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

National Bank Financial analyst Zachary Evershed raised his rating for Boyd Group Services Inc. (BYD-T) to “outperform” from “sector perform” following Wednesday’s release of mixed fourth-quarter financial results, citing “continued success in labour rate negotiations, fading headwinds to aftermarket part availability at preferred vendors and prospects for improving mix as the operating environment normalizes.”

Shares of the Winnipeg-based automotive repair centre operator were narrowly higher following the premarket release, which featured a profitability miss partially offset by top-line performance.

Revenues rose 23.4 per cent year-over-year to $637.1-million, beating both Mr. Evershed’s $624.3-million estimate and the consensus forecast on the Street of $621.7-million. However, adjusted EBITDA of $74.7-million was below the expectations ($79.5-million and $75.1-million, respectively), despite rising 30.4 per cent from the same period a year earlier. That led to weaker-than-anticipated adjusted earnings per share of 68 cents (versus 80-cent projections).

“Management highlights Q1/23 SSSG [same-store sales growth] thus far trending in line with recent quarters, prompting us to increase our forecast to 21 per cent from 18 per cent,” the analyst said. “The company faces robust comps through the rest of the year, but as pricing momentum shows no signs of slowing, we model approximately 6-per-cent organic growth after Q1. We note that falling used car pricing will help a rebound in total loss rates, which should improve Boyd’s mix of parts vs. labour as it can address additional lighter hit, drivable vehicles in its backlog. This should ultimately provide a profitability lift as gross margins on labour are roughly double that of parts.”

Alongside that bullish view of market conditions, Mr. Evershed also expects an acceleration in Boyd’s M&A activity.

“With 40 locations added in 2022 and robust same-store sales growth of 19.8 per cent, management remains confident in BYD’s long-term objective of doubling the size of the business on a 2019 base by 2025,” he said. “Though M&A took a backseat during 2022 as management focused on the core business by addressing labour rates and shortages, we anticipate the pace of acquisitions will continue to tick up from the 17 locations added year-to-date. We forecast 92 new locations in 2023e (was 95) and maintain our 100-location assumption in 2024. As management indicates the focus will primarily be on single-shop acquisitions, we believe there is potential upside to our forecasts should the company execute on MSOs and note competition for larger targets may dwindle as higher interest rates weigh on primarily PE-backed competitors. We calculate leverage of 3.5 times as at Q4/22, which we see declining to 2.7 times and 2.5 times exiting 2023 and 2024, respectively, even as the pace of M&A ramps up.”

Raising his sales and earnings expectations for both 2023 and 2024, Mr. Evershed bumped his target for Boyd shares to $250 from $220. The average target on the Street is $239.92, according to Refinitiv data.

“Though the 2024 FCF yield after interest and lease payments is tight at 5.7 per cent, we are comfortable ascribing a premium to Boyd due to the counterbalancing effect of its safer risk profile, especially with recession-resilient demand for collision repair services, complemented by potential upside to our growth expectations,” he concluded.

Conversely, Scotia Capital’s Michael Doumet downgraded Boyd to “sector perform” from “sector outperform” with a target of $230, up from $225, in a research note titled Taking Pause.

“BYD was our top pick in 2022 as we looked for an opportunity for its trading multiple to normalize as the market priced-in a margin recovery,” said Mr. Doumet. “From its lows, BYD’s multiple expanded from 10 times EV/EBITDA on our 2023E to 12 times. We think the margin recovery remains front and center to the story and the largest source of potential upside in the shares – but, believe the shares have already priced-in 100 basis points to 200bp of that expansion beyond 4Q22 that has yet to materialize.

“While we expect a continued margin recovery (we model an increased of 50 basis points quarter-over-quarter in 1Q23), we are less optimistic in BYD’s ability to raise margins back to pre-pandemic levels through our forecast horizon. With BYD shares reflecting a 5.8-per-cent FCF yield on our 2024 estimates (which assumes a 13.0-per-cent EBITDA margin vs. 11.2 per cent in 2022), we believe more meaningful upside to the shares may only catalyze upon a more notable positive margin surprise (which may be several quarters away). As such, we are moving to the sidelines, until we have better visibility on greater margin expansion and/or as BYD backfills EBITDA (and its valuation) with accretive M&A.”

Elsewhere, BMO’s Tamy Chen initiated coverage with an “outperform” rating, calling it “a rebound story after reent turbulent years.”

“We view Boyd as a solid operator that experienced significant headwinds in wage inflation and parts shortages as a result of the pandemic. We believe these challenges will normalize going forward, and we see significant runway for new unit expansion,” she said. “Yet, valuation is towards the lower end of historical range. We believe this presents a good entry point in a stock that we expect will compound over time.”

Ms. Chen set a target of $240 per share.

Others making target changes include:

* ATB Capital Markets’ Chris Murray to $265 from $255 with an “outperform” rating.

“Organic growth was very strong and is expected to stay at a similar level in Q1/23,” said Mr. Murray. “Ongoing discussions with insurance partners and gradually moderating supply-side pressures are expected to contribute to a more normalized margin profile in 2023 as labour and parts become more available while price increases catch up to prior cost inflation. Management was upbeat on the Company’s outlook for store count growth in 2023 and reaffirmed its 2025 targets. We continue to see Boyd as undervalued against peers and historical trading patterns, and we remain constructive on a best-in-class compounder.”

* RBC’s Sabahat Kwan to $250 from $227 with an “outperform” rating.

“We are revising our forecasts to reflect commentary on quarter-to-date SSS trends and store openings. Through 2023, we will be looking for progress on margins, which we believe should continue to revert toward historical levels over the medium-term,” he said.

* CIBC World Markets’ Krista Friesen to $221 from $225 with a “neutral” rating.

“BYD capped off a solid 2022 with impressive revenue growth. This has put BYD in a good position entering 2023 to achieve its 2025 revenue targets. While we have little concern on BYD’s ability to grow its revenue, we remain cautious on the company’s ability to return its margins to historical norms. We see the main headwinds for margins being the supply chain, wage pressures, and mix, and we believe it will be difficult for BYD to address all three of these points over our forecast period,” said Ms. Friesen.


Desjardins Securities analyst Gary Ho thinks the 11.2-per-cent drop in share price endured by AGF Management Ltd. (AGF.B-T) following Wednesday’s release of “mixed” quarterly results was “an over-reaction to the timing of SG&A and lumpy returns from private alt seed capital” and now sees a buying opportunity for investors.

He called its dividend, which was raised by 10 per cent to 11 cents per quarter, a “differentiator versus peers.”

“We foresee a few near- or medium-term positive catalysts: (1) retail net flows trending at or above industry; (2) redeployment of capital for organic growth, to seed new private alt strategies and for share buybacks; (3) growth in fees/earnings from its private alt platform; and (4) DSC ban benefiting FCF and EPS,” he said.

Before the bell, the Toronto-based firm reported earnings per share of 26 cents, below both Mr. Ho’s 29-cent estimate and the consensus forecast of 31 cents. Wealth Management EBITDA of $20.2-million, adjusted for severance, also missed the analyst’s projection ($21-million).

Mr. Ho attributed the miss to “seasonally higher SG&A (not a huge concern), offset by solid fund performance and robust net inflows.”

“SG&A of $52.8-million (excluding $0.2-million in severance) compares with our $52-million estimate — the miss was attributable to a higher government employee benefit expense of $2-million (timing), performance/sales-based costs (variable) and stock-based comp (influence by high AGF share price),” he said. “While management maintained its FY23 guidance of $202-million, we conservatively raised our estimate to $204-million.”

Cutting his 2023 and 2024 earnings per share estimates to $1.16 and $1.25, respectively, from $1.25 and $1.30, Mr. Ho trimmed his target for AGF shares to $10.25 from $10.50 with a “buy” rating. The average target on the Street is $9.29.

Elsewhere, others making changes include:

* Scotia’s Phil Hardie to $9.25 from $9.50. with a “sector perform” rating.

“AGF’s Q1/23 EPS came in 16 per cent below Street expectations largely driven by higher-than-forecasted SG&A and slightly lower-than-anticipated investment income,” said Mr. Hardie. “We think the 10-per-cent stock sell-off is an overreaction given that management reiterated its expense guidance. The team noted that elevated expense in the quarter reflected seasonality and was also influenced by a combination of higher incentive and stock-based compensation.

“Looking beyond the financial results, we believe underlying operating momentum remained strong. AGF delivered its 10th consecutive quarter of positive mutual fund flows despite a challenging backdrop characterized by industry-wide redemptions.

* RBC’s Geoffrey Kwan to $9 from $9.50 with a “sector perform” rating.

“Q1/23 EPS was below our forecast and consensus with retail net sales marginally below our forecast,” said Mr. Kwan. “The EPS shortfall to our forecast was due to higher-than-forecast SG&A expense (partly due to seasonality); lower-than-forecast investment income; and a higher share count. Overall, retail net sales performance remains strong and overall investment performance has been good vs. peers based on 1-year quartiles. Bigger picture, we still remain slightly cautious on the asset/wealth management sector with recent market volatility potentially constraining sector valuations in the short-term. While we maintain our Sector Perform rating, we lower our target to $9 (was $9.50) primarily due to a higher share count (options exercised) as our earnings forecasts are only marginally reduced.”

* BMO’s Tom MacKinnon to $8.50 from $9.50. with a “market perform” rating.

“While AGF’s retail gross sales and net flows have improved, its $43-billion AUM lacks scale in a business that increasingly demands significantly more scale, especially given fee pressures,” said Mr. MacKinnon. “With yet to be seen significant growth in private alternatives, a potential differentiator, AGF remains a show-me story. As well, given lack of scale, cost control remains key to earnings growth.”

* CIBC’s Nik Priebe to $9 from $9.25 with a “neutral” rating.


RBC Dominion Securities analyst Geoffrey Kwan thinks investors are not properly valuing Brookfield Corp.’s (BN-N, BN-T) real estate investments, seeing them as “overly discounted” and leading him to call its shares “mispriced.”

“Our BN note is inspired by the Saturday Night Live Weekend Update skit “Really!?! With Seth & Amy”,” he said. “We’ve been asked by investors recently what our thoughts are on BN’s 37-per-cent discount to NAV, as it’s substantially wider-than-historical and hasn’t been this wide in over a decade. We think one reason is investor uncertainty regarding the value of BN’s Real Estate investments given higher interest/cap rates and pandemic effects (e.g., work-from-home). However, we think these concerns have existed for several quarters, yet even as recently as November 2022, BN’s discount to NAV was less than 10 per cent, which makes the current 37-per-cent discount a bit perplexing.”

Maintaining an “outperform” rating for Brookfield’s U.S.-listed shares, Mr. Kwan trimmed his target to US$51 from US$54, citing market declines since his last update. The average is US$46.70.

“We think the combination of: (1) BN’s strong long-term investment track record; (2) significant liquidity available (US$124-billion) to fund acquisitions and investments at potentially attractive prices in the current market environment and drive future NAV growth; and (3) controlling interest in a differentiated and diversified alternative asset management business with a broad product shelf and demonstrated ability to fundraise, which we think drive scale benefits and result in double-digit NAV growth over time,” he said. “We continue to view the stock as a core holding.”


While he maintained a positive long-term view on K-Bro Linen Inc. (KBL-T) and sees diesel prices as a tailwind moving forward, Raymond James analyst Michael Glen lowered his recommendation for its shares to “outperform” from “strong buy” in response to management’s guidance.

“K-Bro 4Q results were below our forecast as the company has continued to face headwinds associated with the timing of price increases (typically associated with CPI clauses) and ongoing cost inflation (i.e. labour, utilities, diesel),” he said. “Looking into 2023, K-Bro is guiding towards a strong rebound in margins during 2H23, with a return to pre-COVID levels (i.e. 19 per cent). ... The primary sources of potential rebound are embedded in the utilities line (i.e. natural gas) and transportation line (related to diesel price). On the transportation line specifically, we [see] the very high correlation between this cost bucket and the average diesel cost in the quarter ... We highlight this as it would appear this starts to become a very meaningful tailwind beginning in 2Q23 (i.e. diesel price has now moved meaningfully lower). While this is potentially a favourable outcome, the challenge from our side is predictability; we are not equipped to try and forecast where diesel costs, or for that matter natural gas or labour/wages will ultimately come in over the course of a quarter or for the year.

“That said, we have made adjustments to our model to more accurately reflect management guidance. We are now forecasting a 1H23 EBITDA margin of 13.4 per cent (vs. 17.7 per cent previously), with a step higher to 18.1 per cent (vs. 19.2 per cent previously) in 2H23. As we understand it, K-Bro is anticipating that the impact of price increases coupled with moderation on costs will begin to have a notable impact on margins in 2H. Putting everything together, and relative to our own expectations, we acknowledge the margin recovery story has taken much longer to materialize than we initially expected, but it does appear there are some good reasons to start thinking about tailwinds to the inflation situation (i.e. most notable is the diesel price).”

With that view, Mr. Glen lowered his target for the Mississauga-based company’s shares to $37.50 from $47.00 previously. The average is $38.71.

“Despite this reduction, we continue to believe the underlying business fundamentals for KBL’s operations are strong, and remain confident that in purchasing KBL stock at this level, a moderately patient investor could generate an attractive all-in return over the coming year (i.e., dividend + capital return),” he emphasized.

Elsewhere, TD Securities’ Derek Lessard cut his target to $37 from $42 with a “buy” rating.

“Although the shares could remain volatile in the near term owing to labour and inflationary pressure, we believe that the risk/ reward trade-off remains compelling at the current valuation,” said Mr. Lessard.


Despite releasing fourth-quarter results that fell in line with its preliminary guidance, Dialogue Health Technologies Inc. (CARE-T) was downgraded by Paradigm Capital analyst Daniel Rosenberg to “hold” from “buy” previously, seeing a limited potential return to his revised target for its shares.

“Recall, this quarter saw the sale of the German OHS (Occupational Health & Safety) asset,” he said. “The sale was supportive of improving consolidated profitability. Management reiterated that it is on track to achieve its goal of breakeven adjusted EBITDA by the end of 2023. KPIs continue to trend positively with the company signing several large clients in the quarter. Dialogue’s leading platform has a long runway of growth as the market increasingly adopts technology into EAP offerings. As CARE approaches profitability we could see shares rerate.”

His target increased to $4.30 from $4. The average is $4.92.

“Dialogue helps organizations better the health & wellbeing of employees and their families by optimizing care delivery and improving access through technology,” he said. “We believe the company is well positioned as a leading solution within the employee benefits & wellness space. Strong organic growth, combined with operating leverage will lead to improved profitability next year. The company’s strong KPIs, robust balance sheet, and attractive valuation make it a compelling investment in the current market environment. We believe Dialogue can generate outsized investment returns as it executes on its strategy.”

Others making changes include:

* TD Securities’ David Kwan to $4 from $3.25 with a “hold” rating.

“Given the strong start to the year, with the stock up more than 50 per cent year-to-date, we believe that despite the better-than-expected gross margin and Adjusted EBITDA guidance and the significant progress in getting closer to breakeven, the share price may underperform in the near term, given the more cautious revenue growth outlook implied by the Q1/F23 guidance that was below expectations,” said Mr. Kwan.

* CIBC’s Scott Fletcher to $4 from $3.50 with a “neutral” rating.

“Dialogue’s Q4 results were in line with pre-released numbers, as it continues to make solid strides towards its target of profitability by the end of Q4,” he said. “Organic ARR growth of 44 per cent in the digital businesses (80 per cent of total ARR) is encouraging and supports continued organic digital revenue growth in the high-30% to low-40-per-cent range. Looking forward into 2023, the core digital businesses will be the focus, as the slower-than-expected growth post-IPO has mostly been a result of weakness in OHS and in-person Optima EAP. Dialogue will look to take advantage of an opening in the competitive window as competitors integrate acquisitions and smaller businesses. M&A looks to be on the horizon as Dialogue approaches breakeven with excess cash remaining from IPO proceeds, despite the underperformance of some of the previous acquisitions. We don’t see any particular takeaways from Q4 to change our Neutral thesis.”


Expecting double-digit increases to production and its free cash flow yield in the next year, ATB Capital Markets’ Amir Arif initiated coverage of Hammerhead Energy Inc. (HHRS-T) with an “outperform” recommendation on Thursday, seeing “meaning growth potential on the horizon utilizing infrastructure capacity.”

He’s the first equity analyst on the Street to cover the growth-oriented Calgary-based company after its market debut on Feb. 27 following the completion of its business combination with Decarbonization Plus Acquisition Corporation IV (DCRD-Q).

“The Company will have infrastructure in place by year-end 2023 capable of supporting organic growth to 80-90,000 barrels per day of oil equivalent (boe/d), with minimal infrastructure capital needed to be spent beyond 2023,” he said. “This will allow for both production growth and free cash flow generation in 2024+.

“At the same time, unlike some other E&Ps, we believe that HHRS is comfortable keeping some debt on the balance sheet ($250-$300-million net debt implies a very manageable strip D/CF of 0.5-0.6 times). We expect the debt to be below that level at year-end 2022, which implies that the free cash flow we see coming in 2024+ could be used to implement a return of capital strategy. Even if such a strategy is not firmed up, the excess free cash flow still benefits the equity holders through the reduced net debt. The bottom line is that, with facility spending behind the Company this year, Gold Creek assets being held flat, and growth occurring at North and South Karr (two of the better industry areas for Montney margins and payouts), HHRS is well positioned for the coming few years.”

Mr. Arif said the biggest “drawback” to Hammerhead from an investor perspective is its limited trading liquidity with a float of 5 per cent of shares outstanding. Of the 90.8 million basic shares outstanding, 86 per cent are owned by Riverstone Holdings LLC, 8 per cent by 1901 Parnets Management and almost 1 per cent by its management team.

“[This] could be improved down the road if one of two major shareholders is willing to sell down some of its position,” he said. “In the meantime, we would take advantage of the weakness following its business combination with a Special Purpose Acquisition Company (SPAC) and public listing to accumulate shares.”

Currently the lone analyst on the Street covering the stock, he set a target of $12.

“For investors that have a longer-term time horizon, we believe that there is good visibility for a valuation of $22-$29 per share by 2025 based on a 3.0-4.0 times EV/DACF [enterprise value to debt-adjusted cash flow] multiple based on current 2025 strip pricing of US$64 WTI and $25-$32 per share if 2025 WTI averages US$70,” he said.


Canaccord Genuity analyst Katie Lachapelle sees enCore Energy Corp. (EU-X, EU-N) as “a compelling investment for investors looking for exposure to uranium through a proven producer with near-term production potential in a good jurisdiction.”

That led her to initiate coverage of the Corpus Christi, Tex.-based company, which is owns portfolio of in-situ recovery (ISR) uranium projects in the United States (South Texas, South Dakota, Wyoming, and New Mexico), with a “speculative buy” recommendation on Thursday.

“EU has fully licensed and past-producing ISR projects that could ramp up production in the near term to take advantage of the strong fundamental outlook for the sector (Looking out to 2023),” said the analyst. “The company’s 100-per-cent-owned Rosita project is on track to restart production mid-2023, followed by Alta Mesa early next year. These projects are substantially derisked, require minimal capital investment (more than US$15-million Canaccord Genuity estimate), and should be quicker to market than most U.S. peers. In our view, a successful return to production should instill confidence in fuel buyers and position EU among preferred producers as utilities look to secure future feed for their fleets.”

“Outside of South Texas, EU indicates it has an established pipeline of projects and a phased approach to bring these into production. In the next five years, we expect both Dewey-Burdock and Gas Hills to be built, increasing production from 1.7 million pounds U3O8 per year in 2025 to 5 million pounds by 2028 and generating significant year-over-year increases in free cash flow.”

Ms. Lachapelle sees enCore at “the right place, the right time” as government and utilizes re-evaluate their exposure to Russian-linked uranium supply. Given its one of few domestic producers, she thinks it “well positioned to win significant U.S. business.”

“The high pricing received by enCore and its peers reflects, in our view, the scarcity of U.S. origin material in the current market and the potential premium that Western, lower-risk supply could capture,” she said. “While we acknowledge that there is still a large amount of low-cost supply in the East, Western utilities’ willingness to take this supply has likely changed. This dynamic is already being reflected in the price for downstream conversion and enrichment services, which currently sit near all-time highs.”

Also touting its “attractive” relative valuation, she set a target of $6 per share. The average is $6.20.

“From a relative valuation perspective, enCore currently trades at 0.46 times NAV, an attractive discount to peers at 0.62 times,” said Ms. Lachapelle. “We expect EU’s shares to re-rate higher as the company transitions from developer to producer generating free cash flow. We expect enCore Energy to be among the first U.S.-based uranium miners to make this transition, as it looks to restart production at Rosita this year.”


In a research note titled The Best Defense Is a Good Offense, Stifel analyst Justin Keywood resumed coverage of Andlauer Healthcare Group Inc. (AND-T) with a “buy” recommendation and a Street-high $62 target, exceeding the average of $56.17.

“Andlauer is the market leader for end-to-end supply chain logistics in the Canadian Healthcare sector (more than 30-per-cent share), along with an expanding U.S. business. We see Andlauer as having a solid balance sheet to deploy for M&A (0.6 times net debt/EBITDA, incl. leases), implying +$400mm in capacity, while maintaining a less than 2.5 times leverage ratio. Andlauer’s business is also defensive, where pharmaceutical drugs and medical supplies will continue to be delivered, despite macro headwinds. We believe that market turmoil plays to Andlauer’s advantage, where an offensive strategy in acquiring assets at potentially lower multiples, could lead to greater value. Andlauer has a solid M&A record to support our view, including rising margins/high ROIC, along with de-risked U.S. entry. Andlauer has a pipeline of 30+ targets (3-7 in advance stages) and setting up for a share price re-rating. Our $62.00 target reflects M&A potential, solid organic growth, and barriers to entry in serving valuable customers.”


In other analyst actions:

* In response to “another disappointing quarter,” CIBC World Markets’ Nik Priebe downgraded ECN Capital Corp. (ECN-T) to “neutral” from “outperformer” and cut his target to $2.75 from $5. Others making changes include: Raymond James’ Stephen Boland to $4 from $5.50 with an “outperform” rating, National Bank’s Jaeme Gloyn to $4.50 from $5 with an “outperform” rating, TD Securities’ Mario Mendonca to $5.50 from $7 with a “buy” rating and RBC’s Geoffrey Kwan to $3.50 from $4 with a “sector perform” rating. The average is $4.71.

“ECN reported an earnings miss and revised its 2023 EPS guidance 27 per cent lower,” said Mr. Priebe. “The demand environment for ECN-originated loans has clearly slowed at a faster pace and by a larger magnitude than we had anticipated. We are downgrading from Outperformer to Neutral and lowering our price target to $2.75 (from $5.00) reflecting lower confidence in the earnings outlook and an increasingly challenging macro backdrop. We see a few potential scenarios where our stance could provide conservative, including: 1) a favourable outcome from the strategic review process; 2) the announcement of highly accretive M&A; or 3) a natural demand recovery from trough levels.”

* Cormark Securities’ Gavin Fairweather downgraded Quarterhill Inc. (QTRH-T) to “market perform” from “buy” and cut his target to $1.75 from $2.20. Analysts making target changes include: Canaccord Genuity’s Doug Taylor to $1.50 from $1.75 with a “hold” recommendation and Raymond James’ Steven Li to $2 from $2.45 with an “outperform” rating. The average is $2.29.

“We are maintaining our HOLD rating on Quarterhill and lowering our target price ... following Q4 results that again reflected ongoing top-line and margin pressures. ITS continues to see delays, despite a healthy backlog, as the anticipated ramp from implementation to operation on seven tolling contracts are expected late in 2023 and into mid-2024,” said Mr. Taylor. “The company’s strategic review remains ongoing (began in December 2021), and the asset remains difficult to project in the interim. Management speaks to a stronger year ahead and positive adjusted EBITDA from the ITS segment (including overhead). That said, we continue to view Quarterhill as a ‘show me’ story, particularly as the search for a new CEO adds to the uncertainty.”

* TD Securities’ Tim James lowered his AirBoss of America Corp. (BOS-T) target to $11.50, below the $13.60 average, from $14 with a “speculative buy” rating.

* Eight Capital’s Phil Skolnick initiated coverage of Athabasca Oil Corp. (ATH-T) with a “buy” rating and $4.50 target, exceeding the $3.50 average.

“We see it as one of the best ways for investors to get exposure to an oil recovery, our continued positive view on heavy oil, and rate of change alpha catalysts,” he said.

* In response to its fourth-quarter results, National Bank’s Don DeMarco raised his Fortuna Silver Mines Inc. (FVI-T) target to $6, above the $5.68 average, from $5.75 with a “sector perform” rating.

“Higher costs quarter-over-quarter and impairments weighed, yet we are encouraged by continued on-time, on-budget development at Séguéla with first pour in sight at mid-2023 and subsequent lift to FCF,” he said.

* In response to a letter from U.S. activist investor Engine Capital LP that recommended the sale or spin-off of its Burnaby refinery, IA Capital Markets’ Matthew Weekes raised his Parkland Corp. (PKI-T) target to $41 with $40 with a “buy” rating. The average is $39.31.

“While we have mixed views on the points raised in Engine Capital’s letter to PKI’s Board, we believe it ultimately highlights PKI’s significant intrinsic value upside, and the stock price jump of nearly 10 per cent indicates that the market agrees,” he said. “On the conference-call, management conveyed confidence in its strategy, the value of its integrated business, and its continued focus on near-term strategic priorities of deleveraging, synergy capture, organic growth, and enhancing shareholder returns.”

* Scotia Capital’s Phil Hardie reduced his Propel Holdings Inc. (PRL-T) target to $11.50 from $12.50 with a “sector outperform” rating. The average is $13.13.

“Propel closed out the year with a quarter that saw loan balances hit a new record high and earnings came in a touch above Street expectations, however the key focus for investors was likely a downward revision to 2023 outlook,” said Mr. Hardie.

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