Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

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

The market may have overreacted to the potential impact of the growing advertising boycott targeted at Facebook Inc. (FB-Q), according to Citi analyst Jason Bazinet.

“The Street seems rattled by these developments,” he said. “Indeed, Facebook’s equity has fallen from $242 per share on June 24, 2020 to just $215 per share on June 29, 2020. In effect, the ad pause has wiped out nearly $80-billion of Facebook’s market capitalization in about a week.”

Story continues below advertisement

Based on his analysis, Mr. Bazinet projects a one-month pause, ending in July, would have an impact on Facebook’s equity of US$1 per share. However, if those advertisers do not return to social media platform, he thinks it will cost the company US$17 per share.

“There is no need to sugar coat this,” he said. “This is a development that is orthogonal to our bullish stance on Facebook. However, when we size the likely impact, it seems to us that the Street has overreacted to this news. We suspect the most likely next steps are renewed measures to ensure that branded advertising does not occur next to hate speech. At that juncture, we suspect the majority – if not all – of the large marketing firms will return to Facebook. In this sense, the ad pause on Facebook isn’t dissimilar to the issues that confronted YouTube last year.”

Mr. Bazinet maintained his financial projections for the company and a “buy” rating and US$275 target for its stock. The average on the Street is US$246.17.

“We believe Facebook’s continued execution, its scale, and the sophistication of its ad platform and products should contribute to continued robust revenue growth,” he said.


Seeing its Séguéla project in Ivory Coast providing the opportunity to double production and become a multi-asset producer with geographic diversity, Canaccord Genuity analyst Carey MacRury initiated coverage of Roxgold Inc. (ROXG-T) with a “buy” rating on Tuesday.

The Toronto-based producer, which also operates the Yaramoko underground complex in Burkina Faso, acquired Séguéla from Newcrest Mining for $20-million in cash with another $10-million coming with initial production.

Story continues below advertisement

“Roxgold expects to receive the mining permit for Séguéla and complete an updated resource and feasibility study ahead of a potential construction decision in H1/21,” he said. “We forecast production of 140,000 ounces per year on average over its first three years of operation and starting in 2023 at an average minesite AISC [all-in sustaining cost] of $760 per ounce.

“We see Roxgold as able to finance construction (initial capex of $142-million) from a combination of cash on hand, operating cash flow and we assume a new $75-million debt facility, the same size facility to company put in place to fund Yaramoko. We expect Roxgold to draw only $25-million in the facility which maintaining a minimum cash balance of $40-million through construction.”

Touting its “strong” balance sheet and having “demonstrated a track record of development success,” Mr. MacRury set a target of $2 for Roxgold shares, which is 2 cents below the current average.

“Roxgold is a West Africa-focused gold producer with operations and projects in Burkina Faso and Cote d’Ivoire,” he said. “We acknowledge that geopolitical risk in West Africa is a likely concern for many investors given the rise of terrorist activity, particularly in the northern and eastern areas of Burkina Faso.

“Despite the rise of terrorism, West Africa is the fastest-growing gold producing region with gold production increasing 75 per cent between 2010 and 2018, far outpacing the 25-per-cent increase in global gold production. The region is now the fourth-largest region globally and produces more gold than Canada, Australia and the United States.”


Story continues below advertisement

Citing “improved sustainability metrics and sustained cost savings,” Desjardins Securities analyst Scott Van Bolhuis raised his financial estimates for Whitecap Resources Inc. (WCP-T) following a discussion with CEO Grant Fagerheim on Monday.

“For the remainder of the year, WCP expects to spend $5-million per month with exit production of 59–60 thousand barrels of oil equivalent per day (mboe/d) while exiting with a modest decline rate of 13–14 per cent,” he said. “For drilling to accelerate, management highlighted the need for price stability between US$42–45/bbl WTI, which we view as prudent given commodity price volatility. Next year, we anticipate WCP will spend $200–250-million to hold production flat at 60 mboe/d.”

Seeing Whitecap continuing to be a leader in ESG with a “strong baseline track record of environmental, social and governance performance,” Mr. Van Bolhuis raised his target for its shares to $2.75 from $2 with a “buy” rating (unchanged). The average on the Street is $2.81.


Echelon Wealth Partners analyst Stephan Boire reinstated coverage of Invesque Inc. (IVQ.U-T) with a “hold” rating, but he thinks the Toronto-based health care real estate company brings “tremendous value” while its management is “going through a minefield.”

“On March 12, 2020, we changed our prior Buy rating to an Under Review rating. We were awaiting after the company’s being able to further communicate on, and clarify, its strategy, while financial results were carrying greater variability,” he said.

Story continues below advertisement

“At this stage, we feel like management is taking the right steps in terms of communication and execution, while the both company and sector risks remain substantial. In our opinion, in addition to the challenges on the operational side, we believe Symphony’s portfolio remains a significant risk for IVQ.”

Noting Invesque’s “plate is full” as it continues to focus on cash preservation, he cut his target for its shares to US$4 from US$9.25. The average on the Street is US$3.58.

“We adjusted our forecast on the back of Q4 and Q1 results, as well as our revised assumptions. We do not anticipate IVQ to acquire additional properties in neither 2020 nor 2021,” he said.


Believing it offers investors “several attractive and unique attributes” within the payments industry, RBC Dominion Securities analyst Daniel Perlin initiated coverage of Shift4 Payments Inc. (FOUR-N) with an “outperform” rating after coming off research restriction following its initial public offering.

The Pennsylvania-based payments technology company began trading on June 5, raising US$345-million in its IPO after pricing its shares at US$23.

Story continues below advertisement

"We believe Shift4 offers several unique attributes including 1) an embedded feeder-pool to convert gateway clients to higher value End-to-End (E2E) processing clients, 2) a partner-centric distribution model via software partners, which lowers customer acquisition costs (CAC) and promotes economies of scale, and 3) a demonstrated track record of innovation in the hospitality industry," said Mr. Perlin.

He set a target of US$47 per share.

“Although Shift4 is up 60 per cent since its IPO, we believe more upside is possible as the strategic conversions to E2E continue, new market share gains are attained, and overall economic backdrop drives improvement in same-store-sales,” he said.

Elsewhere, Citi analyst Ashwin Shirvaikar set a “neutral/high risk” rating and US$40 target.

Mr. Shirvaikar said: “We have a positive view of the company due to its technology-led (i.e., sustainable) leadership position in two large, attractive end markets and tenured management. However, the stock has appreciated 56 per cent from its $23 IPO price (itself 15 per cent above the midpoint of the initial $19-$21 range). Although we incorporate the impact of better economic data through June and a likely higher debt pay down, our analysis does not get us to a positive outcome on the rating. Meanwhile, the recent spike in COVID-19 cases in parts of the U.S. and the resultant re-tightening of social distancing rules highlights the High Risk encapsulated in Citi’s Quant Risk model. Our positive view of the company would lean us towards being more constructive, should an opportunity arise.”


Story continues below advertisement

COVID-19-related headwinds are likely to persist for Heritage Cannabis Holdings Corp. (CANN-CN), said Desjardins Securities analyst John Chu following the release of weaker-than-anticipated second-quarter results.

He also sees the Vancouver-based company suffering from weak demand in the extraction industry due to the “slow” launch of cannabis 2.0 products.

On Monday, Heritage reported sales of $1.4-million, falling short of Mr. Chu's $6.4-million projection. An adjusted EBITDA loss of $2.1-million also missed his estimate (a profit of $200,000.).

“Heritage noted in June that it had completed the initial purchase order for a major customer (we suspect Cronos), but given the market conditions, the customer opted not to follow up with a subsequent order,” he said. “After speaking with management, we suspect this is an industry-wide issue rather than a problem with quality.”

Expecting sales headwinds to continue, Mr. Chu trimmed his financial expectations for both fiscal 2020 and 2021.

That led him to trim his target for Heritage shares to 45 cents from 60 cents, matching the average on the Street. He maintained a “buy” rating.

“We lowered our numbers for FY20 and FY21 to reflect the soft 2Q, the loss of a major customer and the ongoing COVID-19 environment, partially offset by the launch of Heritage’s own branded products. We continue to believe cannabis 2.0 sales, especially vapes, which Heritage has higher exposure to, should enjoy very strong growth in the coming years. We have adjusted our model accordingly, although on a lower sales base after accounting for the softer 2Q results. We have reduced our gross margin and EBITDA estimates to reflect the softer sales outlook and lower utilization rates,” he said.


In other analyst actions:

* TD Securities analyst Steven Green lowered Centerra Gold Inc. (CG-T) to “hold” from “buy” with a $17 target, up from $15.50. The average is $15.98.

* TD’s Aaron Bilkoski raised Peyto Exploration & Development Corp. (PEY-T) to “hold” from “reduce” with a $1.75 target, down from $1.90. The average is $2.98.

* Calling it a “top quality U.S. focused Industrial REIT solidly progressing towards its critical mass,” Echelon Wealth Partners analyst Frederic Blondeau initiated coverage of WPT Industrial REIT (WIR.U-T) with a “buy” rating and US$15 target. The average on the Street is US$13.73.

* Canaccord Genuity analyst Luke Hannan resumed coverage of Goodfood Market Corp. (FOOD-T) with a “buy” rating and $5.75 target (unchanged). The average on the Street is $5.44.

“We believe Goodfood offers investors a robust growth outlook, reflecting its positioning in the high-growth Canadian meal-kit delivery and online grocery market, at an attractive valuation,” said Mr. Hannan. “We believe the company remains on track to achieve positive EBITDA at the corporate level in the medium term, aided by the relatively underpenetrated (but fast-growing) Canadian market and the company’s ability to add subscribers at a relatively low cost. In our view, Goodfood is poised to remain the leading player in the Canadian meal-kit delivery market, given its net cash position as of its latest quarter and as it adds subscribers at a faster pace than peers.”

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies