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

Russia’s invasion of Ukraine has brought “significant gyrations in commodity markets that were already extremely tight,” according to Canaccord Genuity analyst Dalton Baretto.

“Russia (and in the case of Fe pellets, Ukraine) is a top-10 producer of most industrial commodities,” he added. “Almost all commodities achieved all-time highs during the quarter, based on actual disruptions, stockpiling given uncertainty, and sentiment as reflected on futures exchanges.”

In a research report released Tuesday, Mr. Baretto predicted a “volatile” environment will persist through 2023 as major supply-demand issues continue to emerge and impact both commodity prices and equity valuations.

“From a geopolitical and global trade perspective, we believe what we are seeing today is the equivalent of Pangaea breaking apart, and that we are in the early days of the global economy splintering into two blocs,” he said. “In our view, these machinations will be significantly inflationary: • We expect fierce competition among nations and alliances to lock up commodity supplies for food, energy, and economic security. • We expect significant supply chain realignment over the medium term as companies and countries move to lower supply risk.

“As such, we expect a decade of commodity price support, with the industrial commodity complex poised to benefit from: • Inflationary trends • A movement to lower reliance on the US$ • Building of strategic stockpiles • (Re)building onshore manufacturing capability.”

Mr. Baretto made “limited” changes to his near-term commodity price forecasts, seeing the current dynamics already priced in. However, he increased his medium-term projections for several “critical” metals, including copper and high-grade iron ore, seeing supply issues.

Based on price performance over the first quarter of the year, Mr. Baretto downgraded a pair of mining companies:

* First Quantum Minerals Ltd. (FM-T) to “hold” from “buy” with a target increasing to $44 from $41. The average on the Street is $41.48.

“Given FM’s operating leverage to the increase in our medium-term copper price forecasts, we are increasing our target price .... Our target remains based on an equal weighting of 5.5 times ntm [next 12-month] EBITDA and 1.35 times NAV, now measured as at April 1st, 2023 (previously January 1st, 2023). Despite the increase to our target price, given the limited implied return from the current share price, we are downgrading FM,” he said.

* Teck Resources Ltd. (TECK.B-T) to “hold” from “buy” with a target of $52 from $52. Average: $55.38.

He also increased his target prices for other stocks in his coverage universe, including:

  • Capstone Copper Corp. (CS-T, “buy”) to $10 from $8.50. Average: $8.61.
  • Hudbay Minerals Inc. (HBM-T, “buy”) to $12.50 from $11.50. Average: $13.42.
  • Ivanhoe Mines Ltd. (IVN-T, “buy”) to $16 from $14.50. Average: $14.87.
  • Lundin Mining Corp. (LUN-T, “hold”) to $13.50 from $12.50. Average: $13.67.
  • Turquoise Hill Resources Ltd. (TRQ-T, “buy”) to $43 from $38. Average: $39.20.

“Given significant macro uncertainty, we prefer equities with clear growth trajectories and potentially meaningful positive catalysts in 2022,” said Mr. Baretto. “Our top picks at this time are: • CS — We believe the consummation of the Mantos merger and subsequent market insight into the deal rationale and synergies will result in a re-rating of the share price. • IVN — We believe the ongoing ramp-up of Kamoa-Kakula coupled with an expanded Phase 3 plan and drill results from the Western Forelands should be meaningful tailwinds for the share price.”


Citing its “premium” valuation, inflationary pressures and headwinds from the integration of the two new mines acquired in its merger with Chilean miner Mantos Copper Ltd., National Bank Financial analyst Shane Nagle lowered his recommendation for Capstone Copper Corp. (CS-T) to “sector perform” from “outperform” on Tuesday.

“With inflationary pressures on near-term operating costs we see some potential headline risks associated with integration of Mantoverde and Mantos Blancos where 2022 estimated C1 cash costs are expected to exceed US$2.50 per pound (NBF Estimates),” he said. “More than US$425-million remains to be spent on Mantoverde sulphide expansion and post-merger, 15 per cent of copper sales though to the end of 2023 are hedged at US$3.38 per pound.

Despite the downgrade, Mr. Nagle emphasized his “positive” long-term outlook for the Vancouver-based miner remains intact.

“Successfully integrating the Mantos assets will support Capstone’s 15-per-cent CAGR [compound annual growth rate] in copper production over the next five years driven by the Pinto Valley PV4 expansion focused on utilizing existing infrastructure to achieve higher mining and milling rates, dry-stack tailings at Cozamin expected to be commissioned through Q4/22 through H1/23, and additional colour and guidance for Mantos Blancos and Mantoverde,” he said. “Additionally, at Santo Domingo, scoping level work to identify and refine potential synergies between Santo Domingo and Mantoverde is underway, with opportunities identified in H2/22 and full feasibility in H1/23.”

The analyst maintained an $8 target for Capstone shares. The current average on the Street is $8.61.

“We weigh our positive long-term growth outlook for the combined company with near-term headwinds related to inflationary pressures and integration of Mantos assets,” Mr. Nagle said. “Shares have appreciated more than 600 per cent since upgrading to Outperform in July 2020 (compared to the S&P/TSX Global Base Metals Index at 180 per cent) and the company continues to advance several transformational catalysts, including continued optimization of Pinto Valley, ongoing expansion initiatives at Cozamin and leveraging synergies with Mantos assets to include the development of Santo Domingo. That said, with inflationary pressures driving costs higher, integration of Mantos assets to take some time/capital and impact of copper hedges, we see potential headwinds in CS maintaining its premium valuation of 1.06 times NAV and 5.2 times enterprise value/2023 estimated CF compared to copper peers at 1.03 times and 4.5 times respectively.”


Concurrently, Mr. Nagle said he expects first-quarter earnings season for base metal producers to be hampered by “soft” production results and the impact of rising inflation.

“Following discussions with management teams in our universe ahead of Q1/22 earnings, we expect higher costs in the quarter and anticipate several companies could increase cost guidance as a result of elevated diesel prices, ongoing shipping delays/logistical challenges and impact of Russia/Ukraine conflict on other key consumables within the industry,” he said. “We expect persistently high inflation to have an impact on the nearterm outlook as supply contracts are renegotiated, supply chain issues persist and consumable prices continue to rise.”

He pointed to several factors expected to lead to larger expense burdens, including “significantly elevated” ammonia nitrate prices as Russia is a key supplier, a jump in diesel prices that has also led to freight cost appreciation and higher suplhuric acid costs for cathode producers.

“Overall, it’s hard to see any producers without significant by-product credits being able to avoid an 10 per cent increase in cost guidance from numbers released in late-December/early-January,” said Mr. Nagle. “Adding to the impact of these cost pressures are several additional factors we expect will weigh on Q1 production results (several operations across our universe are in lower grade mine sequences to start the year (some by pushing mines harder at end of 2021), weather related impacts (including heavy rain in Brazil and regions of Africa), logistical challenges (including shipping related delays and/or CP rail strike in Canada), scheduled maintenance programs and COVID-19 related absenteeism).”

The analyst said there are few places for investors to “hide from negative headlines.”

“Within our coverage, only Sherritt (S-T, $1.10 target, “sector perform”) is expected to benefit from strong fertilizer, cobalt by-products which may ultimately lead to a reduction in cost guidance for the year,” he said. “Teck Resources (TECK.B-T, $65 TP (was $60), OP) has also pre-released Q1 coal sales which has been accurately reflected in Consensus estimates ahead of the quarter. Spot coking coal prices are also US$480 per ton (NBF 2022 estimate: US$375/t) providing additional tailwinds for the remainder of the year.”

Lowering his target prices for several equities in his coverage universe, Mr. Nagle said he is “materially” lower than consensus estimates for three companies:

* Copper Mountain Mining Corp. (CMMC-T, “outperform”) to $4.50 from $4.75. The average on the Street is $5.25.

“NBF Q2 EBITDA of $21-million (Consensus: $45-million),” he said. “We model lower grades at Copper Mountain Mine and throughput impacted by damage to secondary crusher in Q4/21. Despite anticipated challenges in Q1, we anticipate an updated mine plan for Copper Mountain (Q2/22) leveraging the large resource base and recent exploration efforts as well as a funding package for Eva (Q3/22).”

* Hudbay Minerals Inc. (HBM-T, “outperform”) to $12.50 from $13. Average: $13.42.

“NBF Q2 EBITDA of US$132-million (Consensus: US$205-million),” he said. “We continue to model lower grades from Pampacancha in Peru through to Q3/22 before ramping up. Q1 results are expected to be impacted by lower sales out of Manitoba (resulting from CP strike) carrying over into Q2. Looking forward we anticipate technical reports on Copper World (Q3/22) and 777 tailings project (Q1/23) to drive incremental value to our Base Case.”

* Taseko Mines Ltd. (TKO-T, “sector perform”) with an unchanged $3.25 target. Average: $3.35.

“NBF Q2 EBITDA of $49-million (Consensus: $56-million),” he said. “Gibraltar’s grades and recoveries remained lower in Q1/22 offset by higher sales making up for impact of flooding on shipments in Q4/21. Higher diesel prices and shipping contracts took effect later in the quarter driving operating costs higher. The key catalyst remains the Florence draft Underground Injection Control (UIC) permit and subsequent start of the public commentary period.”

Conversely, he raised his Teck Resources Ltd. (TECK.B-T) target to $65 from $60 with an “outperform” rating. The average is $55.38.


Scotia Capital analyst Orest Wowkodaw also expects “robust” first-quarter results from miners in the coming weeks.

“We do not anticipate material changes to 2022 production guidance but are wary of growing cost inflation and the resulting negative impacts to opex and capex guidance,” he said in a research report. “However, despite these inflationary impacts, we anticipate most miners to continue generating strong FCF, supporting improving shareholder return initiatives ahead.”

“Our Q1/22 EPS and EBITDA estimates appear somewhat mixed relative to current consensus expectations. Once again, positive PP adjustments are expected to serve as a tailwind for many. For the large and mid-cap producers, our EBITDA estimates are on average 4 per cent below consensus. However, our EBITDA estimates are 5 per cent above consensus for the small caps.”

Mr. Wowkodaw made target changes to four TSX-listed stocks on Tuesday.

He raised his targets for:

  • Hudbay Minerals Inc. (HBM-T, “sector outperform”) to $12.50 from $12. Average: $13.42.
  • Turquoise Hill Resources Ltd. (TRQ-T, “sector perform”) to $43 from $42. Average: $39.42.
  • Teck Resources Ltd. (TECK.B-T, “sector outperform”) to $64 from $63. Average: $55.38.

He lowered his Taseko Mines Ltd. (TKO-T target to $1 from $1.50 with a “sector underperform” rating. The average is $3.35.

“In our view, CCO-T, CIA-T, FCX-N, FM-T, IVN-T, and TECK.B-T all appear fairly well positioned heading into the Q1 reporting season,” he said.


Desjardins Securities analyst Gary Ho sees Chemtrade Logistics Income Fund (CHE.UN-T) poised to benefit from the “economic reopening plus considerable tailwinds underpinning ultra-pure acid and hydrogen .”

He assumed coverage of the Toronto-based maker of industrial chemicals with a “buy” recommendation, seeing its pivot to organic growth and operational efficiencies under new CEO Scott Rook “positively while continuing to monitor its elevated leverage.”

“Why we like the story. (1) Relatively recession-resistant as CHE tendsto overperform in a downmarket and underperform in an upmarket, but should benefit from reopening (regen acid—driving activity; merchant acid—industrial production/GDP; caustic soda —aluminum, pulp & paper),” said Mr. Ho. (2) The domestic semiconductor industry is expected to more than double over the next five years, driving growth in ultra-pure acid. (3) Commercialization of green hydrogen, starting with Prince George, but the larger opportunity is at Brandon (5 times the size of Prince George). (4) Focus on operational efficiencies—targets $10-million in annual savings. (5) Turning point? As CHE successfully drives organic growth and deleverages under new CEO Scott Rook, sentiment should improve.”

Mr. Ho raised the firm’s first-quarter EBITDA for Chemtrade to $75-million from $71-million, moving closer to the Street’s forecast of $77-million. He pointed to stronger results from its Electrochemicals segment stemming from a rally in all chlor-alkali molecules, including caustic soda and chlorine.

He said those gains could cause Chemtrade to revist its full-year earnings guidance, which would be a key catalyst for the stock.

Mr. Ho has a $9.50 target for its shares. The average is $9.39.

“Our positive thesis is predicated on the following: (1) economic reopening will drive EBITDA growth (naturally deleverages); (2) tremendous ultra-pure and hydrogen opportunities; and (3) management change leading to a valuation re-rate,” he said.


Citi analyst Alexander Hacking doesn’t expect any major surprises from North American gold producers during first-quarter earnings season with “production targets unlikely to be changed so early in the year and investors already primed higher cost guidance given increases in energy, explosives & freight in recent weeks.”

In a Tuesday research note, he raised his financial projections to align with a higher gold price forecast from the firm’s global commodity team.

“Citi’s global commodity team believes that gold prices moderate from fresh all-time highs hit in March but hold a high(er) range for the balance of 2022 as financial markets grapple with surging headline inflation, geopolitical uncertainty, and recession tail risks,” he said. “2022 forecast is $1,910 per ounce and 2023 forecast is $1,725 per ounce.”

He added: “Citi’s gold price forecasts still tilt to the bearish side vs spot (base case: $1,700/oz in 2H23 vs spot $2,000/oz) – but with a very wide bull-bear spread given all the macro volatility.”

With that view, Mr. Hacking raised his target prices for these stocks:

  • Agnico Eagle Mines Ltd. (AEM-N/AEM-T, “neutral”) to US$72 from US$60. Average: US$72.50.
  • Barrick Gold Corp. (GOLD-N/ABX-T, “neutral”) to US$28 from US$22. Average: US$27.56.
  • Newmont Goldcorp Corp. (NEM-N, NGT-T, “buy”) to US$100 from US$66. Average: US$73.87.

“Our preferred exposure remains NEM (rated Buy),” he said. “We acknowledge that GOLD now trades on a lower P/NAV multiple but expect NEM’s S&P500 premium to persist with generalist investors rotating out of growth. NEM offers investors sustainable exposure to gold with a solid mix of management, assets and capital return (3-per-cent dividend yield). Gold sector leadership remains in good hands with quality of management and capital allocation at the three N.America majors the best in 20 years. Consolidation seems likely to continue although we remain cautious unless there is a compelling rationale, e.g. management upgrade, district consolidation.”


In an earnings preview, Credit Suisse analyst Fahad Tariq also raised his target prices for a group of gold equities on Tuesday.

“Given the weaker Q1 production across the board, we expect companies will be messaging on improving production through the rest of the year, along with declining costs,” he said. “Assuming gold prices stay relatively flat, producers in our coverage will be generating more free cash flow in H2-22, at which point we would expect potential announcements of higher dividends. We also expect a cost update as gold companies provided 2022 cost guidance in February (or earlier), and since that time, energy prices have increased significantly. Therefore, we expect updated commentary on cost sensitivities at different oil prices, diesel hedges, and the potential for overall cost per ounce to be at the high end/above guidance. As a reminder, energy is typically 5-10 per cent of cash costs for gold miners.”

His changes include:

  • Agnico Eagle Mines Ltd. (AEM-N/AEM-T, “outperform”) to US$72 from US$65. Average: US$72.50.
  • Barrick Gold Corp. (GOLD-N/ABX-T, “outperform”) to US$28 from US$27. Average: US$27.56.
  • Franco-Nevada Corp. (FNV-N/FNV-T, “neutral”) to US$150 from US$146. Average: US$155.87.
  • Iamgold Corp. (IAG-N/IMG-T, “neutral”) to US$3.50 from US$3.30. Average: US$3.13.
  • Kinross Gold Corp. (KGC-N/K-T, “neutral”) to US$6 from US$5.50. Average: US$7.84.
  • New Gold Inc. (NGD-N/NGD-T, “neutral”) to US$1.70 from US$1.80. Average: US$1.98.
  • Triple Flag Precious Metals Corp. (TFPM-T, “outperform”) to $22 from $19. Average: $21.02.
  • Yamana Gold Inc. (AUY-N/YRI-T, “outperform”) to US$6.50 from US$6.25. Average: US$6.74.


National Bank Financial analyst Rupert Merer thinks higher power prices in Europe could lead to cash flow growth for Brookfield Renewable Partners L.P. (BEP-N, BEP.UN-T).

“Following the start of the military conflict in Ukraine, power prices have remained high across Europe,” he said. “We believe prices could remain higher in the future, with Europe looking to reduce its consumption of Russian natural gas. This should support future revenues for existing assets (BEP operates 3,700 MW in Europe) as well as for development assets.”

However, ahead of the May 6 release of its earnings report, he reduced his first-quarter funds from operations per unit forecast by 2 US cents to 42 US cents, above the 38-US-cent consensus, to account for lower-than-anticipated power generation from its s North American and Brazil hydro operations.

“Although we have modelled higher power prices in Q1, they could be stronger than our forecasts,” said Mr. Merer. “BEP’s results could also benefit from other gains realized on the sale of assets, which would introduce some moving parts. For the full year 2022, we have a slight decrease to our FFO forecast because of the interest charges on the recently issued $1 billion of debt on the Lievre facility and higher corporate costs related to an increase the share price. Once put to work, the excess capital raised from the Lievre facility should result in higher FFO forecasts.”

The analyst thinks that recent debt issuance could bring an update to BEP’s growth plans, noting: “In Q4, BEP highlighted 3.4 GW of projects that are construction ready or in advanced development, with a net $157-million in FFO potential (more than 10-per-cent growth), of which more than $20-million should reach COD by year-end. With Q1 results, among other things, we could hear about progress with construction on solar in India and repowering of its U.S. wind farm projects, which could contribute to results by year-end.”

Reiterating his “outperform” rating, Mr. Merer raised his target to US$41 from US$38 after increasing some long-term power price estimates across Europe, U.S and Canada. The average on the Street is US$40.89.


Expecting a “strong” copper price outlook to provide significant benefits, Stifel analyst Alex Terentiew raised Taseko Mines Ltd. (TKO-T) to “buy” from “hold” upon assuming coverage of the company on Tuesday.

“Proven operational viability, world-class jurisdictions, readily available funds to start construction, and a strong copper market backdrop ideally position Taseko to propel its growth trajectory by moving Florence into production,” he said. “Issuance to the public of Florence’s Underground Injection Control (UIC) draft permit and its subsequent 45-day public comment period are material catalysts that we are awaiting. We also anticipate issuance of the final UIC permit by the EPA later in 2022. With detailed engineering complete, procurement well advanced and Taseko’s balance sheet capable of funding this growth organically, we view our 2025 production start-up as achievable, ultimately resulting in Taseko’s consolidated copper production doubling to over 213 Mlb in 2026, up from our 113 Mlb forecast for 2022.”

He trimmed the firm’s target for Taseko by 5 cents to $3.70. The average is $3.35.

Mr. Terentiew also assumed coverage of Copper Mountain Mining Corp. (CMMC-T) with a “buy” recommendation and $5.90 target, up from $5.80 and above the $5.22 average.

“in today’s era of rising environmental, social and political pressures to reduce carbon footprints and increase the supply of renewable power, we view Copper Mountain’s current operating base and its significant growth pipeline as ideally positioned to fill the growing global need for more copper,” he said. “From its current base of 90 Mlb/yr, we see production doubling to 200 Mlb/yr, with a start-up of Eva in Australia in 2025, followed by more growth from an expansion, potentially a doubling or more, of the currently operating Copper Mountain mine in BC. With a healthy balance sheet and strong FCF being generated, we expect CMMC to primarily fund its growth both organically and with incremental debt capacity.”


Raymond James analyst Michael Shaw thinks a supportive macro environment in the energy sector is setting up the pipeline and midstream group for a “strong” first-quarter earnings season.

“While energy infrastructure companies, by design, have limited exposure to commodity prices, they will indirectly benefit from the move higher in energy prices as production volumes and asset utilization creep up,” he said. “This will support EBITDA generation and ‘return-on’ metrics from existing assets while also increasing the demand for new capacity. Furthermore, we expect that the pace of project sanctioning will not strain balance sheets.

“While the higher commodity prices have yet to entice producers to abandon their capital disciplines - at least en masse - there has been a clear response in production volumes. Canadian production – both gas and liquids – are testing recent production highs. Wellhead gas production has moved above 17 bcf/d for the first time since 2014 and condensate production reached an all-time high. The increase in volumes will push the utilization of existing midstream and pipeline assets, which should be supportive of 1Q results.”

Mr. Shaw thinks higher volumes are likely to lead to new project sanctioning in 2022, largely in the second half of the year. However, he thinks companies will not “return to meaningfully outspending cash flows - limiting the strain on balance sheets.”

Believing the strong macro conditions and growth outlooks are largely reflected in valuations already, he made a series of target price increases:

  • Enbridge Inc. (ENB-T, “market perform”) to $58.50 from $54.50. Average: $57.58.
  • Gibson Energy Inc. (GEI-T, “outperform” to $26.50 from $26. Average: $25.50.
  • Keyera Corp. (KEY-T, “outperform”) to $36.50 from $34. Average: $35.50.
  • Pembina Pipeline Corp. (PPL-T, “market perform”) to $49.50 from $45.50. Average: $48.83.
  • TC Energy Corp. (TRP-T, “outperform”) to $73 from $67.50. Average: $70.47.

“Our top pick in the midstream group, and our Top Pick for 2022, remains Keyera,” said Mr. Shaw. “Keyera recently hosted a positive investor day and has since been closing its valuation gap (see our post investor day note here). As its investor day just a few weeks ago, we do not expect a meaningful update or any operational surprises from the 1Q results. In our view, Keyera’s 2023 valuation still does not reflect the growth from the completion of the KAPS pipeline. With concerns around KAPS cost inflation and the outlook for the marketing segment addressed at the investor day, we expect KEY will continue to outperform.”


Scotia Capital’s Robert Hope thinks TSX-listed pipeline and midstream group are benefiting from a stronger commodity price environment, which he think will continue through 2022.

In a research report previewing earnings season, he also noted renewable power names “continue to be strong.”

“While they have softened recently, we continue to see strong investor interest in the group. The utility group has also been strong despite the inflationary environment and rising interest rates, as investors find their defensiveness attractive,” he said.

Mr. Hope made a series of target price adjustments:

  • AltaGas Ltd. (ALA-T, “sector outperform”) to $33 from $31. Average: $32.04.
  • Algonquin Power & Utilities Corp. (AQN-N/AQN-T, “sector perform”) to US$16.50 from US$15.50. Average: US$17.25.
  • Brookfield Infrastructure Partners LP (BIP-N/BIP.UN-T, “sector outperform”) to US$73 from US$68. Average: US$68.83.
  • Emera Inc. (EMA-T, “sector outperform”) to $69 from $65. Average: $63.23.
  • Enbridge Inc. (ENB-T, “sector perform”) to $62 from $58. Average: $57.58.
  • Fortis Inc. (FTS-T, “sector perform”) to $63 from $61. Average: $60.25.
  • Hydro One Ltd. (H-T, “sector perform”) to $34 from $32. Average: $33.61.
  • Keyera Corp. (KEY-T, “sector outperform”) to $38 from $37. Average: $35.50.
  • Pembina Pipeline Corp. (PPL-T, “sector outperform”) to $54 from $49. Average: $48.83.

“With the strong energy environment, we continue to prefer the more energy exposed midstream and pipeline group over the renewable power producers and utilities,” he said. “For the midstream group specifically, we see the greater potential for estimate revisions upwards as oil & gas producers could slowly return to growth as well as strong NGL marketing conditions. Key beneficiaries of higher NGL pricing are Pembina, AltaGas, Tidewater, and Keyera. For Q1/22, we are slightly ahead of consensus for Pembina. We also see the potential for further valuation expansion of the pipeline and midstream group, and overall, we raise our target prices for Enbridge, Keyera and Pembina. The shares of TransAlta [”sector outperform” and $16.50 target] have had a strong rebound recently, which we attribute to robust Alberta power prices and a rebound in renewable valuations. We continue to like the name and think Q1 will be strong, though not to the extent consensus is pricing in.”


In other analyst actions:

* Calling it a “sustainable growth story with new five-year outlook on deck,” Truist Securities analyst Beth Reed upgraded Lululemon Athletica Inc. (LULU-Q) to “buy” from “hold” with a US$495 target, up from US$390. The average on the Street is US$431.96.

“Valuation has moderated since our launch, and we expect a robust new 5-year financial outlook at the April 20th analyst day,” she said. “Combined with strong brand health and ongoing innovation, we believe LULU has momentum beyond the pandemic, driven by (1) consumer prioritization of health & wellness, (2) a growing TAM, (3) improved store traffic/inventory levels and (4) modest go-forward EBIT margin expansion. Further, we view LULU’s higher income customer base and pricing power as key assets in an inflationary environment.”

“Currently, shares trade around 35 times FY2 EPS and at a more modest 90-per-cent premium to the market. At a full valuation, we believed the business needed to operate near perfection for the stock to outperform, and now with expectations for MIRROR subsequently reset, we see current levels as an attractive entry point for what we view as a quality long-term growth story. In addition, given that apparel retail is set up for a more difficult 2022 than 2021, we would lean into names (such as LULU) that we believe will be able to pass on product cost inflation.”

* JP Morgan’s Jeremy Tonet raised his AltaGas Ltd. (ALA-T) target to $34 from $31, keeping an “overweight” rating. The average on the Street is $32.04.

* Barclays’ Raimo Lenschow cut his Lightspeed Commerce Inc. (LSPD-N, LSPD-T) target to US$42 from US$50, below the US$55 average, with an “overweight” rating.

“We believe Q1 will be a difficult quarter to call for many names. True, valuation levels are down, but we still have FX headwinds, macro headwinds (see moderating VAR survey results) and tougher comps ahead. We have confidence in XM and DDOG going into earnings while we’re more muted on well tested names like MSFT,” he said.

* Pointing to “better-than-expected global methanol prices stemming from recent geopolitical tensions and surging global energy values, Raymond James analyst Steve Hansen increased his Methanex Corp. (MEOH-Q, MX-T) target to US$58 from US$54 with a “market perform” rating. The average is US$56.17.

“We maintain our neutral view, drawing caution from: 1) methanol supply fundamentals that remain broadly unaffected by recent geopolitical events; 2) rising macroeconomic risks associated with the slowing global economy; 3) the more direct effect of China’s extreme lock-down measures; and 4) the recent surge in domestic natural gas prices,” he said. “We will continue to monitor accordingly.”

* Canaccord Genuity’s John Bereznicki cut his Questor Technology Inc. (QST-X) target to $1.70, below the average by a penny, from $2.10 with a “hold” rating.

“While we continue to believe Questor enjoys a secular growth opportunity, we remain on the sidelines until we see a durable financial recovery from the company,” he said.

* RBC’s Luke Davis raised his target for PrairieSky Royalty Ltd. (PSK-T) to $22 from $21 with a “sector perform” rating. Others making changes include: iA Capital Markets’ Matthew Weekes to $23.50 from $21.50 with a “buy” rating and Stifel’s Robert Fitzmartyn to $23.50 from $21 with a “buy” rating. The average is $22.10.

“PrairieSky posted strong Q1/22 volumes with oil/liquids trending favourably on increased industry activity. Leasing has been consistent, reaching record levels during the quarter. We expect this will continue to organically push royalty volumes higher through the balance of the year,” said Mr. Davis.

* Piper Sandler’s Brent Bracelin cut his Shopify Inc. (SHOP-N, SHOP-T) target to US$800 from US$900, maintaining an “overweight” rating. The average is currently US$959.61.

* In response to its premarket release of a mineral resource update on Monday, Eight Capital’s Ralph Profiti raised his Solaris Resources Inc. (SLS-T) target to $23.50 from $20 with a “buy” raitng. Others making changes include: National Bank Financial’s Shane Nagle to $22 from $20 with an “outperform” rating; Scotia Capital’s Eric Winmill to $19.50 from $18 with a “sector outperform” rating and RBC’s Alexander Jackson to $20 from $18 with an “outperform” rating.

“Solaris’ Warintza Project remains one of our favorite undeveloped copper projects and today’s mineral resource update confirmed the meaningful scale and above average grades at Central that, in our view, make the company an attractive take-out target. We revised our mine plan, adjusting for increased tonnage and production and reduced grades modestly to be inline with the update,” said Mr. Jackson.

* National Bank Financial’s Cameron Doerksen cut his TFI International Inc. (TFII-T) target to $142 from $160, maintaining an “outperform” rating. The average is $142.25.

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