Inside the Market’s roundup of some of today’s key analyst actions
Seeing “the risk reward outlook on the stock to be less compelling,” Evercore ISI analyst Mark Mahaney downgraded Shopify Inc. (SHOP-N, SHOP-T) to “in line” from “outperform” before the bell on Tuesday.
“Shares have surged almost 100 per cent year-to-date (though after declining 75 per cent in ‘22), are now trading at an intrinsically robust 11 times EV/Sales (with comps not clearly justifying a further re-rating), and have reach out $69 price target,” he said. “We believe the year-to-date surge in SHOP shares - driven by a stablization in fundamentals, material new cost measures, and a strategic step-away from a fully integrated shipping/logistics - is well warranted. But we see few clear catalysts going forward. Hence the downgrade.”
Mr. Mahaney’s US$69 target exceeds the average target on the Street of US$62.45, according to Refinitiv data.
Citi analyst Alexander Hacking sees the potential for North American large-cap gold miners to rebound moving forward, predicting a “stronger” second-quarter earnings season.
“Gold equities have underperformed the underlying year-to-date, which is somewhat hard to explain given that cost inflation appears to have peaked,” he said. “Gold is up 7 per cent, with Newmont down 28 per cent, Barrick down 9 per cent and Agnico down 1 per cent. The stocks are now trailing gold on a 5-year view.
“Gold equities often offer positives vs the gold price: dividends, growth, and leverage. The biggest challenge is cost inflation, which can eat into margins. The stocks underperformed in 2022 as gold prices fell and costs increased by $100-150 per ounce. But 2023 was expected to be different with both NEM and GOLD guiding costs roughly flat.”
In a research report released late Monday, Mr. Hacking updated his financial projections for the companies in his coverage universe ahead of earnings season, noting Citi “remains broadly constructive gold, with potential for a dovish pivot at Jackson Hole for September FOMC.”
“Citi’s global commodity team sees an opportunity to structurally ‘buy the dip’ in gold by end-3Q or early 4Q 2023 as U.S. inflation data starts trending downwards,” he said. “The Fed is likely to hike in July but maintain optionality. The yellow metal is projected to average a record $1,950+ this year, possibly rising to $2,100-2,200 in 1H’24.
“A surprise dovish pivot at Jackson Hole for the September FOMC would add confidence to the bullish medium-term gold market outlook. That could involve a clear signal for an end to the hiking cycle. Physical gold demand from China consumption and EM central banks are also price-supportive factors this year. Meanwhile, 2023 still shows resilient signs of stable physical and retail jewelry consumption.”
Mr. Hacking opened a 90-day “catalyst watch” on Agnico Eagle Mines Ltd. (AEM-N, AEM-T), predicting the Toronto-based company will “outperform on strong 2Q23 results and potential for expectation on Fed hikes to soften.”
“Agnico is arguably the highest quality name in the space given its assets and management. Production is predominately in Canada, with strong reserve life & expansion potential,” he said.
“Agnico is an excellent company in our view, with high quality assets and a strong operational track record. The company has demonstrated superior execution over the past decade. The acquistion of Kirkland Lake added low cost ounces in good jurisdictions. We currently see more upside than downside in the stock.”
He maintained a “buy” recommendation and US$65 target for Agnico shares. The average target on the Street is US$67.08.
“Our top pick remains AEM (open positive catalyst watch), and we maintain a Buy on NEM as the ‘go-to’ gold name for U.S. generalists (although skeptical on the NCM value proposition),” he said. “GOLD remains disciplined and discounted, although without a clear re-rating catalyst.”
“Positive factors include low operating costs, a stable balance sheet, new management with a strong operating track record, potential upside from synergies at the new Nevada JV,” the analyst said. “Negative factors include some challenging legacy assets, geopolitical risk, challenges to grow production from such a large base and limited FCF. On balance we see equal upside and downside at current levels.”
Citing “persistent drought conditions across the Canadian prairies that likely portend lower crop yields and reduced farmer demand for new storage infrastructure in 2H23/1H24,” Raymond James analyst Steve Hansen downgraded Ag Growth International Inc. (AFN-T) to “market perform” from “outperform” previously.
“While AGI’s globally-diverse backlog remains flush and other key jurisdictions have fared much better (Brazil, India, U.S.), we’re mindful that Canada still represents a core jurisdiction (approximately 25 per cent of revenue) and could introduce modest headwinds later this year,” he said. “As such, while we continue to admire AFN’s long-term outlook, we’re taking this opportunity to capitalize on recent share price appreciation and step to the sidelines until better crop visibility emerges.”
After making “modest” adjustments to his forecast to reflect the company’s “near-record backlog and the diverse regional outlooks,” Mr. Hansen cut his target for its shares to $64 from $70. The average is $72.40.
“We are also constructive on the company’s ongoing strategic initiatives (i.e. product transfers) that will likely provide a macro offset,” he noted.
Seeing it “well positioned” to outperform peers moving forward, Credit Suisse’s Karen Short upgraded Alimentation Couche-Tard Inc. (ATD-T) to “outperform” from “neutral” on Tuesday.
“The reasons for our rating upgrade are as follows: 1) ATD operates in the highly-resilient c-store industry, which has become increasingly favorable for scale players such as ATD as an increasing cost-to-operate environment has pressured smaller, less sophisticated operators; 2) Gas margins – a key driver of profitability – now appear to be structurally elevated from pre-pandemic norms, and ATD now has greater visibility/control over its fuel pipeline through enhanced sourcing capabilities ; 3) Industry wide mix shift trends from tobacco into food should be margin-accretive, and ATD is expanding its food offerings (including significant expansion of its higher-margin private label line); 4) Expense growth is slowing and labor challenges have somewhat abated, and 5) ATD still has significant runway for openings, acquisitions, and growth in new product lines despite being a far more established and mature retailer vs. other growth stories in our coverage,” she said.
Ms. Short hiked her target to $85 from $65. The average target on the Street is $79.05.
In a research report previewing financial results for base metals producers titled Keep the Faith, Canaccord Genuity analyst Dalton Baretto said the second quarter was dominated by “uncertainty,” pointing to a “a tug-of-war between macro and micro factors at play.”
“The first two months of the quarter (through May 25) saw a steady decline in commodity pricing across the board, a continuation of the macro-driven trend that began in early February,” he said. “Against this backdrop, however, physical markets remain somewhat more robust (particularly for the non-ferrous group). Demand appears better than the economic indicators would suggest, while our conversations with management teams of the companies we cover indicate that the supply issues from Q1 were more persistent than expected. These relatively robust underlying fundamentals for copper, in particular, helped reverse some of the April/May price declines in June.
“Looking out into the rest of 2023, we expect commodity prices to be range-bound at current levels over July and August before seeing support in September given typical demand seasonality and as Chinese stimulus efforts take hold, the USD plateaus as the Fed completes its hiking cycle, and global macro sentiment improves. That said, we believe non-ferrous metals are poised to outperform the ferrous complex, given elevated steel inventories globally and potential cuts to Chinese steel production in H2/23. We continue to view more aggressive policy support from the Chinese government as a non-trivial probability that could serve as a significant tailwind despite the broader macroeconomic picture.”
Despite that near-term volatility, Mr. Baretto sees “structural positive changes” for key industrial commodities through the remainder. Those include: “an acceleration of the decarbonization trend as the world (particularly the developed world) moves to improve energy security and reduce its dependence on fossil fuels imported largely from kleptocracies; stockpiling of strategic minerals as a bipolar economic world evolves; inflationary and demand impacts from the restructuring of supply chains and onshoring of manufacturing capabilities as globalization reverses course.”
“Given the high-level macro/commodity thesis... our equity positioning preference is for names that: are copper focused, preferably with a meaningful gold by-product credit (we are constructive on gold in the current macro environment); have near-term organic growth profiles; have definable potential positive catalysts on the horizon,” he added.
The analyst made a series of target price adjustments heading into earnings season. That included changes to his top picks, which are:
Growth and copper price leverage: Capstone Copper Corp. (CS-T, “buy”) to $9 from $8.50. The average is $7.77.
“We continue to like CS for its strong, fully funded, low-risk near-term organic growth profile via the MVDP project (which is approaching completion in Q4/23, is on time and on budget thus far, and will add 55 per cent to CS’s production profile once fully ramped up). We also like the multiple capital-efficient expansion opportunities available to the company in both Chile and Arizona, CS’s leverage to copper prices, and its profile as an attractive acquisition target in a copper-focused M&A market that is heating up. We point to the anticipated completion of the MVDP project late in the year along with various technical studies underway at the different assets as potential positive catalysts over 2023,” he said.
Value and FCF yield: Hudbay Minerals Inc. (HBM-T, “buy”) to $11 from $11.50. Average: $10.06.
“We like HBM for its current focus on free cash flow generation as well as its exposure to strong current gold prices and the strategic implications of the CMMC acquisition,” he said. “Our estimates indicate that the company will generate $1.11 per share in FCF this year, implying a FCF yield of 21 per cent. In addition, we note that HBM trades at just 1.7 times our 2024 EBITDA estimate and 0.40 times NAV, vs. the peer group averages of 5.0 times and 0.88 times, respectively. We point to the pending PFS and permitting milestones at Copper World as potential positive catalysts, possibly with a JV agreement to follow late in the year.
Exploration and development: Solaris Resources Inc. (SLS-T, “speculative buy”) with a $14 target (unchanged). Average: $19.43.
“In our view, SLS controls one of the best copper projects still in the hands of a junior mining company, with world-class scale and grades coupled with proximity to infrastructure that should drive a capital-efficient build and lower operating costs. We look forward to exploration results, both those that extend the high-grade starter pit to the north-east as well as those that better define the Warintza SW and Patrimonio deposits. We expect 2023 exploration efforts to culminate in a meaningful resource upgrade either late this year or early next year. In the interim, we believe there is a non-trivial probability of a strategic investment in the company by a major miner or smelter this year, which could be a significant catalyst for the shares. That said, we also flag a pending Presidential election (1st round on August 20th), which while expected to be a non-event in the end, could generate some negative country headlines in the run-up to the event. Despite its compelling attributes, SLS trades at 0.43 times NAV, in line with the peer group average,” he said.
Mr. Baretto’s other changes include:
- Faraday Copper Corp. (FDY-T, “speculative buy”) to $1.50 from $1.75. Average: $1.75.
- Filo Corp. (FIL-T, “speculative buy”) to $35 from $36. Average: $32.28.
- First Quantum Minerals Ltd. (FM-T, “buy”) to $38 from $39. Average: $34.68.
- Ivanhoe Mines Ltd. (IVN-T, “buy”) to $15 from $15.50. Average: $16.04.
- Lundin Mining Corp. (LUN-T, “buy”) to $12.50 from $12. Average: $11.51.
- Teck Resources Ltd. (TECK.B-T, “buy”) to $64.50 from $70. Average: $67.33.
- Titan Mining Corp. (TI-T) to 40 cents from 55 cents. Average: 55 cents.
Ahead of second-quarter earnings season for Canada’s real estate sector, National Bank Financial’s Matt Kornack and Tal Woolley expect the trend of similar returns regardless of asset classes to continue.
“Year-to-date price performance across the asset classes has evened out expected total returns, despite target cuts across our universe,” he said. “Mean returns for multi-family (up 18 per cent), retail (up 18 per cent), industrial (up 18 per cent) and seniors housing/healthcare coverage (up 14 per cent) are similar. We see opportunities in each of these segments and would recommend a balanced portfolio of our highest total return names across asset classes. At this point in time, apart from office (total return expectation of 9 per cent), we are seeing high occupancy rates and solid rent growth outlooks, driven by limited development and immigration-fuelled demand (now being seen in commercial, not just residential uses).”
In a report released Tuesday, the analysts lowered made broad target price reductions by an average of 8 per cent to equities in their coverage universe “as rates remain elevated.” Their funds from operations per unit projections slid by an average of 1 per cent due largely to reduced transaction activity and higher financing costs.”
Changes to their “focus ideas” are:
Multi-Family: Minto Apartment REIT (MI.UN-T, “outperform”) with a $18 target, down from $19. The average on the Street is $19.23.
Analysts: “Demographic tailwinds are broadly favourable for our Canadian apartment coverage universe with a supply / demand imbalance, particularly for affordable housing options. That said, given recent relative trading performance, we continue to see a valuation disconnect in two names that look attractively priced relative to their growth profiles and portfolio quality, namely MI and KMP. Minto in particular has been dogged by capital allocation questions, which has improved post 5 th+Bank contract termination, in our view showing restraint given cost of financing concerns. Temporarily higher interest rates on variable rate debt have weighed on performance; however, the bulk of this exposure has/is in the process of being refinanced, which will provide better clarity on earnings. The result is an implied cap rate at current trading levels that is disconnected in our view from the underlying growth prospects and the relative portfolio value.”
Retail: Primaris REIT (PMZ.UN-T, “outperform”) with a $16.50 target, down from $17.50. Average: $17.19.
Analysts: “Primaris, the largest non-pension owned operator of enclosed malls in Canada, remains our highest total return idea within the retail asset class. While we appreciate the operating risk of enclosed malls is higher compared to its grocery-anchored peers, we are of the view investors are more than sufficiently compensated for this risk by significantly lower financial risk versus peers that is not reflected in its heavily discounted valuation. First, PMZ is one of the least financially burdened REITs in the universe, possessing a unique cash flow/capital allocation model allowing it to finance its entire capex and distribution commitments from its operating cash flows. Second, units trade at a wide discount to GOC yields, and on average trade at300 basis points in excess of the peer group. Therefore, PMZ offers the largest margin for error, as the units imply a pessimistic future for enclosed mall cap rates, a significant deterioration of NOI (despite improving occupancy post-COVID), or some combination of both, regardless of improving operating metrics. PMZ has the potential to grow/improve its portfolio in the current market environment.”
Industrial: Dream Industrial REIT (DIR.UN-T, “outperform”) with a $17.50 target, down from $18.50. Average: $17.27.
Analysts: “Our highest total return to target in industrial goes to Dream Industrial as the REIT remains relatively inexpensive vs. its asset exposure. On the latter, DIR is the best way to get exposure to the strong GTA/GMA industrial markets and we view it as the closest proxy for an urban Canadian play with a portfolio primarily located in higher barrier to entry markets. The current implied cap rate represents a positive spread to financing costs, notwithstanding a still juicy MTM opportunity providing the best organic growth profile across the Canadian peer set.”
Seniors Housing/Healthcare: Chartwell Retirement Residences (CSH.UN-T, “outperform”) with a $10.50 target, down from $11. Average: $11.50.
Analysts: “Our highest total return to target within our seniors housing/healthcare coverage is Chartwell. Mid-quarter occupancy updates have been bullish, and the expected post-COVID occupancy improvement appears to be underway: CSH met its June occupancy forecast of 79.9 per cent (up 70 basis points montho-over-month, up 190 bps year-over-year) and revised its July forecast 20 bps higher to 80.3 per cent (40 bps month-over-month, 220 bps year-over-year). CSH forecasts August same-property occupancy to reach 80.8 per cent (up 50 bps month-over-month, 220 bps year-over-year), the first time closing above the 80-per-cent level since December 2020. This is the second consecutive forecast representing a bullish outlook for CSH’s occupancy and adds further support to our view that interest in retirement living is picking up and a rebound is taking shape. CSH also indicated that year-to-date permanent move-in activity has exceed the same period in 2022 and the three-year pre-pandemic average by 10 per cent and 8 per cent, respectively. Moreover, we think the long-term demand fundamentals driven by known, demographic tailwinds have not faded. New supply has not kept up due to construction cost inflation, interest rates and skilled labour resulting in fewer starts, just as the demand curve is posed to accelerate with the leading edge of the Boomer wave now in its late 70s.”
Office: Allied Properties REIT (AP.UN-T), “outperform”) with a $24 target, down from $27.50. Average: $28.93.
Analysts: “Our highest total return to target in the office sector is Allied, given the REIT’s relative asset quality and capital structure vs. an increasingly tempting valuation. Post the sale of its UDC portfolio, Allied’s implied cap rate of 8 per cent provides a wider spread to financing costs (10-yr bond yield is 6.50 per cent now) than is achievable across most REITs today, while benefitting from a flight to quality more broadly in regard to operations. Liquidity from the UDC sale largely funds the REIT’s remaining development commitments while retiring near-term debt maturities limiting Allied’s need for incremental capital over the forecast period (which is particularly favourable given the REIT’s current cost of capital). Allied trades at a depressed valuation of 9 times FFO and a 27-per-cent discount to NAV, which we think provides enough of a cushion to own the name at current levels.”
Diversified: H&R REIT (HR.UN-T, “sector perform”) with a $11.25 target, down from $12. Average: $13.92.
Analysts: “Within the diversified group, H&R remains our top focus idea, driven by earnings growth exposure to multi-family assets in growing U.S. markets and industrial development lease-up around the GTA combined with a better balance sheet and limited office maturities. However, recent governance and management issues have weighed on the stock and will likely continue to do so in the context of a muted outlook for transaction activity for the balance of 2023. While we think H&R should trade at a narrower discount, investors are cautious on the pace of reaching strategic milestones considering more challenged transaction markets.”
Analysts: “The countercyclical nature of demand for affordable housing has us anticipating MHC will post healthy SPNOI growth that was featured in Q1 results (up 6.3 per cent). An operational update provided by U.S.-listed peer UMH Properties Inc. that featured Q2 SPNOI of 8.6 per cent provides a reassurance to this assessment. High borrowing rates have put housing affordability further out of reach, while also throttling the affordable housing supply across the United States. Due to this, we anticipate MHC will be able to pass on reasonable rent increases to its tenants, given the pricing umbrella offered by more expensive alternative housing options in their markets. These rentals typically cost $200-400 per month more than MHC’s product, and when considered on an annualized basis represent a proportionately larger share of a MHC’s resident’s household income.”
RBC Dominion Securities analyst Christopher Carril is forecasting ”another solid top-line” in the second quarter for North American fast food restaurants “though moderating relative to the 1Q as comparisons further ‘normalize.’”
For Restaurant Brands International Inc. (QSR-N, QSR-T), the parent company of Tim Hortons and Burger King, he thinks investor focus will remain on the “company’s and franchisees’ progress toward improving the health and profitability of QSR’s systems, along with brand momentum and development.”
Mr. Carril is estimating earnings per share of 77 US cents, a penny higher than the consensus forecast on the Street and flat year-over-year.
“For Tims Canada, we believe that continued execution against the current iteration of the Back to Basics strategy — focusing on the quality of TH Canada’s food and beverage offerings, along with increasing digital engagement — should support continued solid comp performance during the 2Q (we model TH Canada comp growth of 7.5 per cent, vs. consensus of 6.6 per cent),” he said. “In addition to ongoing cold and PM daypart momentum, we see incremental opportunities to drive hot brewed coffee sales with increased mobility, as well as further upside from digital sales. On BK US, we expect investors to be focused on the brand maintaining underlying demand momentum in the 2Q (following sequential quarter-over-quarter improvement in transactions last Q), as it continues to execute against its “Reclaim the Flame” strategy (we model BK U.S. comp growth of 7.0 per cent, vs. consensus 5.6 per cent.
“Looking ahead, management expects to begin seeing tailwinds from near-term capital investments (i.e., indoor digital menu boards and POS systems, matched by dollar-for-dollar franchisee investments in kitchen equipment and property improvements) beginning in the 2H23. Lastly, for Popeyes US, we will be listening for detail around progress against the brand’s new, multi-year strategic plan (i.e., “Easy to Love”), focused on areas such as operational efficiency, menu innovation and digital. On development, recall that management expects 300-400 BK US closures during 2023 (incl. low volume and insolvent restaurants) to have some negative impact on year-over-year unit growth, however, QSR remains optimistic about accelerating development and net new store growth in 2023 (more 2H-weighted), aided by areas of opportunity across the portfolio globally, including improvement in China.”
Reiterating his “outperform” recommendation for Restaurant Brands shares, Mr. Carril increased his target by US$2 to US$86 per share. The average target on the Street is US$75.78.
“We continue to view QSR as our top pick among the global franchised fast food group. We see potentially improving Burger King US trends, accelerating development and shifts in capital allocation (toward growth investments and reduction in leverage) driving stock performance. Relative valuation for QSR remains compelling (18 times 2024 estimated EBITDA, versus global peer average of 18.2 times), particularly as we are taking a more cautious stance on the overall group,” he said.
Elsewhere, Truist Securities’ Jake Bartlett raised his target to US$89 from US$80 with a “buy” rating.
“The Truist Card Data adjusted est. for 2Q23 US Burger King system sales of $2.81-billion is 3.7 per cent above consensus. We are raising our 2Q23 U.S. BK SSS [same-store sales] to 7.5 per cent, from 6.0 per cent, above consensus of 5.6 per cent. The strong implied 2Q23 results, following a solid BK U.S. SSS beat in 1Q23 (8.7 per cent vs. cons. of 6.0 per cent), gives us increased confidence in the BK U.S. turnaround. We are increasing our estimates and PTs for QSR,” he said.
Previewing earnings season for diversified industrials in a note titled If our coverage universe had a Facebook status it would be “It’s Complicated”, Stifel analyst Ian Gillies made a series of target price tweaks. They are:
- Adentra Inc. (ADEN-T, “buy”) to $45.50 from $47. The average on the Street is $43.79.
- Badger Infrastructure Solutions Ltd. (BDGI-T, “buy”) to $47.50 from $49. Average: $37.39.
- Doman Building Materials Group Ltd. (DBM-T, “hold”) to $7.75 from $8. Average: $7.54.
- Mattr Infratech (MATR-T, “buy”) to $22 from $21. Average: $20.89.
- Neo Performance Materials Inc. (NEO-T, “hold”) to $8 from $8.25. Average: $12.65.
“It is a complex time in the business cycle, with roughly half of our companies indicating solid backlogs, strong year-over-year revenue growth in 2023 and improving margins,” said Mr. Gillies. “However, macro indicators are suggesting a slowdown could be forthcoming in the latter part of this year or next year - albeit from a very robust level of activity. Moreover, there are certain pockets of the industrial economy which we expect to remain strong in the face of a such recession due to reasons such as elevated government spending for infrastructure and greening of the grid, housing supply/demand imbalances in North America and increasing auto production. As a result, stock picking remains paramount. We continue to have a constructive outlook for our coverage universe given the mixture of EPS growth and discounted valuations. Our Top Idea is still Stantec. On the mid and small cap side, we continue to find ADEN, BDGI and MATR attractive.”
In other analyst actions:
* Barclays’ Brandon Oglenski reduced his Canadian National Railway Co. (CNR-T) target to $165 from $175 with an “equal-weight” recommendation. The average is $165.71.
* Pointing to cost overruns at its Genesee Repowering Project, National Bank’s Patrick Kenny cut his Capital Power Corp. (CPX-T) target by $1 to $52, remaining above the $51.23 average, with an “outperform” rating ahead of the release of its quarterly results.
* Roth MKM’s Matt Koranda bumped his target for Kits Eyecare Ltd. (KITS-T) to $7 from $6.50 with a “buy” rating. The average is $7.33.
* Credit Suisse’s Fahad Tariq raised his Lundin Mining Corp. (LUN-T) target to $12, above the $11.51 average on the Street, from $11 with a “neutral” rating.
* Haywood’s Neal Gilmer lowered his Organigram Holdings Inc. (OGI-T) target to $3 from $5 with a “hold” rating, while Jefferies’ Owen Bennett cut his target to $4.95 from $6 with a “buy” rating. The average is $4.93.
* In response to the release of its quarterly results after the bell on Monday, CIBC’s Jamie Kubik raised his Prairiesky Royalty Ltd. (PSK-T) target to $29.50 from $28.50 with an “outperformer” rating. Others making changes include: RBC’s Luke Davis to $26 from $25 with a “sector perform” rating, Canaccord Genuity’s Mike Mueller to $24.75 from $23.75 with a “hold” rating and TD Securities’ Aaron Bilkoski to $24 from $23 with a “hold” rating. The average target on the Street is $25.72.
“PrairieSky’s quarter was negatively impacted by Alberta wildfires and prior period adjustments, though largely weighted to natural gas,” said Mr. Davis. “The liquids business continues to exhibit strength with new leasing and spud activity predominantly oil weighted. Our Sector Perform recommendation remains unchanged with our price target increased to $26/share given cash flow is primarily driven by liquids with PrairieSky poised to benefit from increasing heavy oil drilling activity.”
* Evercore ISI’s Thomas Gallagher increased his Sun Life Financial Inc. (SLF-T) target to $76, exceeding the $73.43 average, from $73 with an “outperform” rating.
* Following a visit to its Eagle mine in the Yukon, Desjardins Securities’ John Sclodnick raised his target for Victoria Gold Corp. (VGCX-T) to $16.50 from $16 with a “buy” rating. The average is $16.25.
“Overall, our confidence in the operational turnaround increased, supported by improved production results over the first two quarters of 2023,” he said. “We see potential for the company to hit the higher end of its production guidance range of 160‒180koz. We have also updated our model to factor in the 2Q production results announced on July 5, which led to the slight increase in our target price.”