these conversations revolved around the pervasive inflationary pressure that is being experienced across the industry. However, we believe that the recent pullback in commodity prices shifts negotiating power back to the E&Ps and, as a result, believe that it will be harder to implement meaningful pricing improvements over and above ongoing inflationary pressure.”

“If our thesis that the recent reduction in commodity prices does not have a meaningful impact on the capital-spending outlook is correct, we believe that the Energy Services sector has become more competitive through a value lens when compared with the SMID-cap E&P space as the differences in FCF yields have narrowed following the recent commodity-price pullback. As a result, we believe that there are several opportunities in the space for small-cap-focused energy investors.”

In conjunction with the report, Mr. MacNeil made a pair of upgrades:

* Precision Drilling Corp. (PD-T) to “buy” from “hold” with a $57 target. The average on the Street is $67.47.

“Precision’s FCF yield of 16 per cent is the third highest in the coverage universe and ranks well when compared with other small-cap energy names,” he said. “Notably, we downgraded the stock entirely due to valuation in June 2021 at a share price of $47.34, when the U.S. rig count was 456 rigs and the WTI spot price was US$69.00. Since that time, the U.S. rig count has increased by more than 100 rigs and WTI is in the low US$70.00s. This is exactly the type of pullback we were looking for to get more bullish on the name.”

“Among the companies in our coverage universe that derive essentially all revenues from E&P capital spending, we believe that Precision features the best combination of attributes, including: a high-spec drilling rig fleet, commercial and competitive technology platform, strong operational execution, strong free-cash-flow-generation, and an established track-record of achieving/exceeding its debt-reduction targets. With valuation moving into more attractive territory, we are upgrading the stock”

* North American Construction Group Ltd. (NOA-T) to “buy” from “hold” with a $25 from $23, exceeding the $24.90 average.

Mr. MacNeil thinks there are also “a handful of strong investment candidates for value investors who are willing to go down market cap and, in some cases, invest in companies with higher leverage ratios, particularly as commodity curves are backwardated.”

Believing CES Energy Solutions Corp. (CEU-T) has the “most attractive” free cash flow yield in his coverage universe, he moved it to the top of his pecking order.

However, after updates to his sector estimates based on industry forecasts, pricing power and inflationary pressure, he trimmed his target for its shares to $4.25 from $4.50 with a “buy” rating. The average on the Street is $3.26.

He also made these other target changes:

  • Enerflex Ltd. (EFX-T, “buy”) to $14 from $15. Average: $11.58.
  • Ensign Energy Services Inc. (ESI-T, “hold”) to $2 from $2.25. Average: $2.49.
  • Mullen Group Ltd. (MTL-T, “buy”) to $17 from $19. Average: $15.
  • Shawcor Ltd. (SCL-T, “buy”) to $8.50 from $9.50. Average: $7.68.
  • Secure Energy Services Inc. (SES-T, “buy”) to $7.50 from $8. Average: $7.63.
  • Trican Well Service Ltd. (TCW-T, “hold”) to $3.25 from $3.50. Average: $4.14.

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Believing “recent margin pressure concerns and associated share price declines are overblown,” Raymond James analyst Steve Hansen raised his rating for Boyd Group Services Inc. (BYD-T) to “strong buy” from “outperform.”

“We have good reason to be upbeat; recent channel checks with industry-leading MSOs suggest that help is on the way — primarily in the form of healthy price increases from major insurance carriers come Jan. 1st,” he said. “While price increases alone won’t alleviate all of Boyd’s recent cost inflation challenges (labor availability, parts supply), we do think they’ll provide an immediate margin benefit in 1Q22 that will set us on a normalization path over 2-3 quarters.”

He maintained a target of $255 per share, exceeding the $249.54 average on the Street.

“We are upgrading our rating back to Strong Buy based upon: 1) our constructive view of Boyd’s long-term growth prospects; 2) increased confidence that the aforementioned margin pressure will prove transitory (not permanent as some have suggested); and 3) the sharp 24 per cent decline in BYD’s share price over the past seven weeks (a rare occasion),” he said. “In short, we continue to believe that Boyd will continue to be a long-term compounder and encourage growth-orientated investors to add to positions on the current pullback.”

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Following the release of its 2022 business plans and an increase to its annual dividend (to 60 cents from 48 cents) after the bell on Wednesday, CIBC World Markets analyst Kevin Chiang downgraded Mullen Group Ltd. (MTL-T) to “neutral” from “outperformer” with a $13.50 target, down from $15.50 and below the average of $15.23.

“MTL’s operating model has proven to be resilient during the pandemic, with the company raising its dividend and planning to renew its NCIB,” he said. W”e also recognize there is upside to its outlook as it does not build in any unannounced M&A. The company has a history of looking to underpromise and overdeliver. That said, MTL’s 2022 business plan does reflect a lower level of earnings momentum versus the other freight transportation names we cover. Given the extended run we have seen with freight transportation equities, combined with supply chain/inflation concerns, we believe a more tactical investment approach is required when looking at this sector.”

Elsewhere, iA Capital Markets analyst Matthew Weekes trimmed his target to $16 from $17.50 with a “strong buy” rating, while TD Securities’ Aaron MacNeil cut his target to $17 from $19 with a “buy” rating.

“We are maintaining our Strong Buy rating despite our tempered outlook, as we continue to see attractive risk-adjusted upside in the stock,” he said.

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Though her outlook for Neighbourly Pharmacy Inc. (NBLY-T) remains “strong and intact,” iA Capital Markets analyst Chelsea Stellick downgraded its shares on Thursday to a “buy” recommendation from “hold” based on recent “strong” price movement.

The Toronto-based independent pharmacy operator jumped 13.84 per cent on Wednesday to a new all-time high of $38.84, exceeding Ms. Stellick’s Street-high $36 target.

“We maintain the belief that NBLY will continue to grow steadily while it builds M&A momentum ahead of schedule,” she said

“Subsequent to Q2/F22, Neighbourly announced a $41-million acquisition of 20 pharmacies in Alberta funded from cash on hand, including a central fill pharmacy and a compounding pharmacy. Including an additional independent pharmacy acquisition that closed around the time of the announcement, these 21 new locations are expected to contribute $7-million adjusted EBITDA annually. As if to prove that an acquisition brings regional momentum, an additional acquisition of five pharmacies in B.C. and Alberta was announced shortly thereafter for $21-million, funded with cash. These five pharmacies are expected to contribute $3-million adjusted EBITDA annually. Including the 14 pharmacies previously acquired, this puts NBLY well ahead of its historical 35 pharmacies per year average to 40 pharmacies added to the network thus far in fiscal 2022.”

Ms. Stellick kept her $36 target, which exceeds the $33.86 average.

“We believe incremental M&A can make the most of Neighbourly’s increasingly powerful competitive advantage of operating leverage through consolidation which will translate to gradually improving EBITDA margins over time,” she said. “We are forecasting a strong Q3/F22, especially in light of NBLY’s guidance of more than 60,000 flu vaccines and the increasingly strong case for COVID-19 vaccine booster.”

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After its shares dropped in price by 40.4 per cent on Wednesday following the release of a scathing report from U.S. short seller Spruce Point Capital Management, BMO Nesbitt Burns analyst James Fotheringham upgraded Nuvei Corp. (NVEI-Q, NVEI-T) to “outperform” from “market perform,” recommending the Montreal-based payment processor for growth at a reasonable price-oriented investors.

“NVEI shares had fallen more than 30 per cent over the past month (in-line with payment industry peers), before falling a further 40 per cent [Wednesday] (catalyzed by a report issued by a short seller),”he said.

“ Following our detailed review of the short report, we make no changes to our NVEI model, and we maintain our $114 target price (which now implies 97-per-cent upside).”

His target remains below the current average on the Street of US$131.80.

“Payment technology stocks outperformed during previous U.S. COVID waves; indeed, during the heart of the pandemic (1H20), payment valuation multiples (we use rolling two-year-forward P/E) re-rated by more than 40 per cent on average across the sector, as card networks and digital merchant acquirers benefited from the spike in e-commerce volume growth during lock-downs,” said the analyst. “Organic revenue growth potential has always been the key driver of valuation for payment stocks; if we’re heading back to the historical function relating revenue growth to valuation), then some stocks (like NVEI) have already over-shot to the downside, offering exciting returns even on the basis of that prepandemic growth-value function.”

Elsewhere, CIBC’s Todd Coupland lowered his target to US$76 from US$160, keeping an “outperformer” rating.

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IA Capital Markets analyst Matthew Weekes thinks Pembina Pipeline Corp.’s (PPL-T) growth options remain “robust,” seeing “tailwinds aplenty.”

However, upon assuming coverage of the Calgary-based company following Wednesday’s release of its 2022 guidance, business updates and additional ESG priorities, he expressed caution as he awaits sanctioning for a group of projects.

“While we believe that the fundamental outlook for PPL’s business is positive, and there are numerous growth opportunities in the pipeline, the Company’s current backlog of sanctioned projects remains sparse resulting in limited visibility for near-term growth as future expected incremental projects will have multi-year build cycles,” he said.

Pembina’s earnings before interest, taxes, depreciation and amortization (EBITDA) guidance of a range of $3.35-$3.55-billion fell in line with iA Capital Markets’ projection of $3.52-billion. Its capital budget of $655-million also largely matched expectations.

“PPL highlighted strong volumes and pricing within its value chain, strong contracting demand on the Alliance Pipeline, agreements executed with northeast B.C. Montney producers, and growing Alberta petrochemical demand for NGLs, as well as the potential for Veresen to construct a new 200 million cubic feet per day NGL extraction facility with FID expected in H1/22,” said Mr. Weekes.

“While the pipeline of potential projects is filling up, there remains little in the Company’s secured growth backlog, with the reactivation decisions for the Peace Phase VIII Expansion and Prince Rupert Expansion expected in H1/22. We believe that these projects are likely to be sanctioned, providing upside to PPL’s current plan. With minimal CAPEX, PPL expects to allocate up to $200-million of excess cash flow to share repurchases in H1/22.”

Though he raised his 2022 adjusted EBITDA projection to reflect the Peace Phase VII expansion coming on-stream in the middle of next year ahead of schedule and budget, Mr. Weekes trimmed the firm’s target for Pembina Pipeline shares to $43 from $45 based on valuation changes The average is currently $44.25.

Elsewhere, TD Securities analyst Linda Ezergailis trimmed her target to $44 from $45 with a “buy” rating.

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Timbercreek Financial Corp. (TF-T) provides an “attractive and sustainable” yield in a low interest rate environment, according to Canaccord Genuity analyst Christopher Koutsikaloudis.

He initiated coverage of the Toronto-based mortgage investment company with a “buy” rating on Thursday.

“Timbercreek Financial (Timbercreek) is Canada’s largest Mortgage Investment Corporation (MIC) and currently owns a portfolio of 111 mortgage investments with a total balance of $1.1-billion and a weighted-average interest rate of 7.1 per cent,” said the analyst. “MICs are required to distribute substantially all income to shareholders to maintain their tax-exempt status, and dividend income is, therefore, the primary source of returns for Timbercreek’s shareholders over the longer term.

“In our view, Timbercreek provides investors with an attractive dividend yield that is backed by first mortgage investments in income-generating properties. These investments are underwritten by an experienced manager with a track record of limited credit losses.”

Mr. Koutsikaloudis said the current interest rate on its mortgage portfolio is “attractive relative to benchmark bond yields,” noting: “Timbercreek focuses on segments of the credit market where there is limited competition from larger institutions, including loans used to finance investments in repositioning real estate. These loans feature shorter durations, lower principal amounts, and more flexible terms compared to mortgages issued by larger financial institutions. In addition, these loans are not ideally suited for CMHC insurance. As a result, the weighted-average interest rate on Timbercreek’s portfolio has held steady in the low 7-per-cent range since 2016 and was 7.1 per cent as of Q3/21, notwithstanding extremely low bond yields.”

Also emphasizing its “disciplined” underwriting, which has supported low historical credit losses, and the advantages brought by its expertise and deal flow, he set a target of $10.25 per share. The average on the Street is $9.88.

“Our $10.25 target price for Timbercreek is based on a price-to-book multiple of 1.2 times and equates to a 500-basis points spread between the current dividend yield and the 2-year Government of Canada bond yield, in line with the MIC’s long-term historical average,” Mr. Koutsikaloudis said. “This compares to Timbercreek’s current price-to-book multiple of 1.1 times and a multiple of, on average, 1.2 times for Atrium Mortgage Investment Corporation and Firm Capital Mortgage Investment Corporation. We believe Timbercreek should trade in line with peers and at a premium to book value given its strong underwriting track record and attractive yield in the current low interest rate environment. Our target price implies a one-year total return of 17.9 per cent.”

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Echelon Capital Markets analyst Michael Mueller initiated coverage of American Lithium Corp. (LI-X) and E3 Metals Corp. (ETMC-X) with “speculative buy” recommendations on Thursday.

He called Vancouver-based American Lithium a diversified developer with a “nuclear option” in its PEA-level Macusani project in Peru.

“American Lithium offers investors exposure to a uranium sector that we believe to be unique among other junior lithium developers,” he said. “Macusani is located 20-25 kilometres east of [its] Falchani project with an existing resource of 124.0Mlbs of U3O8. While work has commenced to update its 2016 PEA, we would note that the PEA demonstrated an after-tax NPV-8% of US$603-million at US$50 per pound U3O8 and a breakeven price of just US$25.66 per pound (relative to recent prices north of US$45/lb). While American Lithium has outlined plans to further expand and upgrade the resource at Macusani, we believe the Company will work to maximize the project’s value for all shareholders, whether that be via an outright sale of the project to a uranium developer/producer or through a spin-out of the project into a separate entity.”

Seeing a number of potential near-term catalysts through its ongoing exploration and extension drill program across its three assets (Falchani and Macusani in Peru and TLC in Nevada), he set a target of $8.20 per share, equating to a 64.3-per-cent return on its Wednesday close of $4.99. The average is $8.25.

“With the lithium sector heating up to meet increasing demand for the battery metal, we encourage investors looking for exposure to this space to look to American Lithium given a number of significant upcoming catalysts as it carries out an aggressive exploration program through the balance of 2021 and into 2022,” said Mr. Mueller. “Given the focus in the U.S. to secure domestic supply of lithium, activity in Nevada (in and around the TLC Project) continues to trend up and we believe the completion of the maiden PEA on that project will provide further comfort on the project’s outlook. Importantly, and uniquely among its lithium peers, the potential embedded value of the Macusani Uranium project may provide American Lithium with additional funds to advance one or both of its lithium projects, while retaining a significant interest in the Macusani project for the benefit of the Company and shareholders.”

In a separate note, Mr. Mueller touted the “Alberta advantage” for Calgary-based E3 Metals, noting: “E3′s Alberta-based project has a number of advantages, including decades of oil and gas operations in the area that have provided the Company with a comparatively high-resolution data set throughout its acreage, which has been used to characterize the parameters of the aquifer. Additionally, a well-developed social license and regulatory regime in the province will (we believe) allow E3 to advance its Clearwater project to commercial production in a relatively expeditious manner.”

“While development of DLE [direct lithium extraction] technology has been advancing in recent years, E3 is unique among many of its peers in that it is developing its own DLE technology in parallel with its lithium resource. With 7.0Mt of Inferred resource ascribed across its permits, E3′s 100-per-cent ownership will offer advantageous economics if its DLE pilot proves successful on the commercial scale.”

He set a target of $5 per share, implying a 104-per-cent return, which tops the $4.35 average.

“Over the next 12 months, we expect E3 to achieve several significant milestones as it develops its resource base towards the pre-feasibility (PFS) stage as well as advancing its DLE technology towards proof of commercialization. Of these catalysts, we highlight (1) DLE Technology Optimization (2022); (2) Aquifer Production Testing (Q222- Q322); (3) De-Risking Flowsheet (H222-H123); (4) Initial LHM Production (H222); and (5) Clearwater PFS (H123) as being particularly relevant to investors,” said Mr. Mueller.

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In other analyst actions:

* JP Morgan analyst Phil Gresh cut Canadian Natural Resources Ltd. (CNQ-T) to “neutral” from “overweight” with a target of $66, up from $62 and above the $63.11 average.

* Mr. Gresh also raised his targets for a group of TSX-listed energy stocks: Cenovus Energy Inc. (CVE-T, “overweight”) to $21 from $19, Imperial Oil Ltd. (IMO-T, “neutral”) to $53 from $49, MEG Energy Corp. (MEG-T, “neutral”) to $15 from $12 and Suncor Energy Inc. (SU-T, “overweight”) to $42 from $39. The averages on the Street are $20, $48.53, $15.07 and $40.04, respectively.

* Eight Capital initiated coverage of E Automotive Inc. (EINC-T) with a “buy” rating and $28 target, above the $27.98 average.

* Morgan Stanley analyst Ioannis Masvoulas increased his target for First Quantum Minerals Ltd. (FM-T) to $39 from $31 with an “overweight” rating. The average is $34.

* Calling it “a pure play on esports and video game lifestyle,” Canaccord Genuity analyst Robert Young initiated coverage of Toronto-based GameSquare Esports Inc. (GSQ-CN) with a “speculative buy” rating and 60-cent target.

“GameSquare is an emerging digital marketing agency focused on the high growth video game and esports market,” he said. “The company leverages digital media, influencer marketing and esports team assets to act as a bridge between brands and the large, youthful, and highly sought after esports community. Through the recent acquisition of Complexity Gaming, a popular esports organization affiliated with the Dallas Cowboys, GameSquare became the esports and gaming agency of record to the Cowboys organization on a multi-year deal, elevating the profile significantly. Our positive view is to some extent a ‘bet on the jockey’ given a seasoned management team led by Justin Kenna, who was a key driver of growth at FaZe Clan, a global esports organization. Marquee investors include Jerry Jones (Dallas Cowboys) and Travis Goff, who together own 47 per cent of GameSquare and suggest a high level of access to Cowboys resources. While GSQ shares have been under pressure recently alongside small-cap tech peers, we see an opportunity for multiple expansion as investors better understand the company’s positioning relative to industry tailwinds. Higher risk and a limited operating and financial track record inform our SPECULATIVE BUY rating.”

* Mr. Masvoulas also raised his Lundin Mining Corp. (LUN-T) target to $12, topping the $11.95 average, from $10.60 with an “equalweight” recommendation.

* National Bank Financial initiated coverage of Vancouver-based Foran Mining Corp. (FOM-X) with a “sector perform” rating and $3.25 target. The average is $2.89.

* TD Securities analyst Jonathan Kelcher resumed coverage of Morguard Real Estate Investment Trust (MRT.UN-T) with a “hold” rating and $6 target, matching the consensus and down from $6.50.

* Following its acquisition of a gold stream from Ivanplats Ltd. on the Platreef project in South Africa, A a group of analysts raised their targets for Nomad Royalty Co. Ltd. (NSR-T). They include: Stifel’s Ingrid Rico to $21.50 from $20 with a “buy” rating; CIBC World Markets’ Allison Carson to $12.50 from $12 with a “neutral” rating; Canaccord Genuity’s Carey MacRury to $18 from $17 with a “buy” rating and Raymond James’ Brian MacArthur to $17.50 from $16.50 with an “outperform” rating. The average is $17.27.

“We view the transaction as positive, with an NPV5% of $147 million and IRR of 10 per cent on our long-term gold price assumption of $1,860 per ounce; 8 per cent at US$1,500 per ounce,” said Mr. MacRury. “The Platreef stream gives Nomad another long-life, anchor asset, representing 20 per cent of our royalty NAV for Nomad and further diversifying the company asset portfolio. Recall the company announced the acquisition of a gold stream on Orion’s 40-per-cent interest in the Greenstone gold project in Ontario.

“The transaction also demonstrates the alignment between Nomad as a stream/royalty provider and Orion as a debt/equity/offtake provider to potentially offer full financing solutions to the mining industry.”

* CIBC’s Mark Petrie raised his North West Company Inc. (NWC-T) target to $40 from $39, which is the current consensus, with a “neutral” rating, while TD Securities’ Michael Aelst increased his target to $39 from $38 with a “hold” rating.

* Echelon Capital analyst Gabriel Gonzalez initiated coverage of Silver X Mining Corp. (AGX-X) with a “speculative buy” rating and $1 target, exceeding the 82-cent average.

“We are initiating coverage of Silver X, an emerging junior silver producer focused on near-term positive cash flow and production growth at its Nueva Recuperada project in Peru,” he said. “The project is completing a fully funded expansion to 720tpd (from 600tpd) with which it expects to reach positive cash flow early in Q122. We look for 2022 production of approximately 1.8Moz AgEq, at AISC of $17-18 per ounce AgEq, generating EBITDA of approximately $8.1-million. Nueva Recuperada currently is in pre-commercial production; we anticipate commercial production and initial guidance in around mid-H122.”

* National Bank Financial analyst Matt Kornack resumed coverage of Slate Office REIT (SOT.UN-T) with a “sector perform” rating and $5.25 target, down from $5.50, with a “neutral” rating, while TD Securities’ Jonathan Kelcher resumed coverage with a “hold” recommendation and $5.50 target. The average is $5.59.

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