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

Canaccord Genuity analyst Dalton Baretto acknowledges Centerra Gold Inc.’s (CG-T) ongoing dispute in Kyrgyzstan is “sure to create noise going forward.”

However, pointing to its “strong” first-quarter results and a 27-per-cent drop in share price since last week’s passing of a new law from the country’s parliament that allows it to seize external control of Centerra’s Kumtor mine, Mr. Baretto raised his rating for the Toronto-based miner’s shares to “speculative buy” from “hold,” believing the market has largely priced the mine out of its share price

“The Kyrgyz situation has overshadowed the attributes that we continue to like CG for: strong underlying operating performance and cash flow generation, a pristine and cash-rich balance sheet, substantial pending growth from Oksut, strong FCF yield and reasonable valuation,” he said. “In our view, Kumtor is now essentially an option in CG’s share price, one that we believe is almost certain to deliver value beyond what is currently priced in.”

Mr. Baretto emphasized Kyrgyzstan’s state mining entity, KyrgyzAltyn, owns 26.16 per cent of Centerra’s common shares, which he thinks will be cancelled if Kumtor is nationalized. That would drop its market cap to $1.8-billion from $2.4-billion.

“CG has indicated that while it prefers to resolve the situation amicably, all legal options including international arbitration will be considered,” he said. “We believe these options will be of limited efficacy, given prolonged timelines and Japaraov’s stated preference to align more closely with Russia and China vs. Western institutions. We believe some form of negotiated settlement is the most likely outcome. Management’s base case continues to be that CG will remain the operator of the mine, and as such operating plans remain unchanged at this time. However, frequent cash sweeps ensure that no more than $10-million remains in-country at any time.”

“From a capital allocation perspective, we believe CG will likely make any commitment to a dividend increase part of a resolution with the Kyrgyz government. Likewise, we believe a meaningful share buyback will need to include some commitment from KyrgyzAltyn to tendering its shares, otherwise CG risks further concentrating the Kyrgyz stake. Management indicated that M&A is off the table for now, although we believe an acquisition will be very much under consideration going forward for multiple reasons.”

He maintained a target price of $11.50 per share. The average is $10.59.

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Citi analyst Anthony Pettinari thinks it’s “highly likely” Domtar Corp.’s (UFS-N, UFS-T) takeover by Richmond, B.C.-based Paper Excellence will be completed by the second half of 2021.

Seeing competing bids as unlikely, he lowered Domtar shares to a “neutral” rating from “buy.”

“We are not surprised by the announcement, having identified UFS as a potential takeout target in our upgrade last August; the likelihood of a takeout seemed to move higher with the sale of Personal Care earlier this year and more recently with UFS’s acknowledgement it had undertaken talks with Paper Excellence,” said Mr. Pettinari.

On Tuesday, privately held Paper Excellence launched a US$2.8-billion takeover bid for Montreal-based Domtar, a company twice its size. It is offering US$55.50 a share in cash per share.

“We do not view competing bids by large NA Paper companies as likely,” Mr. Pettinari said. “[International Paper Co.] is in the process of spinning out its White Paper assets; [Westrock Co.] has a new CEO, who has emphasized capital allocation discipline. While we had identified [Packaging Corp of America] as a logical potential acquirer in our earlier upgrade of UFS, PKG’s highly disciplined style makes a competing bid unlikely, in our view. And while there are European and Chinese Paper producers that have shown a strategic interest in expanding in NA, our research colleagues in London and Hong Kong have not identified a bid for UFS as highly likely.”

In response to the offer, Mr. Pettinari lowered his target for Domtar shares to US$55.50 from US$57. The average target is currently US$52.39.

“Our $55.50 target price is identical to Paper Excellence’s takeout offer, and reflects our view the deal is highly likely to go through. With the stock trading at a relatively tight spread, and risks to the upside (a competing higher bid) and to the downside (deal breaks) roughly balanced, we are Neutral,” he said.

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5N Plus Inc.’s (VNP-T) first-quarter results and “difficult” guidance represents “a meaningful step backwards in a story that ... was starting to see increased investor attention with regard to the ongoing turnaround/business transition,” according to Raymond James analyst Michael Glen.

With that view, he lowered his rating for the Montreal-based producer of specialty semiconductors and performance materials to “outperform” from “strong buy” on Wednesday.

“Our constructive view on 5N Plus has been premised on actions being taken by the company to transition the business towards higher value-add/margin accretive end markets, while at the same time de-emphasizing the commoditized businesses,” said Mr. Glen. “As such, it was with a high degree of disappointment that we found out with the 1Q report that one of the businesses we considered as higher value-add (i.e. solar) is now facing possible headwinds due to rising commodity costs (specifically tellurium). Unfortunately, the situation has layers of complexity and opaqueness that make it difficult to fully assess. All we can really bank on here is that management has assured us that they are in a strong dialogue with the customer, and that there is sufficient tellurium inventory in the system to allow 5N Plus to step back from purchasing activity. Additionally, there are assurances that if any forgoing of sales to the customer is required (there were not any during 1Q), such sales would ultimately be tacked on to the end of the contract. The customer involved in this situation is VNP’s largest (we estimate 20-25 per cent of sales), and management has provided commentary that there is an alignment on this situation.”

Mr. Glen said 5N Plus’s EBITDA guidance range $25-30 million, which falls below his $33-million forecast, “offers sufficient conservatism in terms of an outlook.”

He added: “In particular, the lower-end of guidance assumes (1) Some assumptions regarding sales deferment and margin compression (i.e. higher tellurium prices) in the Electronic Materials segment; (2) No significant EBITDA contribution from the AZUR space acquisition (timing uncertainties); (3) A very conservative outlook for the EcoFriendly segment (which posted a stronger 1Q result); (4) conservative assumptions surrounding other portions of the Electronic Materials segment (i.e. space/satellite and medical imaging).”

Accordingly, he lowered his forecast to the low end of the guidance range ($26.5-million), however he said he remains optimistic about “some levers available to hit the higher end.”

“All in all, we anticipate investors will really need to see a constructive update come with the 2Q results before we see any momentum come back in the name,” said Mr. Glen.

He reduced his target for 5N Plus’ shares to $5 from $5.50. The average is currently $5.20.

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A group of equity analysts on the Street raised their targets for Sleep Country Canada Holdings Inc. (ZZZ-T) a day after the release of its first-quarter results.

They include:

* Scotia Capital’s Patricia Baker to $40 from $38 with a “sector outperform” rating. The average on the Street is $38.43.

“ZZZ posted solid Q1 results, blowing through expectations. Operating performance over the last several quarters underscores the underlying power of its operating model and exceptional positioning in the Canadian market,” said Ms. Baker.

“These results certainly demonstrate that the ZZZ strategy is working, and we see ZZZ well positioned for further growth, market share gains, and enhanced profitability.”

* BMO Nesbitt Burns’ Stephen MacLeod to $40 from $39 with an “outperform” rating.

“Notably, Sleep Country’s strongomnichannel positioning shone through again, with triple-digit e-commerce growth more thanoffsetting lower in-store sales (due to closures),” he said. “Q1 represented a strong start to the year.

“Sleep Country is still ‘early’ in its digital journey, with a multi-year opportunity for e-commerce growth and market share gains for everything ‘sleep,’ including a renewed focus on health & wellbeing. We see attractive risk-reward (8.0 times 2022E EV/EBITDA).”

* CIBC’s John Zamparo to $38 from $37 with an “outperformer” rating.

“Sleep Country continues to operate in extremely favourable conditions: household balance sheets are healthy as ever, spending on the home shows no signs of slowing, and consumers increasingly are considering sleep as part of the wellness trend, which garners more share of the wallet. Additionally, ZZZ’s transition to e-commerce has gone remarkably well,” he said.

* RBC’s Sabahat Khan to $32 from $29 with a “sector perform” rating.

* TD Securities’ Meaghen Annett to $41 from $37 with a “buy” rating.

* National Bank Financial’s Vishal Shreehar to $38 from $37 with a “sector perform” rating.

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After it ended its fiscal 2021 on a “spectacular note,” Scotia Capital analyst Patricia Baker sees Aritzia Inc. (ATZ-T) as “a solid re-opening play.”

On Thursday evening, the Vancouver-based clothing retailer reported adjusted earnings per share for its fourth quarter of 16 cents, blowing past Ms. Baker’s 2-cent forecast and the 5-cent consensus estimate on the Street. Despite COVID-related closures, revenue slid only 2.9 per cent year-over-year to $267.5-million, also ahead of the analyst’s $246.5-million projection and the $253.3-million consensus.

“We see ATZ emerging stronger than most, advantaged by its exceptional ecommerce platform (arguably world-class), its small brick and mortar footprint (affording opportunities for growth), unique operating model, and brand positioning,” said Ms. Baker.

“Despite near-term uncertainty, we believe the long-term opportunity for ATZ remains rich with growth potential. While COVID-19 presented serious operational challenges for ATZ, at the same time, the pandemic presented ATZ with a significant opportunity to flex its advantages. ATZ has proven agile in jumping on these opportunities, which are evident in real estate, talent acquisition, and product expansion. In the context of a North American retail landscape facing record store closures and bankruptcy filings, ATZ, as an understored and growing retail brand, is seeing excellent real estate opportunities with very attractive economics and is fast becoming a sought-after tenant. At the same time, ATZ remains disciplined with respect to new store openings and will open as many stores as the team can handle with no compromise on the quality of locations. The pandemic challenges to retail are also affording opportunities for ATZ in attracting talent, and they have been fairly active on that front and noted several key hires in F21 that shouldupport future growth.”

Keeping a “sector outperform” rating, Ms. Baker hiked her target for Aritzia shares to $41 from $29.50. The average is $36.19.

Elsewhere, others raising their targets include:

* BMO Nesbitt Burns’ Stephen MacLeod to $39 from $35 with an “outperform” rating.

“Commentary from the call suggests that U.S. growth is at a positive inflection point, with in-boutique and e-commerce growth both accelerating. Canadian store closures will weigh on FQ1; however, sales momentum remains strong. Aritzia is well-positioned to drive longterm growth, with ample liquidity, a strong omnichannel platform, category expansion opportunities, and a loyal employee and client base,” said Mr. MacLeod.

* RBC’s Irene Nattel to $36 from $35 with an “outperform” rating.

“ATZ’s strong and better than expected Q4/F21 performance despite extensive COVID related demand and boutique dislocation reinforces our views around the strength, sustainability, and upside potential of the company’s unique business model. The company is back to its pre-pandemic trajectory and, in our view, could deliver at the high-end of, or above F22 guidance given strong momentum coming out of F21, accelerating store development and improving U.S. ramp-up and payback, and erosion of the competitive set,” said Ms. Nateel.

* CIBC’s Mark Petrie by $1 to $40 with an “outperformer” rating.

“Aritzia posted excellent Q4 results, well ahead of expectations and closing a year that highlighted the relevance of the brand and resilience of the model. We continue to believe ATZ will exit the pandemic as a stronger business with improved growth prospects, particularly in the U.S and online.,” he said.

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After a “strong” start to 2021, Desjardins Securities analyst Kevin Krishnaratne thinks AcuityAds Holdings Inc. (AT-T) “presents a unique buying opportunity,” seeing a discounted valuation as it returns to “growth mode.”

On Tuesday before the bell, the Toronto-based digital advertising firm reported revenue of $27.4-million for the first quarter, up 13.4 per cent year-over-year and following four consecutive quarters of declines.

“While ad spend in most categories has started to rebound, harder-hit sectors such as travel are still on pause, although signs of growth are on the horizon,” said Mr. Krishnaratne. “We estimate revenue growth in 1Q was closer to 30 per cent year-over-year excluding such sectors. AT booked $3.2-million (107 per cent quarter-over-quarter) in revenue related to Illumin, its new ad automation platform. AT has signed up 29 clients, most of which are new and over half of which are in the Fortune 1000. We view this as quite impressive given the product is just over six months old, while the company believes its differentiation has helped it secure deals it otherwise may have been unable to win. Net revenue was $14.4-million for a margin of 52.3 per cent, with AT’s AI enabling better ROI (in which AT shares). EBITDA was solid at $4.5-million vs our estimate of $3.0-million.”

The analyst expects to see “strength” in the second quarter due to the momentum brought by Illumin as well as easier comps. He’s projecting revenue to rise 52 per cent year-over-year to $29.7-million with EBITDA of $4.9-million.

While he raised his 2021 and 2022 financial projections, Mr. Krishnaratne trimmed his target for AcuityAds shares to $23 from $30. The average is $23.31.

“While the stock is down 30 per cent-plus since our initiation, this is largely driven by the ad tech sector-wide sell-off,” he said. “We think AT’s 50 per cent-plus discount at 7.8 times 2022 net revenue vs TTD [The Trade Desk] at 17.5 times presents a unique buying opportunity.”

Elsewhere, Canaccord Genuity analyst Aravinda Galappatthige cuts his target to $21 from $33 with a “buy” rating.

“The strong beat in Q1 and encouraging Q2 guide of over 50-per-cent revenue growth, continues to point to a solid F2021 both in terms of topline and profitability,” he said. “Alongside the financial results, updates on the uptake of illumin were also quite bullish, which is important given this is a critical element AcuityAds’ investment thesis. The unknown factor is M&A, which could further boost revenue levels and EBITDA, given the strong balance sheet and the backdrop of a still highly fragmented marketplace.”

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After its first-quarter results fell in line with the Street’s expectations, a series of equity analysts raised their target prices for units of InterRent Real Estate Investment Trust (IIP.UN-T).

On Tuesday, the Ottawa-based REIT reported funds from operations per unit for the quarter, which is normally seasonally weak, of 11 cents, matching the consensus expectation.

“IIP’s strategy to not ‘buy occupancy’ in a period of weak traffic has negatively impacted operating performance; however, we believe it should lead to stronger AMR growth over the next 12–24 months,” said Desjardins Securities’ Michael Markidis. “In the interim, management continues to utilize its strong financial position to add scale within its core markets. In the absence of additional FV gains, pro forma leverage stands at approximately 35 per cent.”

Maintaining a “buy” rating, Mr. Markidis raised his target for InterRent units to $17.50 from $16, calling the results “strong.” The average target is $16.42.

Others making changes include:

* TD Securities’ Jonathan Kelcher to $18 from $17 with a “buy” rating.

* CIBC’s Dean Wilkinson to $16.50 from $15.50 with a “neutral” rating.

* National Bank Financial’s Matt Kornack to $17.50 from $17 with an “outperform” rating.

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In a research note wrapping up first-quarter earnings season for Canadian life insurance companies, * Credit Suisse analyst Mike Rizvanovic increased his Great-West Lifeco Inc. (GWO-T) target to $37 from $35 with a “neutral” rating. The average on the Street is $37.56.

He cut his Manulife Financial Corp. (MFC-T) target by $1 to $27, keeping an “outperform” rating. The average is $29.46.

“Following several consecutive quarters of consistent and sizable EPS beats, the large Canadian lifecos reported relatively in line Q1 results when we exclude a handful of non-recurring items in the quarter (i.e., outsized positive strain in Asia for MFC, elevated comp-related expenses in Asset Management for SLF, and an abnormally low tax rate for GWO),” he said. “And so our core earnings forecasts through 2022 were not changed materially for any of the lifecos coming out of Q1 earnings season. That’s not to suggest that our views on the group’s outlook have become less optimistic, particularly in light of a recovering economy as we believe that core EPS growth in a more normalized 2022 will average a very solid 8 per cent. Among the peer group, SLF remains our top pick as we favor the company’s lower risk profile relative to MFC, and its strong Asset Management business.”

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In other analyst actions:

* CIBC World Markets analyst Hamir Patel upgraded CanWel Building Materials Ltd. (CWX-T) to “outperformer” from “neutral” with a $12 target, up from $10.50 and above the $12.08 average.

“Record EBITDA this year and the recent equity raise have substantially de-risked the balance sheet with net debt to EBITDA slated to fall to 1.3 times by year end,” he said. “CWX has also been executing very well on its growth strategy, with additional M&A likely in coming quarters to increase the proportion of pressure-treated wood products in its overall sales mix. With 40 per cent of its business tied to new home construction, and another 40 per cent tied to R&R activity, CanWel is well positioned to benefit from attractive fundamentals for North American housing markets supported by low mortgage rates, rising home prices, and an ageing housing stock.”

* Mr. Patel raised his target for Conifex Timber Inc. (CFF-T) to $3.25 from $3 with a “neutral” rating, while RBC Dominion Securities’ Paul Quinn raised his target to $4 from $3 with an “outperform” recommendation. The average is $3.08.

“Conifex Timber Inc. reported Q1 results that were slightly below our expectations, but overall we think investors should be happy with the business trajectory given that lumber prices are at record levels and the balance sheet is in good shape,” said Mr. Quinn. “We still think that the best long-term course of action is for a larger company to acquire the Mackenzie operations and better leverage G&A expenses; however, we like that the team continues to look for ways to add value through high-return organic capital.”

* National Bank Financial analyst Maxim Sytchev downgraded Ritchie Bros. Auctioneers Inc. (RBA-N, RBA-T) to “sector perform” from “outperform” with a US$66 target, while Scotia Capital’s Michael Doumet raised his target to $65 from $58 with a “sector perform” rating and Raymond James’ Bryan Fast increased his target to US$65 from US$59 with a “market perform” recommendation. The average is US$63.33.

“Used equipment availability concerns were raised last quarter as consignors held on to equipment and took a wait and see approach,” said Mr. Fast. “With the economic engine beginning to turn and economies starting to open up, buyers are looking for equipment to put to work. Strong demand for new and used equipment has been evident with equipment dealer results to begin the year. Even though demand is there, Ritchie’s business model needs willing consignors and supply to match that demand. We expect those supply concerns to persist in the near term.

“Longer term, the opportunity is significant for Ritchie Bros, as the company targets the $300-billion used heavy equipment global market. We expect Ritchie. Bros to flush out their strategy in a post pandemic world (what will live auction days look like?) and maintain a focus on their multi-channel platform. Despite this, we expect that much of the near-term upside is implied in the current valuation.”

* National Bank’s Zachary Evershed upgraded Savaria Corp. (SIS-T) to “outperform” from “sector perform” with a $20.50 target, up from $20 but below the $21.75 average on the Street.

* Though its first-quarter results topped his expectations, Laurentian Bank Securities analyst Jacques Wortman lowered Altius Minerals Corp. (ALS-T) to “hold” from a “buy” recommendation based on recent share price appreciation. His target rose to $20 from $19.25. The average is $18.88.

* Canaccord Genuity analyst Tom Gallo initiated coverage of Vancouver-based i-80 Gold Corp. (IAU-T) with a “buy” rating and $3.75 target. The average is $3.11.

“i-80 is a Nevada-focused producing gold company created after the recent spinout of Premier Gold, with a project portfolio that includes South Arturo, Getchell and McCoy-Cove,” he said. “This streamlined company offers a pipeline of development assets to complement its 40-per-cent-owned South Arturo operation, which is run by Nevada Gold Mines. The company has a proven management team with expertise in the region, and a clean balance sheet with no debt. We believe the company’s ability to advance its development prospects quickly, including the permitted (from underground) Getchell project, will help strengthen future cash flows and lead i-80 toward 200koz by the latter part of the decade.”

* TD Securities analyst Mario Mendonca downgraded Element Fleet Management Corp. (EFN-T) to “hold” from “buy” with a $14.50 target, down from $16. Elsewhere, RBC Dominion Securities analyst Geoffrey Kwan raised his target to $19 from $18 with an “outperform” rating, while Raymond James’ Stephen Boland increased his target to $17.50 from $14.50 with an “outperform” recommendation. The average is $16.58.

“We believe it is better to focus on the 2022 outlook where OEMs are expected to catch up on production, pent-up order demand accelerates and the record orders announced this quarter convert to revenue,” said Mr. Boland. “This would be supported by high free cash flow (higher dividends and active NCIB). Therefore, if investors can withstand steady/flat normalized 2Q21 and possibly 3Q21 results, 2022 would provide even cleaner earnings going forward. Our 2022 revenue growth is above management’s guidance of 4-6-per-cent normalized growth as we do not believe that 2021 is a normal year. We are not materially adjusting earnings and expect that this stock can start to finally achieve higher multiples.”

* National Bank’s John Sclodnick initiated coverage of Liberty Gold Corp. (LGD-T) with an “outperform” recommendation and $2.50 target. The average is $2.99.

* RBC Dominion Securities analyst Al Stanton cut Parex Resources Inc. (PXT-T) to “sector perform” from “outperform” with a $26 target. The average is $30.48.

“Cash-rich Parex represented a safer haven for investors seeking to retain some oil sector exposure. Higher oil prices are a boon for the business, but a keenly anticipated inorganic growth spurt now looks more expensive, and management change in Q1/21 and unrest in Colombia in Q2/21 seem to be keeping potential investors on the sideline. Like investors, we are now taking a ‘show-me’ approach,” said Mr. Stanton.

* BMO Nesbitt Burns analyst Jackie Przybylowski reduced her Hudbay Minerals Inc. (HBM-T) target to $13.50, exceeding the $13 average, from $14 with an “outperform” rating.

“Although quarterly earnings missed consensus and our expectations, the miss was largely attributable to timing of shipments and back-half weighted production. We expect these shortfalls will be made up and that Hudbay will continue to execute on the plans it outlined at its April 7 Business and Technical Review,” she said.

* Ms. Przybylowski also shrunk her Kinross Gold Corp. (KGC-N, K-T) target to US$13 from US$14 with an “outperform” rating. The average is US$11.06.

“In an otherwise in-line or positive quarter, company commentary around the impact of pit wallmovements at Round Mountain on production, grade, and the timing of the Phase S pushback. Allother projects remain on track and guidance for 2021 and longer-term remains unchanged,” she said.

* Scotia Capital’s Justin Strong cut his Innergex Renewable Energy Inc. (INE-T) target to $23 from $26 with a “sector perform” rating, while Ben Pham BMO Nesbitt Burns’ lowered his target to $25 from $27 with an “outperform” rating. The average is $27.30.

* Scotia Capital’s Jason Bouvier increased his Freehold Royalties Ltd. (FRU-T) to $9.50 from $9 with a “sector outperform” rating, while Canaccord Genuity’s Anthony Petrucci raised his target to $11 from $10 with a “buy” recommendation and BMO’s Ben Pham bumped up his target to $10 from $9 with an “outperform” rating. The average is $10.19.

“The robust yield on FRU’s share price relative to its current payout ratio is particularly impressive considering improvements in FRU’s underlying business,” he said. “Traditionally, FRU forecasts a declining production base, using the funds not distributed as dividends to replenish production levels via acquisitions. At current commodity prices, FRU forecasts drilling activity on its land base to naturally replace declines, suggesting acquisitions completed with additional funds could serve to drive production levels higher.”

* Calling its acquisition of Harvest Health & Recreation Inc. (HARV-CN) “transformational,” Canaccord Genuity analyst Derek Dley raised his target for Trulieve Cannabis Corp. (TRUL-CN) to $97 from $90 with a “speculative buy” rating. The average is $89.46.

“In our view, this acquisition further distances Trulieve from its peers in terms of absolute EBITDA generation, while increasing Trulieve’s presence to 11 states from 6 currently. We note the acquisition is the largest in the history of the U.S. cannabis market,” he said.

* Scotia Capital’s Mario Saric raised his Dream Office REIT (D.UN-T) target to $24 from $25 with a “sector perform” rating. The average is $24.19.

“We will review our ratings as REIT earnings progress but D remains a “preferred SP-rated REIT”,” he said. “We think Office building re-population (Q4/21+), renewed NCIB activity (August 2021+), and DIR NAVPU growth are mid-term unit price catalysts (DIR = 27 per cent of our D NAV), while 2200 Eglington remains a big long-term catalyst (we estimated $4.00 on NPV).”

* CIBC World Markets analyst Sumayya Syed raised her Slate Grocery REIT (SGR.UN-T) target to $9.75 from $9.50, exceeding the $9.65 average, with a “neutral” rating.

“We believe the relative defensiveness of grocery-anchored retail has allowed Slate Grocery to pursue external growth opportunistically, at a time when transactional activity all but ground to a halt. The REIT’s acquisitive growth over the duration of the pandemic certainly appears timely, as the grocery-anchored asset class has recently witnessed strong investor interest and cap rate compression. Organic growth, however, has been muted and we look towards the ~$2MM of committed rent to boost SPNOI,” said Ms. Syed.

* Ms. Syed also raised his target for CT REIT (CRT.UN-T) to $17 from $16, maintaining a “neutral” rating. The average is $16.89.

“With clockwork-like precision, CT REIT continues to deliver steady growth, made possible by its 99%-occupied portfolio and a solid creditworthy major tenant in Canadian Tire. A similarly prudent approach to developments, most of which are CTC store redevelopments and expansions, also consistently contributes to organic growth. The REIT’s strategic alliance with CTC ensures a continued pipeline of similar opportunities tied to the retailer’s store network strategy. CRT’s earnings profile has greater visibility and predictability relative to peers,” she said.

* CIBC’s Mark Petrie raised his George Weston Ltd. (WN-T) target to $141 from $131 with an “outperformer” rating, while Scotia Capital’s Patricia Baker increased her target to $121 from $117 with a “sector outperform” rating and Desjardins Securities’ Chris Li moved his target to $127 from $124 with a “buy” recommendation. The average is $125.83.

“We believe there is potential for the NAV discount to further narrow to 10 per cent from 14 per cent with better visibility from the WF sale and use of proceeds,” said Mr. Li. “WN indicated the proceeds will most likely be returned to shareholders through share buybacks. In theory, we estimate there is potential for WN to repurchase 10 per cent of the total shares. While WN indicated that both L and CHP are well-funded and there would be no need for incremental capital in the normal course of business, we believe WN could possibly reserve some of the proceeds for future investments. Improvement in sentiment on the REIT sector from reopening would also be a positive.”

* RBC analyst Sabahat Khan bumped up his Finning International Inc. (FTT-T) target to $39 from $35 with an “outperform” rating, while CIBC’s Jacob Bout raised his target to $41 from $39 with an “outperformer” rating , Scotia Capital’s Michael Doumet increased his target to $38 from $34.50 with a “sector outperform” rating and National Bank Financial’s Maxim Sytchev moved his target to $44 from $43 with an “outperform” recommendation. The average is $38.83.

“Due to a combination of COVID-19 restrictions, customer capital discipline, and timing, product support got off to a slower start (i.e. lagging commodity prices)” said Mr. Doumet. “However, as commodity prices remain highly conducive to running high fleet utilization (and increased production), the company remarked that product support was running at higher levels in 2Q21 and was expected to ramp further in the 2H21. Combined with a strong backlog and increased machine orders, we expect strong EPS momentum into the 2H21, which bodes well for 2022. As an industrial name with significant exposure to the favorable (multi-year) commodity cycle, we expect quite a bit of earnings torque, especially as Finning overlays higher activity levels onto a more efficient cost base. FTT trades at 17 times P/E on our 2022E. To us, this multiple reflects potential upside from a rather short-cycle (i.e. circa 2017-2018), whereas, given the strength in commodity prices, we think the cycle will extend much further out.”

* RBC’s Michael Smith raised his Melcor REIT (MR.UN-T) target to $7.25 from $5.50 with a “sector perform” rating. The average is $6.75.

“While Alberta is temporarily facing more restrictive pandemic measures, we see an improving macro backdrop in the balance of 2021–22 for Melcor REIT,” he said. “Year-to-date, the provincial GDP growth outlook has improved and appears to be reflected in MR’s early leasing traction. Looking ahead, we see a long road to recovery with occupancy of 87 per cent, yet the operating environment remains generally stable and is likely to strengthen over the next few years.”

* CIBC’s Nik Priebe bumped up his TMX Group Ltd. (X-T) target to $145 from $140 with a “neutral” rating. The average is $149.71

* CIBC’s Robert Catellier raised his Keyera Corp. (KEY-T) target to $32 from $30, maintaining an “outperformer” rating. BMO’s Ben Pham raised his target to $30 from $27 with an “outperform” rating, while National Bank Financial’s Patrick Kenny moved his target to $31 from $28 also with an “outperform” rating. The average is $29.18.

* iA Capital Markets analyst Frédéric Blondeau trimmed his BTB REIT (BTB.UN-T) to $4.30 from $4.75, keeping a “buy” rating. The average is $4.53.

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