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

Though it now possesses a higher valuation that “better reflects accelerating growth through 2023,” RBC Dominion Securities analyst Drew McReynolds continues to view Thomson Reuters Corp. (TRI-N, TRI-T) “as a low-risk double-digit total return compounder.”

Accordingly, following Tuesday’s release of better-than-anticipated first-quarter financial results, he maintained its view of the stock as “an attractive core holding.”

“While valuation at 18.9 times FTM EV/EBITDA [forward 12-month enterprise value to earnings before interest, taxes, depreciation and amortization] is at the high end of the post-F&R historical range of 12.5 times-18.9 times, we believe recent multiple expansion can be sustained given accelerating organic revenue growth to 5-6 per cent by 2023 alongside: (i) significant margin expansion with EBITDA margins approaching 40 per cent; and (ii) rising EBITDA-to-FCF conversion given easing capex intensity,” said Mr. McReynolds in a research note released Wednesday.

“As such, we expect investors to benefit from 9-per-cent annual NAV growth and high-single-digit/low-double-digit annual dividend growth making Thomson Reuters a low-risk, double-digit total return compounder with further upside potential, in our view, should anticipated tuck-in acquisitions and/or divestitures prove accretive.”

Mr. McReynolds emphasized the company has built a “degree of conservatism” into its 2021 outlook, which includes revenue rising between 3.5 per cent and 4 per cent from a previous range of 3 per cent to 4 per cent, citing “pockets of COVID-19 pressure outside the U.S., higher costs (including travel and entertainment) in H2/21 with reopening, a seasonally impactful Q4/21, and managing the Change Program.”

“Nevertheless, given a strong Q1/21 and underlying momentum, we see potential for another uptick in the current growth and margin outlook,” the analyst said.

After raising his revenue and earnings estimates for 2021 and 2022, Mr. McReynolds increased his target for Thomson Reuters shares to US$104 from US$101, maintaining an “outperform” recommendation. The average on the Street is US$97.77, according to Refinitiv data.

Elsewhere, citing gains thus far in 2021, CIBC World Markets analyst Robert Bek cut its rating to “neutral” from “outperformer” with a US$102 target, rising from US$95.

“We are encouraged by the Q1/21 results and expect continued investor support for the ongoing change program given recent results and the company’s track record,” said Mr. Bek. “While the margin expansion coupled with organic revenue growth has rightfully led the stock to multiple expansion, we expect more limited upside potential from current levels.

“We increase our FY22 EBITDA estimate on visible traction of cost-saving initiatives and continued revenue momentum; our Neutral stance on the name is stemming from our view on limited valuation gains from here.”

Conversely, CFRA raised the stock to “buy” from “hold” with a US$105 target, up from US$95.

Other analysts making target adjustments include:

* BMO Nesbitt Burns’ Tim Casey to US$130 from US$125 with an “outperform” rating.

“Thomson posted a strong quarter with better-than-expected growth out of the Big 3 and a raised guide for F2021,” said Mr. Casey. “Margins expanded significantly (3.7ppt) but we expect that to moderate as Change Program spending accelerates in Q2 and H2. The company is well on track to meet or exceed its F21 targets and is positively set up through 2023 as revenue accelerates and operating leverage kicks in. We continue to see multiple catalysts for TRI in the short and medium term to warrant a premium valuation.”

* Canaccord Genuity’s Aravinda Galappatthige to US$102 from US$95 with a “buy” rating.

“A pushback against TRI sometimes is around valuations especially as TRI’s EV/EBITDA multiples rise into the high teens,” he said. “We believe that prudent investors should be looking at opportunistic entry points, either on account of market movements or other external factors (e.g. swings in LSEG share price). We note TRI has demonstrated that alongside its growth credentials, it is also a more defensive business than perhaps most investors recognize, and we argue more so compared to its peers. In fact, its financial performance through the pandemic reflected this. We also realize that TRI’s optical financial results would be somewhat moderated in the near term by investments related to the change programme. We suspect that this could produce pockets of entry points for patient investors.”

* Scotia Capital’s Paul Steep to US$97 from US$91 with a “sector perform” rating.

“Our thesis on TRI remains that the firm is working to reposition itself as a higher-growth software business in its core markets, supported by a substantial content engine. We believe that many of the initiatives implemented by TRI during its transformation are set to take hold over the next several years as it seeks to deliver stronger organic revenue and FCF per share growth. Our view is that, as a result of the pandemic, key trends could accelerate (e.g., increased investment in productivity-related software, an ongoing shift away from printed products) as clients adapt their operations,” said Mr. Steep.

* JP Morgan’s Andrew Steinerman to US$99 from US$91 with a “neutral” rating.

* TD Securities’ Vince Valentini to $130 (Canadian) from $125 with a “buy” rating.

* National Bank Financial’s Adam Shine to $128 from $122 with an “outperform” rating.


After it raised its full-year profit guidance and swung to a bigger than expected quarterly profit late Monday, a group of equity analysts on the Street raised their target prices for shares of Nutrien Ltd. (NTR-N, NTR-T).

Those making changes include:

* Raymond James’ Steve Hansen to US$75 from US$65 with a “strong buy” rating.

“We are increasing our target price ... based upon the firm’s solid 1Q21 print and our increased confidence in global Ag fundamentals, farmer input demand and, ultimately, NPK prices,” said Mr. Hansen. “Coupled with Nutrien’s high-quality global Agribusines franchise, solid balance sheet, and healthy FCF, we see outsized growth and significant earnings leverage on the horizon.”

* BMO Nesbitt Burns’ Joel Jackson to US$65 from US$62 with an “outperform” rating. The average on the Street is US$65.60.

“Amid a strong crop price dynamic, our target price rises to approximately 9.5 times 2021/22 estimated EV/EBITDA assuming peak-ish earnings around sub-$5B EBITDA as we conservatively assume fertilizer prices moderate into 2022,” he said. “This is despite us slightly lowering 2021 estimates (though expecting slightly better than $4.65-billion guidance and now modelling a narrower 2023 drop-off). And there is the Jansen approval risk. So while upside may be starting to be realized, ag is strong, Retail is resilient, nitrogen floors/ceilings have lifted, and Americas potash strength seems set to continue this year.”

* CIBC’s Jacob Bout to US$66 from US$65 with an “outperformer” rating.

“NTR reported a solid Q1/21 supported by strong results across all segments (particularly, Retail and Potash) and raised 2021 guidance (raising expectations for all segments, but Nitrogen in particular),” said Mr. Bout. “We are lowering our Q2/21 estimates slightly due to the early spring (having a pull-forward effect in Q1/21), but are increasing our H2/21 and 2022 estimates to account for better Nitrogen, Potash and Retail assumptions. In our estimation, the robust ag. cycle we are currently seeing will continue through 2022 (note, forward 2021-end/early-2022 corn futures are at ~$6/bu.). The new CEO, Mayo Schmidt, did not provide many new details on a potential shift in longterm strategy (but we expect more discussion on strategy at NTR’s investor day in June).”

* Scotia Capital’s Ben Isaacson to US$65 from US$63 with a “sector outperform” rating.

“It’s hard to find many flaws in what was operationally a near-perfect quarter,” he said. “Going forward, the outlook for potash, retail, and nitrogen all remain strong, even as we enter seasonal weakness in nitrogen. The guidance raise to $4.4-billion to $4.9-billion ($4.0-billion to $4.5-billion previously) makes more sense given: (1) the current dynamic in both agriculture and fertilizer markets; and (2) NTR’s path toward mid-cycle EBITDA of $5.5-billion in ’25. This will undoubtedly force the Street to move estimates higher, setting up near-term outperformance. While questions remain regarding Mr. Magro’s abrupt departure, it’s now time to move on, with a focus on how Mr. Schmidt will enhance shareholder value. That said, Mr. Schmidt begins his tenure with a wonderful problem - allocating capital from what will be exceptional FCF over the mid-term. And, not just in ’21, but over what is increasingly looking like an extended bull-cycle in agriculture, with corn at $4.50/bu (50% above marginal cost) or higher through 2024! With little to spend in N+K, and no real appetite for P, we expect the focus going forward will be on accretive M&A (retail by default) + buyback.”

* JP Morgan’s Jeffrey Zekauskas to US$65 from US$63 with an “outperform” rating.

* Berenberg’s Adrien Tamagno to US$70 from US$68 with a “buy” rating.


While its first-quarter production and financial results exceeded his expectations, ATB Capital Markets analyst William Lacey warned Suncor Energy Inc. (SU-T, SU-N) is likely to feel negative consequences of the “significant” improvement in oil prices.

“The royalty structures for a few assets are anticipated to see some upward pressure,” he said. “At Syncrude, royalties will jump from the previous range of 2-4 per cent to 9-12 per cent. Oil Sands royalties will see a modest increase from the prior guidance of 1-3 per cent to 4-6 per cent. Another important note is that Firebag facility is now expected to hit payout later in 2021, which will boost bitumen royalties payable in 2022. The more significant guidance item was cash taxes, where the Company now expects to pay between $1-1.3-billion in 2021, up from $300-600-million previously. We were already anticipating cash taxes of $1.1-billion this year.”

Following Tuesday’s update from the Calgary-based company, Mr. Lacey said he’s taking a “more conservative approach” to his forecast for its Fort Hills project in response to Suncor’s decision to slow down production. He also applauded a decision to delay a scheduled maintenance shutdown at its Base Plant oilsands mine upgrader.

“We believe this will be a better outcome as a) it minimizes labour stresses and b) it allows for some utilization of the interconnector pipeline,” he said.

After adjusting his financial projections in response to the update, Mr. Lacey cut his target for Suncor shares to $35 from $39, keeping an “outperform” recommendation. The average on the Street is $32.59.

“Suncor is doing a good job of demonstrating what the impact of consistent operations can look like from the upstream side of the business, and the downstream assets continue to put up a steady performance. Unlike its U.S. peers, which can see material swings in terms of crack spreads and refinery profitability, the Canadian market provides more predictable returns, with exposure to the upside when refined product markets get better.”

Elsewhere, RBC Dominion Securities analyst Greg Pardy raised his target by a loonie to $32 with an “outperform” rating.

“Our constructive stance towards Suncor as a second-half mean-reversion story remains intact following its first-quarter report card. From where we sit, the company is shifting onto its front foot as it enhances it upstream operating approach, and balances shareholder returns with a strong balance sheet,” said Mr. Pardy.


“The future is brighter than ever” for Colliers International Group Inc. (CIGI-Q, CIGI-T), according to RBC Dominion Securities analyst Matt Logan, pointing to an “improving” macro backdrop, opportunities to grow recent platform acquisitions and record fundraising momentum.

“Colliers delivered impressive Q1 results which highlighted accelerating momentum in its business, underpinned by continued strength in recurring services, a rebound in transaction revenues, and its evolution into a highly diversified real estate services firm,” he said.

Before the bell on Tuesday, the Toronto-based firm reported better-than-expected first-quarter results, which Mr. Logan said called a “strong” start to 2021 “underpinned by continued strength in recurring services and rebound in brokerage.”

“Colliers reported adjusted EBITDA of $92-million, coming in 41 per cent/60 per cent ahead of our forecast and consensus,” he noted. “At a high level, we were pleased to see: 1) 4-per-cent organic growth come in ahead of our 2-per-cent estimate; 2) disciplined cost control, with adjusted EBITDA margins of 11.9 per cent, compared with our 8.8-per-cent estimate; and, 3) continued normalization of Capital Markets and Leasing transactions, which increased 47 per cent and 9 per cent year-over-year, respectively.”

With the results, Mr. Logan raised his 2021 and 2022 EBITDA projections by 3 per cent and 4 per cent, respectively, to US$459-million and US$538-million, which reflect year-over-year growth of 27 per cent and 17 per cent.

That led him to increase his target for Colliers shares to US$135 from US$126 with an “outperform” rating (unchanged). The average is US$125.71.

“While shares have rallied almost 30 per cent year-to-date, we remain constructive on the multi-year outlook for the business,” said Mr. Logan. “Shares are trading at 14.2 times/12.1 times estimated 2021/2022 EBITDA vs. the normalized 11.0 times average since the 2015 spin-out — warranted, in our view, in light of CIGI’s continued evolution.”

Elsewhere, others making target adjustments include:

* BMO Nesbitt Burns’ Stephen MacLeod to US$132 from US$125 with an “outperform” rating.

“An improved outlook led to increased guidance (15-30-per-cent revenue and adjusted EBITDA growth),” he said. “The tone of the call was positive as it relates to the growth outlook, and we believe Colliers is well positioned to participate in a recovery, given its solid competitive position, diversification, liquidity, technology investments, and entrepreneurial culture.”

* Scotia Capital analyst George Doumet to US$140 from US$125 with a “sector outperform” rating.

“CIGI (and its global commercial real estate peers, as a group, frankly) has done a commendable job in managing the worst of the pandemic, by focusing on cost-reduction initiatives and growing recurring revenues (i.e., playing defence). Looking ahead to 2021, we forecast a substantial earnings recovery driven by an expected resurgence in the (higher-margin) transaction business (i.e., playing offence). Furthermore and of particular interest to us, we believe CIGI is positioned to outperform its peers from an inorganic growth standpoint as it puts to work its relatively under-levered balance sheet. In that context, we believe the shares are attractive from a relative value standpoint,” said Mr. Doumet.

* CIBC’s Scott Fromson to US$135 from US$112 with an “outperformer” rating.

“The quarter’s robust growth reaffirms our view that CIGI is a good way to gain exposure to a broad range of commercial real estate services; management’s 2021 outlook is for organic growth in the midto high-single digits,” said Mr. Fromson. “CIGI’s large position in recurring-revenue outsourcing & advisory lines smooths out the more variable transaction businesses, which we see providing upside in the current recovery cycle. Further, we expect CIGI to continue its acquisition program, supported by a sound balance sheet (~1.1x leverage) and ample liquidity.”


In the wake of “stellar” first-quarter results, Toromont Industries Ltd. (TIH-T) deserves a premium valuation, according to Canaccord Genuity analyst Yuri Lynk, citing its lack of net debt, 32 years of consecutive dividend growth and the ability to generate 20-per-cent return on invested capital in a down year.

“Mining orders inflected in Q1/2021, driving Equipment Group (EG) backlog up 108 per cent year-over-year and improving the outlook for equipment sales and follow-on, higher margin after-market revenue,” he said. “Toromont is nearly net debt free and boasts a management team and board that are excellent stewards of capital. We continue to view Toromont as a core holding.”

After the bell on Tuesday, the Toronto-based heavy equipment dealer reported earnings per share for the first quarter of 58 cents, up 38 per cent year-over-year and easily exceeding both Mr. Lynk’s 45-cent estimate and the consensus forecast on the Street of 48 cents. Revenue increased 13 per cent to $806 million, also topping expectations ($734-million and $733-million, respectively).

“With management noting the pandemic has caused different ordering patterns from its customers, we believe some sales may have been pulled forward,” said Mr. Lynk. “Nevertheless, it was a strong top-line beat. Operating income was $70-million and 8.7 per cent of revenue versus our $56-million and 7.6-per-cent respective estimates.”

“We take our 2021 EPS estimate to $3.81 from $3.66 and adjust 2022 to $4.28 from $4.26. Q1/2021 was a substantial beat yet mining and rental had little contribution. Once these begin to contribute, while construction and power systems demand remains healthy, we see EPS and DPS continuing to increase through our forecast horizon.”

Keeping a “buy” rating for Toromont shares, Mr. Lynk hiked his target to $111 from $107, topping the consensus of $105.56.

Elsewhere, BMO Nesbitt Burns’ Devin Dodge increased his target to $105 from $96 with a “market perform” rating.

“TIH delivered strong Q1 results and the record equipment bookings confirm that underlying demand in its regions is very favourable,” said Mr. Dodge. “Cost discipline remains a core philosophy that should support attractive incremental margins and earnings growth as revenues shift higher. Moreover, the balance sheet is under-levered, which provides TIH with flexibility to pursue attractive capital deployment opportunities as they arise. However, we believe the current valuation captures this optimism.”

Raymond James’ Bryan Fast hiked his target to $110 from $99 with an “outperform” rating.

“Toromont results were well ahead of RJL and consensus, as revenue exceeded the top end of expectations,” he said. “In uncompromising fashion, the company has navigated the volatility over the last year, even improving an already rock solid balance sheet. As the global economic engine turns and we eventually return to a normal operating environment, Toromont is well positioned to continue down the path of compounding growth. Although current valuation is through the highend of the historical range, we expect investors to continue to pay a premium for high quality, liquid stocks such as Toromont.”


Citing a “very slow sales and purchase order environment,” Raymond James analyst Michael Glen downgraded Ballard Power Systems Inc. (BLDP-Q, BLDP-T) to “outperform” from “strong buy” on Wednesday.

“The lower rating is predicated on near-term visibility, and the need for incremental clarity on the purchase order pipeline which we had originally believed would represent a positive catalyst for the stock (as opposed to the opposite scenario),” he said. “We want to emphasize that we continue to have a favourable outlook for Ballard, but a more tempered near-term outlook causes us to lower our rating.”

“In discussing the situation with management, while there is optimism regarding an inflection in order conversion, visibility is challenging with no specific guidance or indications provided. In assessing the outlook for the order backlog ($112-million at 1Q21 end), if we see a turn in order flow, it will stem from two sources primarily: (1) a rebound in China which will ultimately be driven by the Weichai-Ballard JV (and stem from clarity on the government’s hydrogen policy [exact timing remains to be seen]); and (2) higher activity in bus orders out of Europe. Importantly, Ballard continues to emphasize their leadership position in the fuel cell market, an aspect that we view as critical when taking into consideration the evolving competitive environment and the large / well-capitalized entities that have announced fuel cell development programs.”

See also: Ballard shares drop 20% as investors reassess hydrogen sector’s valuations

Mr. Glen cut his target to US$25 from US$40. The average is US$30.07.

“In terms of our view on the stock, we continue to have a favourable view on Ballard’s market positioning and outlook, and believe the company has the right regional relationships (both China and Europe) that will allow them to benefit as more investment dollars are allocated to hydrogen,” the analyst said. “From that perspective, we continue to see a substantial amount of hydrogen industry activity taking place, and we see a very constructive industry backdrop. That said, in contrast to a robust industry environment we see, hydrogen equities (and EV+SPAC mobility peers) continue to see pressure with a high degree of correlation among relevant peers.”

Others making target changes include:

* Cowen and Company analyst Jeffrey Osborne to US$15.50 from US$20 with a “market perform” rating

* National Bank Financial’s Rupert Merer to US$27 from US$35 with an “outperform” rating

* TD Securities’ Aaron MacNeil to US$25 from US$30 with a “speculative buy” rating.


Though he sees it “executing well” after Tuesday’s release of quarterly results that fell in line with the Street’s expectations, RBC Dominion Securities analyst Nelson Ng reduced his target for Brookfield Renewable Partners LP (BEP-N, BEP.UN-T) to US$45 from US$48 with a “sector perform” rating. The average on the Street is US$42.69.

“We continue to view BEP as a core holding in the renewable space due to its attractive hydro-weighted portfolio and ability to deploy capital at industry-leading returns,” he said. “We believe management is on track to meet or exceed its targeted $0.8–1.0 billion of annual capital deployment. However, we modestly lower our price target ... to reflect a reduction in the value of the company’s growth platform, as investor enthusiasm toward the energy transition and renewables sector has moderated.”

Others making target changes include:

* CIBC’s Mark Jarvi to US$43 from US$44 with a “neutral” rating.

“Overall, BEP is largely delivering and executing as we expect. Updates on growth and funding sources are consistent with BEP’s broader strategies and we believe BEP will continue to use all its levers to surface value. While the unit price has pulled back, at this point we see higher total return potential in some other renewable energy names (some of have seen larger pullbacks),” said Mr. Jarvi.

* Scotia Capital’s Robert Hope to US$42 from US$44 with a “sector perform” rating.

“We view Brookfield Renewable’s results as slightly below our expectations after adjusting for one-time events. We generally look through short-term beats and misses of cash flow driven by variable wind/solar resources. Instead we focus on the company’s longer-term growth outlook, which remains strong. Our estimates do not materially change,” said Mr. Hope.

* Raymond James’ Frederic Bastien to US$41 from US$44 with a “market perform” rating.

“We continue to view BEP as a world-class renewable powerhouse post-1Q21 results and are confident it will play a key role in helping economies meet their ambitious decarbonization goals over the next 10-20 years,” he said. “Just last year, the LP invested some $4.6 bln of equity into new sectors with exponential growth—including distributed generation, offshore wind and green hydrogen. But with bond rates rising and ESG fund flows subsiding of late, it was only natural to see the froth finally come off the units.”


In other analyst actions:

* RBC Dominion Securities analyst Douglas Miehm trimmed his target for Bausch Health Companies Inc. (BHC-N, BHC-T) to US$41 from US$42 with an “outperform” rating, while CFRA lowered its target to $30 from $35 with a “hold” rating and BMO Nesbitt Burns’ Gary Nachman reduced his target to US$27 from US$28 with an “market perform” rating. The average is US$35.50.

“Spin-off updates were the key focus of Bausch’s Q1/21 report,” said Mr. Miehm. “Newly provided segmented information suggests weaker EBITDA/FCF from B+L and stronger FCF from RemainCo than we previously estimated. Management now targets a higher allocation of leverage to RemainCo vs. B+L, and while Bausch’s current CEO and incoming CFO will hold these positions at B+L, a succession plan for RemainCo has not been established, with related uncertainty regarding the outlook for RemainCo post-spin.”

* Ahead of Thursday’s release of its first-quarter results, RBC Dominion Securities analyst Sabahat Khan cut his forecast for Premium Brands Holdings Corp. (PBH-T), leading him to lower his target for its shares to $111 from $113 with a “sector perform” recommendation (unchanged). The average is $125.55.

“Recall that Q4/20 results reflected strongerthan-expected sales in the Specialty Foods (”SF”) segment, reflecting the ramp-up of meat stick sales in the U.S. (up 45 per cent year-over-year in 2020) and growth initiatives in sandwiches, charcuterie and cooked meat products, partially offset by lower-than-expected contribution in the Premium Food Distribution (“PFD”) segment (foodservice demand impacted by lockdown measures in Canada),” said Mr. Khan. “Looking ahead, we have revised our Q1 forecasts lower to reflect the expectation of lower PFD segment sales (prior year quarterly results for PFD were not yet negatively impacted by the pandemic), and lower margin expectations across both segments relative to our prior forecasts. Our forecasts also reflect $52-million of annualized contribution from the Clearwater Seafoods transaction ($45-million interest payment + $7-million of management fees). Overall, we will be looking to get a read at Q1 reporting for the expected seasonality of results, as Q2 2020 was impacted by lockdown restrictions, but H2 2020 reflected strong sales and Adjusted EBITDA growth.”

* National Bank Financial analyst Jaeme Gloyn raised his target for shares of Equitable Group Inc. (EQB-T) to $174 from $165 with an “outperform” rating , while RBC Dominion Securities analyst Geoffrey Kwan hiked his target to $169 from $155 with an “outperform” rating. The average is $156.50.

“EQB reported very good Q1/21 results that although in-line with our forecast, were ahead of consensus,” said Mr. Kwan. “EQB also increased 2021 guidance. Not only do we think EQB is well positioned to capitalize on current continued strength in the housing and mortgage market, but EQB has executed well, evolving to grow its digital presence and diversify its product offering and funding sources. We believe the stock should appeal to small to mid-cap investors looking for an attractive growth story with potential.”

* Mr. Jaeme Gloyn raised his Trisura Group Ltd. (TSU-T) target to a Street-high $205 from $177, exceeding the $141.75 average, with an “outperform” recommendation.

* CIBC World Markets analyst Dean Wilkinson raised his RioCan REIT (REI.UN-T) target to $23 from $22 with an “outperformer” rating, while Canaccord Genuity’s Mark Rothschild increased his target to $20.75 from $20 with a “hold” rating and BMO’s Jenny Ma hiked her target to $21 from $18.50 with a “market perform” recommendation.

“Largely reflecting one-time items which should not be recurring, RioCan REIT (RioCan) reported Q1/21 results that were below expectations,” Mr. Rothschild said. “Overall, however, operating performance was relatively stable, as expected, with leasing spreads on renewals remaining healthy at 5 per cent. Going forward, we do not anticipate a material improvement in operating performance in 2021, and it is likely to be 2022 before there is a more notable recovery in occupancy. Rent collections remain solid at 94%, and this number should trend higher in the near term. Further supporting cash flow growth is the REIT’s large development pipeline, which is heavily focused on residential projects.”. The average on the Street is $21.22.

* BMO Nesbitt Burns analyst Tom MacKinnon raised his target for Element Fleet Management Corp. (EFN-T) to $17 from $16 with an “outperform” rating. The average is $16.48.

“Underlying business fundamentals remain strong as EFN, with new leadership, new profitability improvements, and a resilient business model, pivots to growth and a capital return plan from a position of strength,” he said. “We expect the valuation multiple to continue to gradually improve as the new management delivers high-single-digit to low-double-digit operating income and FCF growth.”

* BMO Nesbitt Burns’ Devin Dodge increased his Russel Metals Inc. (RUS-T) target to $28 from $26 with a “market perform” rating. The average is $29.43.

“Against a backdrop of very favourable industry conditions, RUS delivered record quarterly earnings and the positive trends appear likely to stick around into early H2/21,” said Mr. Dodge. “Though we expect financial performance to normalize in 2022, we believe the surplus profits/FCF in 2021 and its modest financial leverage provide RUS with flexibility to pursue attractive capital deployment opportunities going forward. In our view, the risk/ reward appears balanced but the stock could appeal to more income-oriented investors.”

* CIBC’s Robert Catellier increased his Gibson Energy Inc. (GEI-T) target to $23 from $22 with a “neutral” recommendation. The average is $25.19.

“Results were stronger than expected, even when adjusting for the $7.1MM accrual reversal. Updates to our marketing outlook are enough to cause us to tweak our price target upwards. We harbor some concern about potential risks associated with the company’s seemingly growing renewables aspirations. We are giving It the benefit of the doubt that it will remain disciplined in capital allocation, not reduce return requirements for the sake of growth, and consider partnership rather than assuming a lot of development risk in areas where it may lack expertise,” said Mr. Catellier.

* CIBC’s Alex Hunchak raised his Ero Copper Corp. (ERO-T) target to $28 from $25 with a “neutral” rating, while TD Securities’ Craig Hutchison raised his target to $26 from $25 with a “hold” recommendation. The average is $26.14.

“We maintain our Neutral rating given the expectation of lower grades and production against higher capex in the coming quarters, while acknowledging the company’s significant longer-term organic growth potential,” said Mr. Hunchak.

* CIBC’s Kevin Chiang bumped up his Bombardier Inc. (BBD.B-T) target to 80 cents from 50 cents, exceeding the 78-cent consensus, and kept an “underperformer” rating.

* National Bank’s Vishal Shreehar increased his Parkland Corp. (PKI-T) target to $45 from $44, keeping an “outperform” rating, while TD Securities’ Michael Aelst raised his target to $51 from $50 with a “buy” recommendation. The average is currently $49.08.

* Scotia Capital analyst Michael Doumet raised his Wajax Corp. (WJX-T) target to $27.50 from $26, exceeding the $24.13 average, with a “sector outperform” rating, while BMO’s Devin Dodge raised his target to $24 from $21 with a “market perform” recommendation.

“The demand recovery is tracking ahead of prior expectations and underpinned very solid Q1 results,” said Mr. Dodge. “While we continue to believe there are near-term risks (i.e., supply chain disruptions, ERP system overhaul), we believe the outlook for the business has improved. In our view, the risk/reward is balanced but the stock could appeal to more income-oriented investors.”

* Scotia’s Phil Hardie raised his IGM Financial Inc. (IGM-T) target to $47 from $46 with a “sector perform” rating. The average is $46.33.

* Mr. Hardie also increased his target for CI Financial Corp. (CIX-T) by $1 to $22 also with a “sector perform” recommendation. The average is $23.19.

* Scotia’s Ovais Habib reduced his B2Gold Corp. (BTO-T) target to $9.50 from $9.75, keeping a “sector outperform” rating. The average on the Street is $9.17.

* Paradigm Capital analyst Don Blyth initiated coverage of Pancontinental Resources Corp. (PUC-X) with a “speculative buy” rating and 45-cent target.

“Every once in a while an opportunity arises where a highly prospective tract of land has not seen modern geological exploration, not for lack of desire to do so, but for extraneous circumstances, such as being held by an elderly prospector or the land package being too fractured by multiple owners to do the scale of exploration needed,” he said. “The Superfund designation on the Brewer property is an example of this type of opportunity. Pancon has been playing the long game for a number of years, acquiring options on the land surrounding Brewer, and now has the option on Brewer itself. To return a 300 gram-metre gold equivalent (AuEq) intercept (widths x grade) on one of the first holes of a Phase 1 drill program testing a geological theory is almost unheard of. The option deal to earn-in to full ownership of the property is complex, but well worth taking the time to understand given the size of the potential prize.”

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