Thursday’s analyst upgrades and downgrades

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

While he raised his financial forecast for Boyd Group Services Inc. (BYD-T) following a first-quarter earnings beat, driven by “robust” same-store sales growth of 25.2 per cent and sustained margin expansion, Desjardins Securities analyst Gary Ho now sees “limited upside to significant share price appreciation,” leading him to downgrade it to “hold” from “buy” previously.

The Winnipeg-based company surged 7.5 per cent on Wednesday following the release of stronger-than-anticipated results. Revenue of US$715-million and adjusted EBITDA of US$85-million both exceeded Mr. Ho’s expectations (US$690-million and US$83-million) as well as the consensus forecast on the Street (US$678-million and US$81-million).

“While we remain constructive longer-term, we note that (1) BYD will be up against tougher SSSG starting in 2Q23; (2) wage pressure persists with a tight U.S. labour market; and (3) as a result, it will be tougher to expand margins meaningfully,” he said.

Increasing his 2023 and 2024 EBITDA projections after “baking in SSSG of 20 per cent in 2023 (6 per cent in 2024), with margin expanding by 160 basis points out to 4Q24 (vs 11.8 per cent at 1Q23)”, Mr. Ho hiked his target for Boyd shares to $275 from $245. The average is $254.92.

“While we like the story longer-term—and despite increasing our estimates (higher SSSG with continued margin expansion) and target price (to $275 from $245)—we still see a limited 12.7-per-cent potential return,” he concluded.

Analysts making target adjustments include:

* Raymond James’ Steve Hansen to $275 from $240 with a “strong buy” rating.

“We are increasing our target price on Boyd Group Services ... based upon another solid beat, commensurate upward revisions to our estimates, and greater associated conviction in the company’s growth outlook,” said Mr. Hansen. “While margin progression has admittedly been slow, we’re pleased to see growth repeatedly surprising to the upside, a pattern expected to persist through 2023 as Boyd’s M&A flywheel re-accelerates and key labor/margin-related strategies (i.e. price increases, TDP, calibration) marry with improving macro fundamentals (parts availability, severity, inflation).”

* Scotia’s Michael Doumet to $255 from $230 with a “sector perform” rating.

“We view the 1Q release as a modest positive,” said Mr. Doumet. “BYD’s same-store sales growth surprised to the upside, increasing 25 per cent (vs. our estimate of 20 per cent), and drove an equal-sized EBITDA beat. While EBITDA margins remain about 200bp below pre-pandemic levels, EBITDA per store was effectively in line with 1Q19 levels. BYD believes it can continue to drive margin expansion through (i) increased throughput, (ii) higher labour margins, and (iii) the expansion of its scanning and calibration services (we believe in that order).

“We downgraded BYD following its 4Q22. It now looks like we were early. Same-store sales has room to surprise to the upside, driven by price pass-throughs, increased vehicle complexity/severity, and increasing technician capacity. That said, we think the prospects of higher sales and margin expansion are at least partially offset by higher interest/capex/lease costs, which may limit FCF margin expansion.”

* RBC’s Sabahat Khan $274 from $250 with an “outperform” rating.

“Overall, Q1 results reflected strong demand and solid execution by management in what remains an uncertain operating environment (supply chain directionally improving but labor still a work-in-progress). Over the medium- to long-term, we expect Boyd’s margins to return to pre-pandemic levels,” said Mr. Khan.

* ATB Capital Markets’ Chris Murray to $285 from $265 with an “outperform” rating.

“While shares have performed well of late, we believe Boyd’s defensive model and two-pronged growth strategy position it to outperform in current market conditions,” he said.

* National Bank’s Zachary Evershed to $270 from $250 with an “outperform” rating.

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In response to a first-quarter earnings beat and guidance raise, ATB Capital Markets analyst Nate Heywood upgraded Superior Plus Corp. (SPB-T) to “outperform” from “sector perform,” citing the expectation of increased cash flows from recently acquired Certarus and calling its near-term focus on asset integration and organic opportunities “an appropriate strategy in the defensive environment.”

Shares of Toronto-based Superior Plus jumped 5.1 per cent on Wednesday after it reported quarterly adjusted earnings before interest, taxes, depreciation and amortization of $272-million, up 9 per cent year-over-year and above the expectations of both Mr. Heywood ($258-million) and the Street ($263-million). Earnings per share slid 5 cents year-over-year to 63 cents but also topped estimates (55 cents and 54 cents, respectively).

With the “strong” results, it increased its 2023 EBITDA guidance to a range $620-million to $660-million from $585-million to $635-million. It also raised its expectations for Certarus.

“SPB has meaningfully expanded both its U.S. and low carbon fuel exposure with the announced acquisition of Certarus,” he said. “As the Company realizes incremental contributions from the expected near-term close and integration of Certarus, SPB has established a platform for diversified growth through both compressed natural gas and hydrogen deliveries. We expect the near-term focus will remain on organic growth, balance sheet maintenance and synergy realization. In the long-term, we expect that the higher interest rate environment will favour larger propane distributors like SPB, which could open the door for the future resumption of the tuck-in acquisitions of smaller market participants.

“With a leverage multiple of 3.9 times as of Q1/23, the Company is at the high-end of its 3.5-4.0 times target range; however, we expect leverage levels to improve into 2024 (ATB estimate: 3.5 times). SPB’s cash flow resiliency and 7.2-per-cent dividend yield remain an attractive consideration given the modest 2023 estimated payout ratio of 40 per cent. SPB currently trades at a 2024 estimated EV/EBITDA multiple of 5.5 times, compared to the energy infrastructure peer group of 9 times and pure-play propane peers near 7.5 times.”

Pointing to “the strong performance and supportive outlook for the Certarus business,” Mr. Heywood modestly increased his estimates, leading him to raise his target for Superior Plus shares by $1 to $13. The average is $13.20.

Elsewhere, Desjardins Securities’ Gary Ho raised his target to $13.50 from $13 with a “buy” rating.

“Our investment thesis is predicated on: (1) SPB is a leading energy distribution consolidator with recession-resistant attributes; (2) Certarus acquisition reduces seasonality and adds a growth angle; (3) its proven M&A playbook; and (4) attractive 7-per-cent dividend yield,” he said.

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While “mid-market demand remains steady,” Canaccord Genuity analyst Robert Young thinks Converge Technology Solutions Corp.’s (CTS-T) ability to regaining investor trust is “dependent on organic execution.”

Despite a first-quarter beat, shares of the Toronto-based IT service management company dropped 22.8 per cent on Wednesday after announcing the conclusion of the strategic review, which Mr. Young said led to “a status quo.”

“The company announced the appointment of Avjit Kamboj as CFO and announced a focus on organic growth with capital allocation towards a newly announced dividend and potential buyback — all positive, in our view, but not enough to offset a disappointing conclusion of the review,” he said. “Management highlighted that although several proposals were received, uncertainty given the recent banking turmoil and Converge shares at low levels limited any premium while strong future prospects and select shareholder feedback led the special committee to recommend eschewing offers and staying a public company. Converge noted steady mid-market demand despite macro uncertainty and indicated that Q2 is likely to be at par with Q4 in terms of net revenue conversion, gross profit, and EBITDA; although, 2023 consensus estimates are likely to slide lower given ongoing investment in ramping PS and MS teams. Converge expects to see recent acquisitions integrated by year-end, with $15-million of annualized savings so far; although, the benefit is not likely to be visible until Q4.”

“Given the pause on M&A and end of the strategic process amidst mixed peer commentary on IT spend,” Mr. Young thinks “catalysts are few and likely to be driven by an upcoming investor day, quarterly reports, and potential monetization of Portage which is executing well.”

That led him to lower his recommendation for Converge shares to “speculative buy from “buy” previously.

“Converge’s sell off implies the stock is now trading at 4.8 times EV/2024 estimated EBITDA, which is solidly in the bottom decile of VAR peers despite strong organic growth, implied FCF yield more than 10 per cent, and a strong pipeline of higher margin PS/MS demand,” he added.

“On balance, we believe the stock could remain in the penalty box till execution on organic growth and margin expansion bears fruit. A riskier macro backdrop and weak sentiment drives our rating downgrade to SPEC BUY (from Buy) and revised $5.00 price target (from $8.50) based on 6 times EV/2024E EBITDA (from 8 times). In our view, shares now appear oversold. We are also cautious on placing too much premium when a strategic review yielded unattractive offers.”

Mr. Young’s new $5 target falls below the average on the Street of $6.48.

Elsewhere, others making changes include:

* Eight Capital’s Christian Sgro to $7 from $9 with a “buy” rating.

“Converge reported Q1/23 results ahead of estimates; however, strength was overshadowed by an uncertain demand environment and the sudden conclusion of its ongoing strategic review,” he said. “The company’s value proposition is centered on its holistic and differentiated offering to the mid-market. Management was positive about the resilience of this cohort as compared to the enterprise market where the demand environment seems less certain. We believe Converge’s valuation can potentially re-rate higher with execution on top-line growth expectations alongside steady margin expansion.”

* Desjardins Securities’ Jerome Dubreuil to $4.50 from $7 with a “buy” rating.

“CTS’s share price could remain under pressure in the near term as (1) index exclusion appears increasingly likely, (2) the market needs to digest the shift in strategy, and (3) the full impact of the uncertain macro environment on CTS remains uncertain. That being said, the FCF yield of 19 per cent and 5.4 times EV/FY1 EBITDA look attractive for a company that we believe has decent EBITDA growth potential through integration initiatives and with leverage under control,” he said.

* Raymond James’ Steven Li to $5.50 from $7 with an “outperform” rating.

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Following in-line quarterly results, Raymond James analyst Jeremy McCrea raised his recommendation for Birchcliff Energy Ltd. (BIR-T) to “outperform” from “market perform,” touting its growth in the Montney formation and seeing its shares having reach a bottom.

“Investors have seen plenty of volatility with BIR shares over the past few years,” he said. “Nevertheless, the company has continued to profitably invest in its core Montney position at Pouce Coupe, establishing infrastructure and a well delineated region that would be much more costly to recreate today. Although in 2022 BIR reaped the benefits of its unhedged production strategy, the recent decline in gas prices has put pressure on BIR’s stock, with the company adding a small amount of debt now to cover both the dividend and capex plans.

“Nevertheless, the key takeaway from the quarter will be the unveiling of a new core area in the Montney, that seems to be highly over-pressured in the gas region at Elmworth. Despite minimal production today, this could be a key source of gas supply as more LNG comes on stream – likely at attractive economics based on high-level geographic trends throughout the region. With a 10-per-cent dividend, an in-line quarter, and minor adjustments to guidance, this update should be welcomed by investors (and potentially reverse high short selling positions). Combined also with what appears to be ‘peak pessimism’ on gas weighted names and early indications TC Energy is changing its ‘IT/FT’ transport policies this summer, we believe we may have finally seen the lows in BIR’s stock.”

Mr. McCrea maintained an $11 target for Birchcliff shares. The current average is $10.47.

Others making changes include:

* Stifel’s Michael Dunn to $7.80 from $8 with a “hold” rating.

* Canaccord Genuity’s Mike Mueller to $10 from $10.50 with a “buy” rating.

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Believing “the credit environment and possible slowing of the US segment will cap the growth of the stock,” Raymond James analyst Stephen Boland lowered Chesswood Group Ltd. (CHW-T) to “market perform” from “outperform.”

“The company reported EPS of $0.06 vs consensus at $0.29 and RJL at $0.34,” he said. “The ROE was 1.7 per cent. Revenue was in-line with our estimate, but the lower earnings were due to higher provisioning and charge-offs. The U.S. portfolio is experiencing higher delinquencies, especially in the Transport segment. The U.S. segment is also experiencing lower loan applications as companies struggle with the higher interest rate environment.

“In their outlook, management indicated they are positioned to work through the challenging next year and be in a stronger position when economic conditions normalize. The portfolio has a higher prime segment than in the past and CHW has increased its asset management fee income. The company has $345 million of off-balance sheet receivables where they earn management fees.”

Pointing to “the uncertain near-term outlook — aggravated by a persistently volatile rate environment,” Mr. Boland cut his target for shares of the Toronto-based firm to $11, below the $12.13 average, from $16.

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Seeing an “absence of immediate catalysts,” Raymond James analyst Andrew Bradford cut Secure Energy Services Inc. (SES-T) to “outperform” from “strong buy” on Thursday.

“We are updating our outlook for Secure giving effect to recent energy price / rig count dynamics plus the incremental impact of Secure’s two large infrastructure projects – the Clearwater pipeline and terminal station and the Montney water gathering and disposal infrastructure,” he said. “These two projects are scheduled to contribute take-or-pay contracted cash flow beginning early in 2024. The net changes to our numbers are negligible in 2023 and modestly positive in 2024.”

“The market had a visceral negative reaction to Secure’s 1Q23 disclosures – resetting the stock level approximately 5 per cent lower, which at least in part, we attribute to its incremental $50-million allocation to a water-disposal project in the Montney. To the extent this attribution is accurate, the market effectively erased $90-million of market value predicated on a $50-million capital project. Weighing the project on its own merit, 90 per cent of its capacity is contracted on a take-or-pay basis for 12 years, providing approximately $10-million in annual EBITDA, making for an approximate 5 times build multiple. Secure expects the project will commission late in 2023/ early 2024. We expect Secure may fill the remaining 10 per cent of capacity on the spot market.”

Mr. Bradford’s target remains $9.25. The average is $8.70.

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While the macro outlook for Nuvei Corp. (NVEI-Q, NVEI-T) “remains uncertain,” RBC Dominion Securities analyst Daniel Perlin expects growth to “re-accelerate” in the second half of 2023 on “new wins and seasonality.”

On Wednesday, shares of Montreal-based payment technology company plummeted 14.4 per cent after its second-quarter guidance fell below the Street’s expectations, raising concerns about growth through the remainder of the year. Those worries overshadowed the company’s first-quarter results, which Mr. Perlin called “solid,” and a reiteration of its full-year outlook.

While he did acknowledge that the company’s second-quarter outlook is “seasonally light” with guidance of US$300-308-million in revenue and adjusted EBITDA of US$105-110-million both below the Street’s expectations (US$316-million and US$119-million, respectively), the analyst emphasized “organic growth momentum remains healthy” and sees the integration of recently acquired Paya Holdings Inc. “on track.”

“Q1 ex-crypto organic constant currency growth was 26 per cent, above our estimate for 23 per cent,” he said. “We estimate growth slows to 20 per cent Q2 on seasonality and then rises to 28 per cent in 2H. Guidance assumes contribution from new customer wins (Q1 new business up 125 per cent year-over-year), sustained growth in key verticals (e.g. 37-per-cent year-over-year growth in ex-crypto global e-commerce Q1), and the diminishing mix of legacy SMB. Healthy ex-crypto momentum reflects strength in online retail (up 84 per cent year-over-year), travel (up 65 per cent year-over-year), online gaming (up 53 per cent year-over-year), and social gaming (up 51 per cent year-over-year). Nuvei has several large customer deployments planned Q2/Q3. Nuvei disclosed that it is not seeing any macro headwinds and volume through April and the first week of May is in line with the company’s expectations.”

Seeing its valuation as “compelling” following Wednesday’s drop, Mr. Perlin assumed coverage of Nuvei with an “outperform” recommendation and US$50 target. The average is US$58.33.

“Nuvei is trading at 12 times FTM [forward 12-month] EV/EBITDA and 5-per-cent FTM FCF yield, a discount to high-growth payment peers at 21 times and 4 per cent,” he said. “Nuvei’s multiple has compressed due to the slowing in the company’s growth due to interim headwinds (crypto, FX). We believe that Nuvei’s valuation multiple may expand through 2023 as Nuvei’s growth re-accelerates.”

“Our Outperform thesis reflects Nuvei’s strong revenue growth drivers and large market opportunity. COVID-19 has accelerated the global shift away from cash to electronic payments and has driven the uptake of digital services. Nuvei has a large total addressable market (TAM), which includes opportunities in key fast-growth verticals like online retail, online marketplaces, and social gaming. We believe that Nuvei’s shares offer attractive risk-reward, given expected growth and possible valuation multiple expansion, as the mix of digital revenue increases. Key future drivers of growth include: 1) geographic expansion (Latin America/Asia-Pacific is only 5 per cent of revenue); 2) new enterprise customers in key verticals; 3) increased sales & marketing investments; 4) M&A; and 5) stronger traction with developers. U.S. gaming/gambling is an additional growth catalyst.”

Elsewhere, Credit Suisse’s Timothy Chiodo cut his target to US$42 from US$45 with an “outperform” rating.

“Nuvei reported strong Q1 results with volumes, revenue and Adj. EBITDA all coming in ahead of consensus/CS estimates,” said Mr. Chiodo. “Despite the beat, FY 2023 guidance was little changed with the low-end raised by the outperformance in Q1 with management citing a cautious outlook on the macro. While Q1 organic revenue grew 8-per-cent FXN, underlying trends ex-digital assets and crypto were strong at 26-per-cent FXN, with crypto and digital assets expected to represent 5 per cent of revenues going forward. The strong underlying Q1 trends ex-digital assets and crypto give confidence in Nuvei’s ability to achieve organic FXN ex-digital assets and crypto growth of 23-28 per cent for the full-year, even with expectations for Q2 to be below this range (our model suggests high-teens implied for Q2) due to the expected ramping of new businesses in the second half of the year. While the second half guidance implies a reacceleration back to roughly Q1 levels for organic FXN ex-digital assets and crypto revenues, the second half revenue growth required to reach the mid-point of guidance is low to mid single digits HoH (on a pro-forma basis for Paya). We continue to believe that Nuvei represents a share gaining (20-per-cent growth vs. industry mid-to-high single digits), eCommerce/CNP focused (91 per cent of volume exiting 2022 for core Nuvei), profitable (25-per-cent EBITDA margins ex-SBC), now more diversified (Paya adds B2B, Non-profit & Education, Healthcare, Government, & Utilities) and reasonably valued business.”

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Despite a “great” first-quarter financial performance that exceeded his expectations, National Bank Financial analyst Maxim Sytchev expressed concern over Stella-Jones Inc.’s (SJ-T) reliance on its Utility Poles business, saying we are “not hanging our hat on one (very well) performing vertical that’s predominantly driven by pricing dynamic.”

“With strong financial performance in Q1/23 and a 100 bps EBITDA margin lift for 2024, management continues to deliver with the tools it has at its disposal,” he said. “While we are pleased with the momentum, we wonder for how long the robust pricing backdrop can persist for Poles; after all, the vast majority of organic growth Poles was pricing-related (and in a commodity space, pricing has a tendency to fluctuate). Poles are 51 per cent of the company’s business while the rest is ostensibly standing still (while Resi is declining). With one strong vertical, we are leery of chasing that type of investment thesis where we have to hang all of our hopes on pricing sustainability.”

Shares of the Montreal-based company surged 7.8 per cent on Wednesday following the premarket release. Revenue rose 7.8 per cent year-over-year to $710-million, exceeding Mr. Sytchev’s $692-million estimate and the consensus forecast of $707-million. Adjusted earnings per share of $1.03 also topped projections (77 cents and 78 cents, respectively).

“Sales were driven by strong utility Poles momentum due to pricing (the vertical now represents more than 50 per cent of sales vs. 40 per cent in 2022), while other infra related segments also performed well,” he said.

“Pricing momentum in the Poles vertical accounted for virtually all of the segment’s 29-per-cent year-over-year organic growth, offsetting significant declines in Resi lumber and Logs & Lumber. The former vertical saw lower volumes and pricing year-over-year, as inflation and higher rates continue to pressure consumers’ discretionary spending.”

Citing the 20-per-cent-plus compound annual growth rate expecting for Poles through 2024, Mr. Sytchev raised his earnings projections, leading him to hike his target for Stella-Jones shares to $64 from $57, keeping a “sector perform” recommendation. The average on the Street is currently $65.14.

Elsewhere, others making changes include:

* Desjardins Securities’ Benoit Poirier to $79 from $71 with a “buy” rating.

“We are very pleased with SJ’s 1Q results and the increased guidance,” he said. “Based on SJ’s track record, we believe the 16-per-cent margin is achievable; here are some reasons why: economies of scale for utility pole volume growth; SJ now taking a more disciplined approach to pricing; reduced contribution from the residential lumber business; and increased contribution from utility poles in the mix (utility poles were 51 per cent of 1Q sales). We now forecast an EBITDA margin of 15.9 per cent in 2023 and 16.0 per cent in 2024.”

* Acumen Capital’s Jim Byrne to $72 from $62 with a “buy” rating.

“Strong organic growth in the company’s utility poles segment and more stable results from the railway ties segment have improved the outlook. The company will host an IR Day in May where we look forward to further updates on the longer-term outlook,” he said.

* RBC’s Walter Spracklin to $67 from $60 with an “outperform” rating.

“SJ share price performance has been very strong year-to-date (up 22 per cent) on the back of significantly higher earnings growth exhibited in the Q4 results reported in March and now with the Q1 results reported today. With new capacity coming online and growth visibility strong, we see a higher-for-longer dynamic playing out for SJ. Moreover, we expect this good news story to be amplified at Investor Day (May 25), which we see as supportive to valuations longer-term. Reiterate Outperform rating on the shares,” said Mr. Spracklin.

* Scotia’s Benoit Laprade to $64 from $60 with a “sector outperform” rating.

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In other analyst actions:

* RBC’s Luke Davis downgraded Parex Resources Inc. (PXT-T) to “sector perform” from “outperform” but raised his target to $30 from $2. Elsewhere, Stifel’s Cody Kwong bumped his target to $37.50 from $36 with a “buy” rating. The average on the Street is $35.03.

“We downgrade Parex shares to Sector Perform given valuation discount to peers has substantially narrowed. In our view, management’s reinvigorated focus on its large Colombian exploration portfolio is being appreciated by investors with fiscal clarity removing a key overhang earlier in the year,” said Mr. Davis. “While internal execution remains strong, we believe there is more near-term upside elsewhere.”

* Mr. Davis raised Pipestone Energy Corp. (PIPE-T) to “outperform” from “sector perform” with a $3.75 target (unchanged), below the $3.96 average.

“We upgrade Pipestone shares to Outperform on the back of a heavily discounted valuation couple with management’s sharp focus on operational execution and increasing shareholder returns,” he said. “The company posted a solid quarter and we believe remains well positioned to meet annual guidance despite recentoutages related to Alberta wildfires.”

* CIBC’s Kevin Chiang cut his Airboss of America Corp. (BOS-T) target to $15, above the $12.75 average, from $16 with an “outperformer” rating, while Canaccord Genuity’s Yuri Lynk bumped his target to $15 from $14 with a “buy” rating.

* ATB Capital Markets’ Chris Murray increased his target for Bird Construction Inc. (BDT-T) to $12.50 from $12 with an “outperform” rating, while CIBC’s Jacob Bout bumped his target $10.50 from $10 with a “neutral” rating. The average is $11.69.

* National Bank’s Matt Kornack raised his Boardwalk REIT (BEI.UN-T) target to $78.50 from $74 with an “outperform” rating. Other changes include: Scotia Capital’s Mario Saric to $70 from $66.50 with a “sector perform” rating, RBC’s Jimmy Shan $74 from $69 with an “outperform” rating and CIBC’s Dean Wilkinson to $68 from $64 with a “neutral” rating. The average is $70.75.

* CIBC’s Mark Jarvi reduced his Boralex Inc. (BLX-T) target to $47, which is 31 cents below the average, from $48 with an “outperformer” rating.

* JP Morgan’s Kenneth Worthington cut his Brookfield Asset Management Ltd. (BAM-N, BAM-T) target to US$38, above the US$36.31 average, from US$39 with an “overweight” rating, while BMO’s Sohrab Movahedi raised his target to US$33 from US$32 with a “market perform” rating.

“Fundamental drivers of value remain positive for BAM with positive fund flows and stable fee rates and margins,” said Mr. Movahedi. “Flagship fundraising is progressing well with the launch of successor real estate, transition and credit funds set to provide a continued topline uplift in H2/23. However, we are mindful of multiple upside to BAM’s premium valuation absent a further acceleration to fee-bearing capital growth.”

* CIBC’s Hamir Patel raised his Conifex Timber Inc. (CFF-T) target to $1.50 to from $1.25 with an “underperformer” rating. The average is $1.77.

* RBC’s Maxim Matushansky raised his Copperleaf Technologies Inc. (CPLF-T) target to $8 from $7 with an “outperform” rating. Other changes include: BMO’s Thanos Moschopoulos to $7 from $6.50 with an “outperform” rating, CIBC’s Todd Coupland to $6.50 from $5 with a “neutral” rating and Canaccord Genuity’s Robert Young to $7 from $6.25 with a “buy” rating. The average is $7.11.

* National Bank’s Zachary Evershed raised his Dexterra Group Inc. (DXT-T) target to $9, above the $7.57 average, from $8.50 with an “outperform” rating.

* Canaccord Genuity’s Robert Young raised his Dye & Durham (DND-T) target to $30 from $28 with a “buy” rating, while Raymond James’ Stephen Boland cut his target to $23 from $26 with an “outperform” rating. The average is $24.75.

* RBC’s Walter Spracklin raised his Exchange Income Corp. (EIF-T) target to $66 from $60 with an “outperform” rating. Others making changes include: Raymond James’ Steve Hansen to $68 from $65 with a “strong buy” rating, IA Capital Markets’ Matthew Weekes to $60 from $59 with a “buy” rating, Canaccord Genuity’s Matthew Lee to $71 from $66 with a “buy” rating, Scotia’s Konark Gupta to $66 from $65 with a “sector outperform” rating and CIBC’s Krista Friesen to $64.50 from $62 with an “outperformer” rating. The average is $65.32.

“EIF delivered a strong quarter that was better than feared, driven mostly by an aviation segment beat,” said Mr. Gupta. “More importantly, management raised 2023 EBITDA guidance for the second time and confirmed our view that EBITDA is on track to exceed $600-million in 2024, even before future M&A or contract wins. We believe this is a perfect backdrop for a dividend raise in the near term, given the payout ratio remains within the 50-60-per-cent range. In addition, we continue to see a strong potential for more M&A and contract wins, supported by access to $1.0-billion-plus liquidity, no debt maturity until 2025 and improving leverage ratio. We have slightly raised our EBITDA outlook, partially offset by a higher-than-expected Q1 net debt, resulting in a $1 increase in our target to $66. We maintain our Sector Outperform rating as EIF remains a solid growth compounder with an attractive dividend yield, trading at an inexpensive 6.5 timesEV/EBITDA multiple on our 2024 estimate.”

* RBC’s Geoffrey Kwan lowered his target for Fiera Capital Corp. (FSZ-T) to $8 from $9.50 with a “sector perform” rating. Other changes include: Barclays’ John Aiken to $8 from $9 with an “equal-weight” rating, BMO’s Étienne Ricard to $8.50 from $9.50 with a “market perform” rating, Scotia’s Phil Hardie to $9 from $10 with a “sector perform” rating and CIBC’s Nik Priebe to $7.25 from $8 with a “neutral” rating. The average is $8.38.

“Q1/23 earnings were a touch below Street expectations, but the bigger investor focus and driver for the stock were likely the higher-than-expected outflows,” said Mr. Hardie. “The combination of a challenging operating environment and a string of outflows has remained an overhang for Fiera’s stock for some time. Unfortunately, these results are not likely to break that trend.

“Underlying investment performance across Fiera’s strategies remains solid, and this quarter’s large outflow was mainly driven by a single mandate in its financial intermediary channel. Likely striking a bit of nerve with shareholders was that the outflows stemmed from StonePine, the firm recently formed by one of Fiera’s former start portfolio managers, which sub-advises $50-billion in AUM for Fiera. On a more constructive note, management noted that it generated positive flows excluding the large StonePine redemption.”

* Scotia’s Phil Hardie raised his Goeasy Ltd. (GSY-T) target to $140 from $130 with a “sector perform” rating, while BMO’s Étienne Ricard moved his target to $153 from $140 with an “outperform” rating. The average is $162.10.

“goeasy’s stock price has rebounded from lows and recovered to levels prior to the government’s budget announcement. goeasy is on our radar, but we think reduced risk to the economic outlook, a broader shift in investor sentiment and risk appetite, and demonstrated progress toward its 2024 targets despite the lending cap are needed to sustain the rebound and support the next leg up for the stock,” said Mr. Hardie.

* Desjardins Securities’ Doug Young raised his Great-West Lifeco Inc. (GWO-T) target to $39 from $37 with a “hold” rating. The average is $38.60.

“While the focus will be more on learning how results look under the new accounting guidelines (IFRS 17/9), base EPS missed our forecast, and this was despite a lower-than-expected tax rate. Otherwise, there were some puts and takes, which we cover below, but there was nothing in these results to change our views,” said Mr. Young.

* National Bank’s Gabriel Dechaine cut his IA Financial Corp. Inc. (IAG-T) target to $98, below the average by 56 cents, from $100 with an “outperform” rating. Other changes include: BMO’s Tom MacKinnon to $99 from $100 with an “outperform” rating, Canaccord Genuity’s Scott Chan to $96 from $100 with a “buy” rating and Desjardins Securities’ Doug Young to $95 from $98 with a “buy” rating.

“Core EPS was below our estimate and consensus, and the weaker U.S. dealer services results will likely linger for a few quarters, in our view,” said Mr. Young. “We lowered our EPS estimates (see sidebar) and dropped our target price ... All that said, given the 8-per-cent drop in its stock price [Wednesday, we believe various concerns are baked into expectations.”

* RBC’s Nelson Ng reduced his Innergex Renewable Energy Inc. (INE-T) target to $16 from $17 with an “outperform” rating. Other changes include: IA Capital Markets’ Naji Baydoun to $22 from $24 with a “strong buy” rating and CIBC’s Mark Jarvi to $16.50 from $17.50 with a “neutral” rating. The average is $18.67.

“Given the company’s elevated payout ratio and currently constrained liquidity position, we believe investors will focus on management’s near-term initiatives to bolster liquidity (e.g., potential refinancing and asset sales) to fund growth,” said Mr. Ng. “We are reducing our price target ... to reflect our view that it could be more difficult for the company to fund future growth.”

* CIBC’s Krista Friesen increased her Linamar Corp. (LNR-T) target to $89 from $86 with an “outperformer” rating, while Raymond James’ Michael Glen moved his target to $90 from $84 with an “outperform” rating. The average is $87.80.

* Ms. Friesen lowered her target for NFI Group Inc. (NFI-T) to $8.50, below the $11.63 average, from $9 with an “underperformer” rating.

* CIBC’s Dean Wilkinson raised his Minto Apartment REIT (MI.UN-T) target to $21 from $20 with an “outperformer” rating. The average is $19.27.

* ATB Capital Markets’ Nate Heywood cut his Northland Power Inc. (NPI-T) target to $45 from $48 with an “outperform” rating. Other changes include: Scotia’s Justin Strong to $45.75 from $49 with a “sector outperform” rating, IA Capital Markets’ Naji Baydoun to $44 from $46 with a “buy” rating, Raymond James’ David Quezada to $44 from $48 with an “outperform” rating, Desjardins Securities’ Brent Stadler to $39 from $43 with a “buy” rating and CIBC’s Mark Jarvi to $39 from $42 with an “outperformer” rating. The average is $44.07.

“It was a tough quarter, and continued inflationary pressures have further impacted the Baltic Power project cost, which we now estimate could total $6.3-billion (was $5.5-billion),” said Mr. Stadler. “In our view, achieving financial close on HL and BP, locking in project costs, and providing clarity on funding and concrete guidance on expected project returns could be well-received by investors and get the story back on track. We remain bullish on offshore wind over the longer term, but acknowledge near-term challenges remain.”

* CIBC’s Cosmos Chiu moved his Pan American Silver Corp. (PAAS-Q, PAAS-T) target to US$27 from US$26, retaining an “outperformer” rating. The average is US$24.16.

* Scotia’s Michael Doumet raised his Ritchie Bros. Auctioneers Inc. (RBA-N, RBA-T) target to US$74 from US$72 with a “sector outperform” rating. The average is US$66.71.

* TD Securities’ Jonathan Kelcher cut his Tricon Residential Inc. (TCN-N, TCN-T) target to US$10.50 from US$11.50 with a “buy” rating, while BMO’s Stephen MacLeod raised his target to US$13.50 from US$13 with an “outperform” rating. The average is US$9.98.

“Solid SFR demand momentum continued in Q1/23 (and into April). As expected, rising borrowing rates led to Tricon dialing back the pace of SFR acquisitions, with a nearterm focus on cost containment,” said Mr. MacLeod. “Acquisitions to double in Q2 (seasonal listings growth), and management expressed cautious optimism on conditions improving to allow Tricon to buy homes at blended cap rates at or above financing costs. While unfavourable acquisition spreads have changed the near-term growth trajectory, we continue to believe Tricon has a long runway to drive core FFO growth and shareholder value.”

* CIBC’s Dean Wilkinson cut his True North Commercial REIT (TNT.UN-T) target to $3.50, below the $3.60 average, from $4 with a “neutral” rating. Other changes include: National Bank’s Matt Kornack to $2.75 from $3.50 with a “sector perform” rating and IA Capital Markets’ Gaurav Mathur to $3.25 from $4.75 with a “hold” rating.

* Canaccord Genuity’s Derek Dley lowered his target for Trulieve Cannabis Corp. (TRUL-CN) to $33 from $40 with a “buy” rating, while Echelon Capital’s Andrew Semple cut his target to $18 from $22 with a “buy” rating.. The average is $24.31.

“We maintain our prior view that Trulieve’s organic growth may trail peers in 2023 as it closes some underperforming assets and lacks exposure to certain key states,” said Mr. Semple. “However, the Company retains a deep pipeline of longer-term growth opportunities. These include: 1) Florida (pop. 21.8M) adult-use legalization, by far the most exciting growth opportunity for Trulieve, 2) adult-use legalization in Maryland on July 1 (pop. 6.2M), and 3) exposure to emerging medical markets, such as Georgia (pop. 10.8M) and West Virginia (pop. 1.8M). We single out Maryland, Georgia, and Florida as states with clear and large upside potential. With 39M people across these three states, we believe there is a potential market opportunity of more than $10-billion over the long term if all three states were to legalize adult-use cannabis (compared to sales of $2.2B today). These long-term opportunities continue to underpin our bullish view on Trulieve, and these catalysts offer room for upside to our valuation model as we conservatively assess Trulieve only in relation to cannabis regulations that are in effect today.”