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

After Shopify Inc. (SHOP-N, SHOP-T) blew past expectations with its second-quarter financial results despite lingering macroeconomic uncertainty, RBC Dominion Securities’ Paul Treiber thinks investor visibility to both growth and profitability has improved, expecting “expect sentiment to continue to rise as new products are likely accretive to Shopify’s gross margins, while revenue is likely to outpace opex growth.”

He was one of a group of equity analysts on the Street to raise their financial expectations and target prices for shares of the Ottawa-based e-commerce giant following Wednesday’s post-market release.

“Better than expected results stem from continued market share gains, solid uptake of Payments, Capital and POS, high merchant stickiness following pricing increases, Europe, and cost efficiencies/operating leverage,” said Mr. Treiber in a note released before the bell titled The strong get stronger.

Shopify reported revenue for the quarter of US$1.69-billion, up 31 per cent year-over-year (accelerating from a 25-per-cent increase in the previous quarter) and ahead of the US$1.62-billion estimate of both Mr. Treiber and the Street. Adjusted earnings per share of 14 US cents also topped expectations (6 US cents and 5 US cents, respectively).

For its third quarter, the company now expects revenue to rise in the low-twenty-per-cent range year-over-year, exceeding the consensus forecast at 17 per cent. Its guidance implies adjusted EPS of 14 US cents, also above the Street at 9 US cents.

“Shopify now has the scale to realize operating leverage despite making continued investments in new product innovation (e.g. AI, Audiences, POS),” said Mr. Treiber. “We believe network effects are likely to emerge next, considering new offerings like Shop Pay expanding to non-Shopify merchants, Shop Cash loyalty/rewards, and B2B/Collective (merchant sales of third-party goods). Shopify’s increasing competitive moat improves long-term visibility to sustained market share gains and take rate expansion.”

Touting its growth and profitability, Mr. Treiber raised his target to US$90 from US$85, reiterating an “outperform” recommendation. The average target on the Street is US$65.71, according to Refinitiv data.

“Shopify is one of the most compelling organic growth stories in our coverage,” he said. “While the stock is expensive (at 11 times FTM EV/S [forward 12-month enterprise value to sales), investor visibility to both growth and profitability has improved,” he said. “We expect sentiment to continue to rise as new products are likely accretive to Shopify’s gross margins, while revenue is likely to outpace opex growth.”

Other analysts making target adjustments include:

* Citi’s Tyler Radke to US$77 from US$70 with a “neutral” rating.

“SHOP shares dipped slightly post-market (down approximately 0.6 per cent) despite a solid beat across key metrics in 2Q and stronger-than-anticipated 3Q outlook, which underscores high expectations attached to the stock amid a premium valuation and concerns over a possible recession,” he said. “We remain optimistic on Shopify’s ability to deliver low-20s top-line growth in 3Q (excluding Deliverr) and believe further merchant additions, solid product attach rates and expansion into the enterprise via Shopify+ and Commerce Components will continue to support share gains. While the print was solid, we see SHOP as fairly valued for its current growth/margin profile after the 80-per-cent year-to-date run (vs. 18-per-cent SPY/38-per-cent IGV) and wait for indications of sustained improvement in GMs, further product/take rate catalysts or a material shift in the broad macro/retail environment to turn more constructive.”

* ATB Capital Markets’ Martin Toner to $95 (Canadian) from $90 with an “outperform” rating.

“Shopify is proving that revenue growth is not directly tied to operating expenses, but rather its ability to remain the market leader, and its high-quality business model that is leveraged to merchant success and a growing market,” said Mr. Toner. “We continue to believe that Shopify can grow into what is now a demanding valuation, and remain outperform.”

* Piper Sandler’s Clarke Jeffries to US$58 from US$50 with a “neutral” rating.

“Results continue to defy expectations with 31-per-cent revenue growth (Deliverr: 3pts), 17-per-cent GMV growth, & 9-per-cent operating margins in Q2,” he said. “The standout metric for us was GMV; 17-per-cent growth at $220-billion scale - significantly outpacing market growth. Commentary points to this as driven roughly equally from merchant growth & improvement in same-store sales. Reflecting on this year’s 75-per-cent move, Shopify is assuredly an ecommerce juggernaut with multiple levers to support growth & one of the largest market opportunities in software. However, we believe shares fully reflect the rosy potential for SHOP: revenue more than doubling to $13-billion-plus, FCF margins reaching a mid-20s level, GMV surpassing $400-billion on an annualized basis - all within 5 years.”

* Roth’s Darren Aftahi to US$76 from US$73 with a “buy” rating.

“While the reacceleration in growth may be a one-quarter scenario, SHOP still maintains its position as the best-growing company in the space (especially when considering SHOP could do $7-billion-plus in revenue in 2023), but now with a leaner operating structure that should generate significant FCF (3Q FCF exceeding all of 1H23 of $180-million),” said Mr. Aftahi. “The stock commands a premium multiple in our opinion, and we reiterate our Buy rating and raise our PT to $76 (from $73). Our thesis is backed by our view we continue to see greenfield opportunities for expansion internationally and across retail, POS, and B2B (which represents a new untapped market and grew 61-per-cent GMV growth year-over-year in 1H23), all while starting to generate meaningful operating income and FCF.”

* TD Securities’ Daniel Chan to US$70 from US$60 with a “hold” rating.

* Credit Suisse’s Timothy Chiodo to US$62 from US$55 with a “neutral” rating.

* SVB MoffettNathanson’s Michael Morton to US$79 from US$76 with a “buy” rating.

* D.A. Davidson’s Gil Luria to US$72 from US$67 with a “buy” rating.

* Evercore ISI’s Mark Mahaney to US$74 from US$69 with an “in line” rating.

* Baird’s Colin Sebastian to US$70 from US$65 with an “outperform” rating.

* BoA Global Research’s Brad Sills to US$75 from US$70 with an “underperform” rating.

* Barclays’ Trevor Young to US$53 from US$50 with an “equalweight” rating.


Following Wednesday’s release of in-line second-quarter results and a reiteration of its full-year outlook, RBC Dominion Securities analyst Drew McReynolds downgraded Thomson Reuters Corp. (TRI-N, TRI-T) to “sector perform” from “outperform” in response to its share price appreciation of 19.9 per cent thus far in 2023 and “looking for more attractive and/or timely entry points.”

“At current valuation levels (FTM [forward 12-month] EV/EBITDA of 23.2 times), our focus looking forward is three-fold: (i) the ability to generate organic revenue growth in excess of 6 per cent on a sustained basis; (ii) improved visibility on the impact of accelerated AI adoption on the company’s growth and risk profile, including TAM [total addressable market] expansion, organic revenue growth, margins, capex intensity and competitive positioning; and (iii) the extent to which macro uncertainty ultimately translates to a slower net sales environment in H2/23 and into 2024,” he said.

“Despite what we believe is a higher degree of valuation risk following the run-up in the shares, Thomson Reuters remains a highquality, core holding in our coverage universe in our view reflecting an exceptionally resilient asset mix, an attractive capital return program comprising 8-12-per-cent annual dividend growth, share repurchases and potential periodic returns of capital, and high-single-digit/low-double digit annual NAV growth with both growth and defensive attributes that could underpin average annual total returns of 10-15 per cent over the long-term.”

Mr. McReynolds was one of three equity analysts on the Street to downgrade the Toronto-based news and information provider, which he now sees shifting to a new phase in its business cycle, calling it “Thomson 4.0.”

“In hindsight, the divestiture of F&R to Blackstone in 2018 kicked off what became a multi-year period of double-digit returns for shareholders bolstered by a higher-growth asset mix, the transition to an operating company, improved execution and healthy capital returns,” he said. “Thomson Reuters appears to be delivering on the bull case that we outlined in our August 19, 2020 RBC FusionTM report entitled Sizing up Thomson 3.0″.

“Thomson 4.0: Looking to better size the GAI [generative artificial intelligence] upside. With proprietary datasets, a more agile operating company structure with upgraded talent and technology and US$10-billion in excess capital to reinvest organically or through tuck-in acquisitions, we believe Thomson Reuters is well positioned to execute on GAI integration and monetization. Having said this, visibility on the incremental financial impacts of accelerated AI adoption (including GAI) remain somewhat limited, and thus over the next 6-12 months we endeavor to better size the GAI upside.”

After tweaks to his financial projections, Mr. McReynolds raised his target for Thomson Reuters shares to US$139 from US$135. The average target is currently US$137.48.

Elsewhere, other analysts making rating changes are:

* CIBC World Markets’ Scott Fletcher to “neutral” from “outperformer” with an unchanged US$140 target.

“Strong share price performance year-to-date has reduced the return to our price target,” said Mr. Fletcher. “Our downgrade is not a result of a change in view on TRI’s strategy or concerns around the impact of generative AI on the business, and we continue to believe that TRI remains a high-quality, defensive business with a solid management team. We are positive on TRI’s build/partner/buy AI strategy, although meaningful revenue contribution from the technology is not likely until the back half of 2024 and we expect some level of margin dilution in 2024 once Casetext is added to our model and TRI invests to best position itself. At 21.5x our 2024 EBITDA estimate, TRI shares are now trading in line with the average peer multiple and we prefer to wait for a more attractive entry point rather than bank on additional multiple expansion. Our price target of $140 remains unchanged, with limited changes to our 2024 estimates.”

* National Bank Financial’s Adam Shine to “sector perform” from “outperform” based on limited return to his target, which he raised to $194 (Canadian) from $184.

“TRI moved above our target which we increased as we pushed out our valuation six months to base it on 2025 estimated NAV,” said Mr. Shine “We do so several months earlier than usual. It remains to be seen if growth can accelerate faster than our forecast, but we’re reluctant to expand our multiples further at this time.”

Other analysts making target adjustments include:

* Scotia Capital’s Maher Yaghi to US$145 from US$138 with a “sector perform” rating.

“TRI’s management has done a tremendous job delivering significant margin accretion over the last 3 years and investors have benefited in the process,” said Mr. Yaghi. “We think the storyline is slowly shifting away from ever higher margins to investments to achieve higher revenue growth. We believe management’s decision to heavily invest in AI is the right long term strategy, however we wonder how quickly those investments will flow into faster revenue growth. Execution will be key. We have increased the multiple we apply to value TRI from 22x to 24 times 2024E EBITDA, a multiple that is now at the top end of its comps universe. Current valuations leave little room for us to upgrade our recommendation at this time.”

* Credit Suisse’s Kevin McVeigh to US$150 from US$145 with an “outperform” rating.

“The TRI stock is outperforming the broader market on what we consider a quarter around execution reinforcing the structural change in the business — supporting a structural change in multiple,” said Mr. McVeigh. “2023 guide was largely unchanged despite softening trends in Corporate segment. That said, we see focus on progress around generative AI — $100-million-plus annual investment, Microsoft partnership, $650-million Casetext acquisition — could help normalize margins in H223 and drive long-term growth [pricing, retention, access to new spends]. Q2 results also underscore the durability of TRI’s growth algorithm [retention rate up 30bps to 91 per cent plus, 87-per-cent recurring revenue]. With the highest probability of outcome across the sector we believe the TRI stock offers attractive risk/reward even in macro uncertainty given 2023 value unlocking of its current 31.9 million shares of LSE stake clouding current multiple.”

* TD Securities’ Vince Valentini to $190 (Canadian) from $185 with a “hold” rating.

* JP Morgan’s Andrew Steinerman to US$142 from US$135 with a “neutral” rating.

* Barclays’ Manav Patnaik to US$135 from US$125 with an “equalweight” rating.


Seeing its second-quarter operating and financial results as “optimistic” as it rebounds from the impact of the wildfires in Western Canada, National Bank Financial analyst Dan Payne raised his rating for Paramount Resources Ltd. (POU-T) to “outperform” from “sector perform” previously.

“A disrupted period that its assets proved resilient returns through, while guidance has been cleansed, and it remains well positioned to resume momentum through the back half of the year and in to 2024,” he said. “We are upgrading POU to Outperform (from Sector Perform), which subsequent to the disruption of the wildfires (the sole reason for our prior downgrade), is a positive reflection of the restoration of its organic momentum (high proportional capex remaining) and option value to A&D and augmented return of capital. POU is poised for a 31-per-cent return profile (vs. peers 14 per cent) on leverage of negative 0.2 times (vs. peers 0.1 times) while trading at 3.5 times 2024 estimated EV/DACF [enterprise value to debt-adjusted cash flow] (vs. peers 3.9 times).”

Before the bell on Wednesday, the Calgary-based company reported largely in-line quarterly results with total production of 88,243 barrels of oil equivalent per day narrowly missing Mr. Payne’s 89,000 boe/d estimate as volumes saw a 12-per-cent drop due to the wildfires in Alberta. Diluted cash flow per share of $1.21 topped both the analyst’s $1.17 estimate and the consensus projection of $1.15.

“It allocated approximately 20 per cent of its annual budget through the period (with less than 50 per cent spent to date, with outsized momentum to be realized through its organic program through the duration), which underpinned an 80-per-cent payout ratio, which net of its 5-per-cent cash dividend (unchanged), saw its balance sheet exit the period in an extremely strong position (commentary on the management call suggests that it remains highly attuned to the A&D market and option value should be expected to accrue there over the long term),” said Mr. Payne.

“With prior disruptions relating from wildfires to third-party infrastructure and its program, the company has cleansed its H2/23 guidance, with an unchanged capex program to support production of 100 mboe/d (down 6 per cent), or 3-per-cent annual growth under an 80-per-cent payout ratio. As its free cash flow profile builds, the emphasis within the outlook, per management commentary, in addition to organic value growth, that outlook should include tactical A&D and augmented return of capital (with a bias towards special dividends noted).”

Mr. Payne maintained a target price of $40 for Paramount shares. The average on the Street is $38.25.

Elsewhere, RBC’s Michael Harvey raised his target to $37 from $35 with a “sector perform” recommendation.

“Q2/23 results were slightly ahead of expectations with the 2023 outlook trimmed (as expected) on wildfires; 2024 guidance maintained. Aside from wildfire impacts, operations appear to be in good shape with assets performing well. The bigger story in our minds is POU’s use of its available capital; the company is now essentially debt free and with substantial liquidity would likely have no issue executing a transaction of meaningful ($1-billion-plus) size (if it met stringent financial/ operational hurdles), or alternatively increasing buybacks/dividends (reflected in our base case),” said Mr. Harvey.


While its second-quarter results came in “soft,” iA Capital Markets analyst Naji Baydoun thinks Capital Power Corp.’s (CPX-T) growth initiatives “remain on track” and sees a “healthy” outlook, leading him to raise his recommendation to “buy” from “hold” in response to recent share price depreciation.

On Tuesday before the bell, the Edmonton-based company reported quarterly EBITDA of $327-million and adjusted funds from operations per share of $1.29. Both fell short of Mr. Baydoun’s estimates ($345-million and $1.63 cents) and the consensus projections on the Street ($350-million and $1.58). The misses were attributed to “weak wind resources and lower generation and availability due to outages at Genesee and Clover Bar during a period of higher power prices in the quarter.”

“Despite Q2/23 results and the previously disclosed delays to the Genesee repowering project schedule, management reiterated that CPX is trending above the midpoint of its 2023 financial guidance ranges for both EBITDA and AFFO of $805-865-million,” he said. “CPX also announced a 6-per-cent dividend increase (as expected).

“CPX’s ongoing organic growth projects remain largely on track; alongside the Q2/23 results, the Company announced that it had cancelled the addition of ~210MW of battery storage at Genesee (no longer required to operate the units at their baseload capacity), which removes $195-million of incremental capex that was previously associated with the Genesee repowering project. Management reiterated strong expected returns for the project as the removal of the storage solution helps offset the previously disclosed project cost increases.”

Seeing a “healthy project pipeline,” Mr. Baydoun maintained a $51 target for Capital Power shares. The average on the Street is $50.15.

“CPX offers investors (1) a mix of contracted and merchant cash flows, (2) long-term leverage to the Alberta power market, (3) some growth (low single-digit FCF/share growth through 2027), (4) an attractive income profile (6-per-cent yield, 6 per cent per year dividend growth through 2025, with an 45-55-per-cent payout), and (5) a discounted relative valuation versus IPP peers,” he said. “Despite CPX’s elevated exposure to thermal assets and its lower contracted cash flow profile, the Company’s continued success on new projects and contract extensions has helped it exceed its growth targets and could potentially support an improved growth profile. We are encouraged by CPX’s success in executing on its growth initiatives and the continued near-term strength in the Alberta power market (estimates updated to reflect higher pricing); even if we continue to see limited long-term valuation multiple expansion potential at this time, the recent share price pullback has made relative valuation particularly attractive. Overall, we now see a better entry point into CPX and are upgrading the shares.”

Elsewhere, others making changes include:

* CIBC’s Mark Jarvi to $47 from $49 with a “neutral” rating.

“Softer Q2 results temper the 2023 outlook, but CPX is still well positioned to hit guidance targets (tracking above the midpoints). Further, while the Genesee repowering and CCS projects have had some delays/challenges, commissioning/FID are in sight and returns remain attractive in terms ofpotential. CPX continues to focus on development, selective M&A and has options on funding (DRIP helps),” said Mr. Jarvi.

* ATB Capital Markets’ Nate Heywood to $47 from $46 with a “sector perform” rating.

“In the near-term, we expect Capital Power to continue investing heavily in growth initiatives, with a significant focus on the Genesee 1 & 2 repowering, accompanied by recent efforts on carbon capture and renewable projects in both Canada and the U.S.; however, we remain cognizant of recent inflationary cost pressures,” said Mr. Heywood. “Additionally, management has demonstrated its appetite for natural gas generation M&A with the recent Midland Cogen acquisition, an example of acquiring midlife assets with attractive contracting profiles. The Company distributes an attractive dividend yield of 6.1 per cent, supported by a modest 2024 payout ratio of 41 per cent (below the 45-55-per-cent target range), and is targeting 6-per-cent annual dividend growth through 2025. With a 2024 estimated EV/EBITDA of 6.3 times, we note that Capital Power is trading at a discount to the peer average of 10 times, although we attribute the discount to its exposure to thermal generation – a business line that may continue to see future investment; however, CCS investment could offer modest discount relief.”

* BMO’s Ben Pham to $46 from $47 with a “market perform” rating.

“CPX shares have underperformed peers this year (down 14 per cent vs. utility index down 1 per cent) largely due to capital cost inflation at Gen 1&2 (up 6 per cent), inability to capture the strong Alberta power market environment (hedges, unplanned outages), and funding concerns,” said Mr. Pham. “We believe the reinstatement of the DRIP and opportunity for partnerships partly relieves the nearterm equity overhang; however, capex inflation still persists (ie. 26-per-cent increase to Halkirk 2 newly disclosed and likely increase to the carbon capture project if sanctioned).”

* Scotia’s Robert Hope to $50 from $52 with a “sector perform” rating.

* TD Securities’ John Mould to $51 from $52 with a “buy” rating.


Touting RioCan Real Estate Investment Trust’s (REI.UN-T) “improving fundamental backdrop, strong capital allocation and peer-leading exposure to the multi-family asset class,” Desjardins Securities analyst Lorne Kalmar thinks a “valuation discount persists despite solid execution.”

“The REIT continues to trade at a discount to both its closest peers and relative to its long-term average, which we view as unwarranted,” said Mr. Kalmar in a note titled What a deal!.

After the bell on Tuesday, the Toronto-based REIT reported second-quarter financial results that largely fell in-line with expectations. Mr. Kalmar called it “another solid” performance, pointing to its “high-single-digit blended rent growth, 5.2-per-cent SPNOI [same property net operating income] growth, a major development milestone and continued execution of its capital recycling program.”

“REI estimates the mark to market on its portfolio is approximately 20 per cent plus, although several fixed renewals will likely keep rent growth in the high single to low double digits,” the analyst said. “That said, market strength has enabled REI to begin negotiating anchor deals (which typically include fixed renewals) with renewal options at market, which should improve SPNOI growth over time. The tenant watch list remains thin, although Lowe’s (1.2 per cent of revenue across seven locations) could augment its footprint post the RONA merger.”

“On the call, management noted that it is unlikely to allocate capital to new construction starts if the current environment persists through 2024. The REIT has $250-million of committed development spend in 2024, well below its five-year target of $500-million per year. Should it elect not to pursue new project starts, management expects to deploy capital toward opportunistic multi-family acquisitions (similar to the Bellevue acquisition, where debt assumed was well below market) and land assemblies in its core markets. The REIT could also elect to use the capital to finance projects in which it would have a ROFO or right to acquire on completion. However, the primary focus would be further debt reduction. We note that while REI may not initiate any new developments over the near term, it will continue to work on advancing as many projects as possible to the “shovel-ready” phase to provide maximum optionality as market conditions begin to improve.”

Maintaining a “buy” recommendation for RioCan units, Mr. Kalmar trimmed his target by $1 to $24.50 after updating his forecast through 2025. The average is $24.33.


In other analyst actions:

* Eight Capital’s Puneet Singh initiated coverage of Karora Resources Inc. (KRR-T) with a “buy” rating and $7 target. The average target on the Steret is $6.52.

“While gold sentiment has been poor, the gold price at current levels (US$1,900/oz) continues to offer miners strong margins,” he said, “KRR is on the cusp of FCF generation after years of higher capex. On the TSX, we highlight how Wesdome (WDO-T, Buy, Target $10.00; Covered by Ralph M. Profiti, CFA), a Canadian gold producer, has recently missed its goals as it ramps up its Kiena mine. On a consolidated basis, WDO is guiding to produce 110-130Koz at US$1,620-1,800/oz AISC [all-in sustaining costs] in 2023. Yet, WDO trades at a higher valuation across the board than KRR, which is guiding to produce 145-160Koz (H1/23 performance trending towards the top end of guidance) at US$1,100-1,250/oz AISC. We think a re-rating will likely occur over the NTM, on the back of KRR’s FCF inflection this year, production growth out to 2024, and simply due to a lower capital intensity business model leveraging existing infrastructure.”

* Mr. Singh also initiated coverage of Osino Resources Corp. (OSI-X) with a “buy” rating and target of $2.60 per share, exceeding the $2.46 average.

“With the Twin Hills feasibility study now complete, Osino is now on the cusp of key milestones,” he said. “Upon receipt of secondary permits (EC est. H2/23), we’d expect the Company to look to procure project financing for Twin Hills. Around the time of permit receipts, a take-out scenario could also develop. Management is well-versed in the country having sold the Ojikoto gold project to B2Gold (which owns an undisclosed position in OSI as well). With technical work being the focus over the last year, in 2023 the Company is re-focusing efforts on exploration. Extensions of known zones and high grade shoots have yet to be fully tested. Osino will drill multiple near-mine targets this year. Additionally, OSI recently bought the Ondundu project (0.9Moz at 1.1g/t; recently returned 109m at 2.3g/t)within trucking distance of Twin Hills. Key risks to our target price and valuation include commodity price risks (gold), development, regulatory, financing,and key management/personnel risks.”

* National Bank’s Rupert Merer trimmed his Altius Renewable Royalties Corp. (ARR-T) target to $10.75, below the $12.71 average, from $11 with an “outperform” rating.

* TD Securities’ Tim James cut his target for Andlauer Healthcare Group Inc. (AND-T) to $56 from $58 with a “buy” rating. Other changes include: CIBC’s Kevin Chiang to $47.50 from $50 with a “neutral” rating, RBC’s Walter Spracklin to $45 from $46 with a “sector perform” rating and Scotia’s Konark Gupta to $48 from $50 with a “sector perform” rating. The average is $53.36.

“AND’s financial results are reflecting the effects of normalization after a period of unsustainably higher revenue and margins during the pandemic. Stocks rarely fare well during periods of normalization—as the AND shares, which had been largely range-bound in the $45-$55 level for the past 2 years, have now come under pressure (down 17 per cent since May). The good news is that Q2 appears to reflect a new normalized run-rate. Attention will likely now turn to M&A and what form that may take. Note we have built M&A into our valuation and therefore see the shares as fully valued,” said Mr. Spracklin.

* Stifel’s Michael Dunn raised his Arc Resources Ltd. (ARX-T) target to $23 from $22 with a “buy” rating, while BMO’s Randy Ollenberger bumped his target to $21 from $20 with a “market perform” rating. The average is $23.19.

* Jefferies’ Young Li bumped the firm’s target for Bausch + Lomb Corp. (BLCO-N, BLCO-T) to US$25 from US$22, topping the US$21.44 average, with a “buy” rating, while Barclays’ Matthew Miksic to US$19 from US$18 with an “equalweight” rating.

* TD Securities’ Cherilyn Radbourne cut her Brookfield Asset Management Ltd. (BAM-N, BAM-T) target to US$47 from US$48 with an “action list buy” recommendation. The average is $36.39.

* TD Securities’ Greg Barnes raised his Cameco Corp. (CCO-T) target to $55 from $51 with an “action list buy” rating. Other changes include: Raymond James’ Brian MacArthur to $52 from $50 with an “outperform” rating and Eight Capital’s Ralph Profiti to $52 from $50 with a “buy” rating. The average is $48.94.

“We believe Cameco provides investors with lower-risk exposure to the uranium market given its diversification of uranium sources,” said Mr. MacArthur. “These sources are supported by a portfolio of long-term contracts that provide some downside protection in periods of depressed spot uranium prices, while maintaining optionality to higher uranium prices. In addition, the company has multiple operations curtailed that can be brought back should uranium prices increase. Although the 2021 tax court decision applies only to the 2003, 2005, and 2006 tax years, we view it as a positive for CCO given we believe it will be relevant in determining the outcome for other years and reduces risk related to the CRA dispute.”

* RBC’s Jimmy Shan increased his target for Colliers International Group Inc. (CIGI-Q, CIGI-T) to US$130 from US$128, remaining above the US$127.96 average, with an “outperform” rating, while Scotia’s Michael Doumet raised his target to US$130 from US$126 with a “sector outperform” rating.

“Colliers reported a good Q2, considering tough CM conditions and peers’ results,” said Mr. Shan. “Geographically, APAC stood out and offset some of the weakness in CM. CIGI also implemented cost control which helped offset margin decline. Importantly, 2023 guidance was maintained, which implies 10-per-cent AEBITDA year-over-year growth and healthy pickup in margin in H2/23E vs H2/22. While our estimate remains 9 per cent below guide, the costcutting initiatives and the possibility of new funds in IM to close by Q4 provide potential upside to our estimates.”

* BMO’s Étienne Ricard raised his EQB Inc. (EQB-T) target to $97 from $93 with an “outperform” rating. Other changes include: Scotia’s Meny Grauman to $100 from $89 with a “sector outperform” rating and KBW’s Mike Rizvanovic to $101 from $93 also with an “outperform” recommendation. The average is $95.63.

“Despite a tough day in the market, we believe that EQB’s Q2 result highlights the resiliency of the Canadian economy, but is also reflective of the company’s own unique growth drivers including better-than-expected synergies from the Concentra acquisition,” said Mr. Grauman. “The bottom line is that we view this quarter’s big beat as sustainable. Yet while our forward estimates and valuation multiple head higher, our new price target is still based on a very conservative outlook for both. Put it all together and despite the fact that EQB is (by far) the best performing name in our entire coverage universe so far this year, we believe that it still has significant upside even in this still uncertain economic environment.”

* RBC’s Pammi Bir trimmed his First Capital REIT (FCR.UN-T) target to $19 from $20 with an “outperform” rating. Other changes include: Scotia’s Mario Saric to $18 from $19 with a “sector perform” rating and Desjardins Securities’ Lorne Kalmar to $18.50 from $19 with a “buy” rating. The average is $18.31.

“Amid concerns of a decelerating economy, we expect FCR to continue putting up healthy organic growth, backstopped by its defensive, urban concentrated assets and a tight retail backdrop. As well, progress on the portfolio optimization plan is encouraging, as management’s ability to monetize value created in challenging conditions should ease investor concerns on execution risks. Given a healthy growth profile and steeply discounted valuation, we maintain our Outperform rating,” said Mr. Bir.

* BMO raised its First National Financial Corp. (FN-T) target to $43 from $39 with a “market perform” rating. Others making changes include: BMO’s Étienne Ricard to $43 from $39 with a “market perform” rating and TD Securities’ Graham Ryding to $42 from $39 with a “hold” rating. The average is $42.33.

* Raymond James’ David Quezada cut his Fortis Inc. (FTS-T) target to $62 from $65 with an “outperform” rating. Other changes include: TD Securities’ Linda Ezergailis to $63 from $65 with a “buy” rating, BMO’s Ben Pham to $59 from $60 with a “market perform” rating and BoA Global Research’s Dariusz Lozny to $51 from $53 with an “underperform” rating. The average is $60.11.

“Central to our constructive view on Fortis are the company’s diversified NA footprint, solid 6-per-cent rate base growth and several meaningful growth opportunities that could represent upside to the current capital plan,” said Mr. Quezada. “We are reducing our target with a lower assumed 20.0 times 2024 P/E multiple consistent with multiple contraction among peers.”

* TD Securities’ Tim James lowered his target for GFL Environmental Inc. (GFL-T) to $58 from $59, above the $50.17 average, with a “buy” rating.

* RBC’s Greg Pardy increased his target for Imperial Oil Ltd. (IMO-T) to $77 from $75 with a “sector perform” rating. The average is $78.41.

“Our constructive stance towards Imperial Oil reflects its long life-low decline upstream portfolio, cash flow diversification via its refining and chemical segments, strong balance sheet, free cash flow generation, abundant shareholder returns and solid operating performance in recent years,” said Mr. Pardy.

* Raymond James’ Brad Sturges cut his InterRent REIT (IIP.UN-T) target to $16.50 from $17 with a “strong buy” rating, while Scotia’s Mario Saric trimmed his target to $15.50 from $15.75 with a “sector outperform” rating. The average is $15.23.

* RBC’s Geoffrey Kwan increased his target for Intact Financial Corp. (IFC-T) to $230 from $228 with an “outperform” rating. The average is $218.93.

“Although Q2/23 results were largely in line with our forecast, we think results in Personal Auto provided stronger evidence that Intact can achieve a sub-95-per-cent combined ratio, an encouraging sign given we think there is some investor concern about Personal Auto given financial results and commentary from certain U.S. & U.K. auto writers. Overall, we think IFC continues to deliver solid financial results and we still view IFC as a core holding, reflecting positive fundamentals; potential catalyst(s); defensive attributes; and a reasonable valuation,” said Mr. Kwan.

* Scotia’s Orest Wowkodaw trimmed his Labrador Iron Ore Royalty Corp. (LIF-T) by $1 to $32 with a “sector perform” rating. The average is $34.33.

* BMO’s Tamy Chen lowered her Metro Inc. (MRU-T) target to $77 from $82 with a “market perform” rating. The average is $78.78.

“Following Loblaw’s results, we have trimmed our MRU FQ3/23 estimates for food SSS and gross margin (GM), but modestly reduced our opex,” she said.

* RBC’s Tom Callaghan cut his Slate Office REIT (SOT.UN-T) target to $1.75 from $2.75, keeping a “sector perform” rating. The average is $2.31.

“Slate Office’s Q2 results fell below expectations amid impacts from higher G&A and interest expense. Against broad-based office market headwinds, including the cost/availability of credit, the focus for the REIT remains on driving improved occupancy via leasing and preserving balance sheet liquidity amid the uncertain environment,” said Mr. Callaghan.

* Stephens’ Jack Atkins raised his TFI International Inc. (TFII-N, TFII-T) target to US$165 from US$145 with an “overweight” rating. The average is US$144.43.

* Stifel’s Michael Dunn raised his Tourmaline Oil Corp. (TOU-T) target to $77 from $75, remaining below the $80.20 average, with a “buy” rating. Other changes include:

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