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

Citi analyst Christian Wetherbee expects North American railway companies to report “soft” volumes for the fourth quarter of fiscal 2021, leading him to trim his financial expectations across the sector.

However, he predicts “building yield strength and the potential for gradually unwinding congestion” will lead to improvement through 2022, which he thinks will be the focus of investors moving forward.

“We are lowering our 4Q21 EPS estimates for the rails by 6 per cent as volume lagged this quarter and likely offset building pricing strength,” said Mr. Wetherbee in a research report released Wednesday. “That said, it seems clear from mid-quarter updates that pricing strength has progressed faster than investors had expected, minimizing the negative impact of soft volume and preserving most of the originally expected earnings power in 4Q. If there is upside to our estimates it will likely come from yields and may be more pronounced for the eastern rails CSX and Norfolk Southern where export coal pricing and intermodal assessorials could build on 3Q strength. That said, based on our current estimates we see the best potential for a 4Q beat at UP. We are largely maintaining above consensus estimates for 2022.”

“Our constructive view on the rails is partially predicated on a volume rebound in 2022 driven by market share returning to the rails from truck following an extended period of losses. As we noted in our Transport Outlook report last month, we believe the underperformance of rail volume relative to imports has been driven by truck share gains (particularly amongst smaller carriers) with intermodal carloads running down as much as 3 per cent year-over-year before improving in December. As rail service continues to normalize and heads are added, we believe intermodal can return to growth beginning in 2Q22 (December saw some stabilization) contributing to 3 per cent-plus total volume growth for the group in 2022. Service is the biggest risk to this thesis, so watching monthly employment reports from the STB and weekly service metric reports may be as important as weekly carloads in driving stock performance.”

Mr. Wetherbee said he now prefers Canadian Pacific Railway Ltd. (CP-N, CP-T) ahead of Canadian National Railway Co. (CNI-N, CNR-T), noting: “Following the recent news that Jim Vena has withdrawn from the CN CEO search we think the near-term outlook is less constructive, with the potential for a non-rail CEO being equally or possibly more likely than a negotiated truce with TCI.”

He raised his target for CP shares to US$84 from US$80 with a “buy” recommendation. The average target on the Street is US$82.48, according to Refinitiv data.

“We rate shares of Canadian Pacific Buy as we are constructive on its continuing meaningful operational improvement, which we expect to drive year-over-year improvements in OR [operating ratio] in 2021-2023,” said Mr. Wetherbee. “In addition, we expect a volume recovery and the realization of several actionable revenue catalysts to drive strong performance in 2021 and beyond.”

He maintained a “buy” recommendation and US$140 target, exceeding the US$131.25 average, for CN shares.

“We think the stock is likely to benefit from the KSU deal going away (removing the regulatory overhang) and a refocus from management on operating ratio,” he said. " A focus on OR seems more likely following TCI’s activism, which now includes a call for former UP and CN COO Jim Vena to replace current CN CEO JJ Ruest. This move was one we thought was possible and we believe a greater emphasis on OR and EPS growth is desired by shareholders and either the existing or a new management team are more likely to deliver it given the circumstances. In the current environment of lackluster volume growth, we believe the potential for a laggard OR improvement story is likely to resonate with investors.”

The analyst’s top pick for the sector remains CSX Corp. (CSX-Q). He raised his target for the Jacksonville-based company to US$45 from US$42 with a “buy” rating. The average is US$39.

“Within the rails we remain focused on the U.S. carriers and within the U.S. carriers, we prefer CSX,” he said. “We think similar market share and pricing tailwinds can benefit Norfolk Southern and Union Pacific as well, but CSX has a 2 quarter head start on NS and UP in increasing headcount which benefits service and therefore volume, and we think its relative service performance vs. NS could yield incremental share opportunities, particularly in 1H22.”

Mr. Wetherbee also made these changes:

  • Norfolk Southern Corp. (NSC-N, “buy”) to US$345 from US$310. Average: US$305.71.
  • Union Pacific Corp. (UNP-N, “buy”) to US$287 from US$245. Average: US$259.93.


Computer Modelling Group Ltd. (CMG-T) is poised to benefit from end-market stability with the energy industry appearing to be the “healthiest” it’s been in years, according to Canaccord Genuity analyst Doug Taylor.

Coupled with an “attractive” valuation, he raised his rating for Calgary-based software provider to “buy” from “hold” on Wednesday, seeing greater visibility on its “revenue and profit profile stabilizing and returning to growth.”

“Recall that CMG counts oil & gas and related industries for virtually all its revenue,” said Mr. Taylor. “Oil prices have recently resumed their upward trajectory with OPEC+ opting to maintain its planned February increase of 400k bpd on January 4 led by expectations that the Omicron variant would have a milder than expected impact on demand. The assessment was based on a combination of the global economic performance and real-time transportation data suggesting the variant has not impacted demand or induced lockdowns to the extent initially feared in early December. WTI closed at US$76 per barrel, now up 43 per cent since February 2020 (i.e., pre-COVID shock) and up 16 per cent since the recent Omicron-driven pullback. Certain OPEC+ nations are also facing production issues, lending support for a further bull case for oil prices, and supportive of the ongoing recovery in rig counts (down 35 per cent vs. pre-COVID) and demand for reservoir simulation services.”

“While WTI and rig counts continue to chart higher, the company’s shares have lagged behind this recovery, and are currently down 44 per cent vs. pre-COVID. In addition, at current levels CMG continues to trade well below its historical average, suggesting upside as investors assess this discount on a stabilizing oil price recovery.”

Mr. Taylor said he expects “key indicators to turn the corner in coming months,” noting: “Deferred revenue rose 9 per cent year-over-year in Q2, marking the first rise since before COVID-19. While many oilfield majors typically set their annual capex budgets early in the calendar year, we expect revenue recognition of new or renewed contracts, including a recent pricing increase, to begin taking hold in the Q4/Q1 timeframe. We, therefore, expect core annuity and maintenance license revenue, a key valuation driver, to bottom out over the next two quarters and return to growth in Q1.”

He maintained a target price of $5.50 per share. The average on the Street is $6.08.

“CMG shares have traded down what we believe is an attractive 10.8-times NTM EV/EBITDA, near the bottom of its historic trading range, and suggesting a 30.7-per-cent return to our unchanged $5.50 target (approximately 13 times NTM+1 EBITDA), including a 4.6-per-cent dividend yield,” the analyst said. “We look to continued improvement in quarterly fundamentals, in particular recurring revenue stabilization and, ultimately, growth, as catalysts for revaluation. We see this return to growth supported by CMG’s ability to begin putting through pricing increases, the commercialization of CoFlow, and new investments in broadening use cases for its software in carbon capture/sequestration scenarios, thereby increasing its overall addressable market.”


Following a “strong” year highlighted by pricing gains, RBC Dominion Securities analyst Paul Quinn sees a “less favourable” outlook in most pulp and paper markets for 2022, believing demand growth is likely to be “tepid.”

“Heading into the New Year, we have identified some key themes to watch in 2022; these include: 1) Get ready for more efficient packaging; 2) Logistics will continue to have an outsized impact on pulp & paper markets; 3) New capacity in pulp & containerboard will impact supply-demand balances; 4) Pace of return to normal will drive paper & tissue demand; and, 5) Paper based packaging will see tailwinds from plastic to paper substitution,” he said.

In a research report released Wednesday, Mr. Quinn named Cascades Inc. (CAS-T) his “Top Pulp & Paper Idea for 2022″ in Canada.

“We like the company’s exposure to recycled containerboard and upcoming potential catalyst in the start-up of the Bear Island containerboard mill,” he said. “In addition, Cascades trades at a substantial discount to its U.S. packaging peers, which remains near the widest margin over the last 5 years.”

He maintained an “outperform” rating and $20 target for Cascades shares. The average target on the Street is $18.64.

For the United States, he named Montreal-based Resolute Forest Products Inc. (RFP-N, RFP-T) one of his top ideas along with Clearwater Paper Corp. (CLW-N) and Rayonier Advanced Materials Inc. (RYAM-N).

He raised his target for U.S.-listed Resolute shares by US$2 to US$18, exceeding the US$16.75 average.

Mr. Quinn also made these target reductions:

* Canfor Pulp Products Inc. (CFX-T, “sector perform”) to $8 from $9. Average: $8.30.

“Our $8 price target is based on a blended 3.25 times EV/EBITDA multiple on our trend EBITDA of $175-million (weighted 85 per cent) and our 2022 EBITDA estimate (weighted 15 per cent) of $132-million,” he said. “We believe that Canfor Pulp shares should trade below the typical range for Canadian Paper and Forest Products companies (5.0 times to 7.0 times) given the significant headwinds to pulp & paper markets, in addition to tightening fiber supply in B.C. Our price target supports our Sector Perform rating.”

* International Paper Co. (IP-N, “outperform”) to US$50 from US$53. Average: US$55.15.

* WestRock Co. (WRK-N, “sector perform”) to US$45 from US$50. Average: US$56.

“Last year, performance in the paper, packaging, & forest product industry was mostly positive, with only five companies (23 per cent of our coverage) posting negative year-over-year returns,” Mr. Quinn said. “Of those companies, four were pulp & paper producers (Cascades, Clearwater, Rayonier Advanced, and Canfor Pulp). In addition, Mercer, WestRock, International Paper, and KP Tissue trailed their respective indices. Of the Pulp & Paper producers, only Resolute Forest Products outperformed, which we attribute to its outsized and growing Wood Products exposure.”


In his 2022 outlook for North American paper and forest products companies, TD Securities analyst Sean Steuart said he thinks a “‘stronger for longer’ wood products price cycle is a reality.”

“Wood product prices are still below frenzied Q2/21 records, but are back well above our assessment of mid-cycle (trend) levels, reflecting buoyant U.S. demand and tight supply,” he said. “We are raising our average 2021 Western SPF lumber benchmark price by 6 per cent to US$874 per thousand board feet and our average 2022 price estimate by 24 per cent to US$725/Mfbm.”

Reiterating his “sector overweight” bias, Mr. Steuart raised his earnings estimates and target prices for most of his coverage universe.

“Higher earnings forecasts reflect positive changes to our commodity price deck and company-specific growth initiatives, mitigated by input/freight cost inflation,” he said. “We are raising our target prices for seven of the 10 names, mostly to account for higher mid-term free cash flow (FCF) estimates and the inclusion of 2023 FCF in our valuation methodology. We forecast average annual FCF yields of 20 per cent in 2022 and 9 per cent in 2023 for wood product equities — down from an estimated average of 31-per-cent yield in 2021, but still robust, especially given an expectation of higher capex over the next two years. We are not making any recommendation changes.”

“Notwithstanding strong equity gains in 2021 and an expectation of ongoing commodity market volatility this year (a factor that we believe alienates a contingent of potential investors), valuations based on mid-cycle estimates remain below long-term averages.”

Citing its “value-accretive growth initiatives and balanced capital-allocation priorities,” the analyst named Interfor Corp. (IFP-T) his “top pick” in the sector. He hiked his target for its shares to $54, exceeding the $45 average on the Street, from $43 previously, keeping a “buy” recommendation.

His other target increases were:

  • Cascades Inc. (CAS-T, “hold”) to $15.50 from $15. The average on the Street is $18.64.
  • Canfor Corp. (CFP-T, “buy”) to $41 from $38. Average: $42.17.
  • Resolute Forest Products Inc. (RFP-N/RFP-T, “buy”) to US$20 from US$16. Average: US$16.75.
  • Western Forest Products Inc. (WEF-T, “hold”) to $2.50 from $2.25. Average: $2.53.
  • West Fraser Timber Co. Ltd. (WFG-N/WFG-T, “buy”) to US$125 from US$110. Average: US$114.85.

He trimmed his target for Canfor Pulp Products Inc. (CFX-T, “hold”) to $7 from $7.50. The average is $8.30.

“In 2021, the North American forest products sector experienced exceptional profitability, unprecedented volatility, and strong equity returns. Average total returns for our coverage universe were 49 per cent last year, led by lumber- and OSB-weighted equities (up 84 per cent, on average), which outpaced gains of 25 per cent for the S&P/TSX Composite and 31 per cent for the S&P 500. Although overall performance was positive, volatility was extreme. Record-shattering earnings for lumber and panel producers resulted in the fastest balance-sheet transition in the industry’s history and subsequent acceleration in capital deployment.,” said Mr. Steuart.


Following the largest acquisition in its history, Desjardins Securities analyst Frederic Tremblay thinks GDI Integrated Facility Services Inc. (GDI-T) is “quickly building a U.S. powerhouse.”

On Tuesday shortly after the market opened, the Lasalle, Que.-based company announced a deal for IH Services Inc., one of the one of the largest janitorial service providers in the Southeastern United States. It generated approximately US$200-million in annual revenue for the twelve-month period ending Aug. 30, 2021.

Mr. Tremblay called the acquistion “one more gift for investors” as the new year begins

“In addition to size and cultural fit, we believe that GDI was attracted to IH’s strong management team and reputation, which should provide a solid foundation as GDI expands its U.S. geographic footprint through this transaction,” he said. “Overall, IH looks like another positive step for GDI in the U.S. market following the acquisition of BPAC and Enginuity (technical services) and Fuller (cleaning chemicals/products manufacturing plant) in 2021.”

“Management indicated that the multiple paid for IH was within its usual range for large acquisitions. As such, we are pleased that GDI was able to pay an attractive 6–8-times EBITDA for a well-run company of this size. We expect GDI to remain on the lookout for other acquisitions within a healthy pipeline of opportunities in the highly fragmented janitorial and technical services markets. A healthy balance sheet (estimated pro forma leverage of 2.5 times EBITDA) and a persistently strong free cash flow outlook provide ammunition for future M&A.”

After raising his 2022 revenue and earnings forecast for GDI, Mr. Tremblay increased his target for its shares to $67 from $64 with a “buy” rating (unchanged). The average on the Street is $67.36.

“We view GDI’s prospects as extremely bright, including its role in the ‘new era of cleaning’. We are also pleased with the execution of the ongoing U.S. expansion for both janitorial and technical services,” he said.

Other analysts making target changes include:

* Scotia Capital’s Michael Doumet to $60 from $55 with a “sector perform” rating.

“The deal is sizeable adding 15 per cent to 2022 sales and nearly doubles the size of GDI’s U.S. Janitorial business,” he said. “It also marks another in a string of recent accretive acquisitions – but the first Janitorial acquisition since 4Q19. On the latter, management noted on recent calls that both buyers and sellers were previously having difficulty pricing deals due to the uncertainty around COVID and its L-T impact on the janitorial industry (and margins). To that end, we view the IH deal as an early signal that we may have found the ‘new normal’.”

* CIBC World Markets’ John Zamparo to $64 from $59 with an “outperformer” rating.

* National Bank Financial’s Zachary Evershed to $70.50 from $67.50 with an “outperform” rating.


Canaccord Genuity’s Derek Dley expects Aritzia Inc. (ATZ-T) to continue its momentum when it reports its third-quarter 2022 results after the bell on Jan. 12.

He’s projecting revenue for the Vancouver-based fashion retailer of $398-million, exceeding both management’s guidance of $350-375-million and the consensus forecast of $367-million. His EBITDA estimate of $81-million also tops the Street ($75-million)

“Last quarter saw Aritzia report impressive results, with revenue increasing 75 per cent year-over-year due to strength in both in-store and online sales channels,” said Mr. Dley. “In-store revenues grew by 95 per cent year-over-year despite 50 per cent of Canadian stores being closed for half the quarter while e-commerce revenue grew by 49% over the previous year. Alongside, the company also updated its guidance and is expecting full year revenues of $1.25-1.30-billion (up from $1.20-1.25-billion), with Q3/F22 revenue expectations of $350-375 million.

“Looking forward, we expect the strong retail momentum to continue from both channels, with growth from the U.S. remaining particularly robust as management alluded to in its remarks alongside last quarter’s results. Notably, we think results will be further helped by the company’s brick-and-mortar stores, particularly in Canada, now operating at pre-pandemic levels. Accordingly, we are forecasting year-over-year comparable sales growth of 20 per cent for the quarter, which results in a revenue forecast of $398 million, ahead of management expectations given the strong retail momentum seen to date along with the fact that Aritzia has materially beaten its guidance over the last two quarters.”

Keeping a “buy” recommendation, Mr. Dley raised his target for Aritzia shares to $57, exceeding the $53.43 average, from $50 with a “buy” rating.

“In our view, Aritzia has done a great job of navigating a changing retail landscape by offering an aspirational customer experience within its brick-and-mortar locations and an improved e-commerce platform,” he said. “With over 20 consecutive quarters of same-store sales growth prior to the onset of COVID-19, a robust pipeline of new store openings, a healthy balance sheet to support growth and margin enhancement initiatives, and a well-aligned management team, we believe Aritzia is deserving of a premium valuation.”


Following recent underperformance, Echelon Capital Markets analyst Michael Mueller thinks E3 Metals Corp. (ETMC-X) offers “compelling” near-term upside and sees a “catalyst-rich” year ahead.

“We believe E3 is in a position to outperform its peers in the near-term after a period of relative underperformance in 2H21 and a number of material milestones expected in 2022, which we believe will garner attention to the Company’s PEA-level Clearwater lithium brine project in Alberta,” he said. “With advancements being made on its DLE prototype and a potential resource update in the near-term, (in our view) the market should begin to ascribe more value to E3′s significant resource base with E3 currently trading at just $20 per metric ton versus peers at over $200/Mt.”

Expecting the lithium sector to continue to see increased activity “through advancing new development projects, M&A, and capital investments” and projecting prices to remain at multi-year highs, Mr. Mueller nominated Calgary-based E3 for Echelon’s “Q122 Top Picks Portfolio” list.

“With demand for battery-quality lithium expected to substantially increase before the second half of this decade, E3 is positioning itself to be a top-tier North American provider of lithium hydroxide monohydrate (LHM), a key component of lithium-ion batteries used in electric vehicles,” he said. “Having a substantial 100-per-cent owned resource base at approximately 7.0Mt lithium carbonate equivalent (LCE) in mining-friendly Alberta and a propriety DLE (direct lithium extraction) technology being developed in-house, E3 is unique among many of its lithium brine peers without having to outsource the technology and thereby truncating the potential project economics.”

“E3 has a number of impactful catalysts on the horizon over the coming 12 months, including (1) optimization of its DLE technology in 2022 including results from ongoing long-run sorbent testing at the Lab-Pilot Prototype and commissioning of its Field-Pilot Prototype; (2) drilling two to three “virgin” wells in H122 on its Clearwater property which will be pump tested and provide critical dynamic data to better under stand the aquifer response and a foundation for a potential resource update from Inferred to Measured and/or Indicated as well as potentially producing brines with lithium grades above 100 mg/L; (3) further flowsheet derisking following data gathered from the DLE Lab-Pilot and future Field-Pilot; and (4) initial LHM production expected in H222 in concert with its Field-Pilot DLE Prototype.”

Mr. Mueller maintained a “speculative buy” recommendation and $5 target for E3 shares. The average on the Street is $4.57.


Cormark Securities analyst Gavin Fairweather sees “ample” opportunities for strong returns following a fourth-quarter selloff in Canadian tech stocks brought on by market volatility.

In a research report released Wednesday, he announced his “best stock ideas” for 2022, consisting of five companies.

They are:

* Sangoma Technologies Corp. (STC-T) with a “buy” rating and $35 target. The average target on the Street is $37.38.

“Q1 results were a strong start to F22, highlighted by 5-per-cent sequential growth in recurring services revenue, a rebound in product sales and strong margins,” he said. “After exceeding annual guidance in four of the past five years, we think the F22 guide will once again prove conservative. While the balance sheet remains underleveraged and ready for tuck-in M&A, with STC trading at 2.5-times sales we could also see it being a target in a rapidly consolidating cloud communications space.”

* Softchoice Corp. (SFTC-T) with a “buy” rating and $35 target. Average: $34.29.

“With more than 70 per cent of gross profit tied to software, cloud and services, Softchoice is well positioned to outperform its hardware-centric peers given its TAM’s structural growth rates and ongoing hardware supply-chain bottlenecks,” he said. “In addition to mid-teens gross profit growth in 2022, investors can expect a step change in margins and FCF generation owing to Project Monarch. Given its exposure, we think SFTC should trade at a premium to peers vs. its current discount and think outperformance in coming quarters can drive a rerating.”

* Sylogist Ltd. (SYZ-T) with a “buy” rating and $16.25 target. Average: $17.31.

“Efforts to reposition SYZ for organic growth are expected to pay dividends in 2022 with the firm targeting high single-digits growth overall,” he said. “Management is indicating that the sales pipeline is expanding and sales cycles shrinking, and we think SYZ could exit F22 with low double-digit organic growth. We also expect the firm to continue its M&A program given commentary that deal flow is “as good as ever” and access to $65-million of credit.”

* Thinkific Labs Inc. (THNC-T) with a “buy” rating and $18 target. Average: $17.92.

“THNC’s growth is set to inflect higher near-term on paying client additions (increased marketing spend + conversion of recent free accounts) and ARPU expansion (upgrades + payments + pricing revisions),” he said. “Recent BuiltWith data confirms that usage of the Thinkific platform is accelerating. With the business expected to grow twice as fast as peers in C22 and the stock at half the multiple, we expect a large rerating in the shares.

* VitalHub Corp. (VHI-T) with a “buy” rating and $5.15 target. Average: $4.73.

“The demand environment for VHI’s patient flow tools remains strong in the UK and Canada,” he said. “VHI had a successful Q4 for new contracts and is entering Q1 with a solid pipeline, underpinning our expectation for 15-20-per-cent organic growth. The M&A pipeline also remains active, and we expect news on this front in H1/21. We expect further scaling of the business and rising margins to catalyze a significant rerating in the stock.”


In a research report on the Industrial Products space, National Bank Financial analyst Maxim Sytchev made a series of target price adjustments to stocks in his coverage universe on Wednesday.

“In the engineering space, we continue to like WSP and IBI,” he said. “Colliers is our go-to for the commercial real estate rebound. Construction will likely face a tougher H1/22E as COVID-related delays are bound to have a negative impact on productivity and potentially margins (we do however like NOA at these levels as WTI rebound and co’s exposure repositioning is yielding tangible benefits). In the Equipment space, both TIH and FTT offer upside (while we remain negative on RBA amid equipment tightness and hence lackluster GTV momentum). Stelco and AutoCanada provide upside assuming that their respective key “commodities” (HRC and used cars) enjoy the stronger pricing for longer. ATA remains in our must-own bucket as in an employee-constrained / healthcare-driven world, having exposure to a Tier 1 integrator that steadfastly productizes its topline is thematically attractive. SJ is a value pick for 2022, especially with lumber pricing catching a bid.”

He raised his targets for these companies:

  • ATS Automation Tooling Systems Inc. (ATA-T, “outperform”) to $64 from $60. The average on the Street is $61.10.
  • Finning International Inc. (FTT-T, “outperform”) to $46 from $45. Average: $43.22.
  • IBI Group Inc. (IBG-T, “outperform”) to $20 from $15. Average: $16.
  • SNC-Lavalin Group Inc. (SNC-T, “outperform”) to $44 from $42. Average: $42.31.
  • Stantec Inc. (STN-T, “sector perform”) to $80 from $72. Average: $77.21.
  • Stella-Jones Inc. (SJ-T, “outperform”) to $57 from $52. Average: $51.19.
  • Toromont Industries Ltd. (TIH-T, “outperform”) to $126 from $125. Average: $121.39.
  • WSP Global Inc. (WSP-T, “outperform”) to $209 from $185. Average: $190.79.

He lowered his targets for the following stocks:

  • Aecon Group Inc. (ARE-T, “outperform”) to $21 from $22.50. Average: $22.32.
  • AutoCanada Inc. (ACQ-T, “outperform”) to $59 from $60. Average: $60.26.
  • Stelco Holdings Inc. (STLC-T, “outperform”) to $55 from $62. Average: $56.21.


A group of equity analysts at TD Securities made a series of target changes to stocks in their coverage universes.

Jonathan Kelcher’s adjustments include:

  • Automotive Properties Real Estate Investment Trust (APR.UN-T, “buy”) to $16 from $15.50. Average: $14.34.
  • Boardwalk Real Estate Investment Trust (BEI.UN-T, “action list buy”) to $70 from $68. Average: $60.09.
  • Storagevault Canada Inc. (SVI-X, “hold”) to $7.50 from $7. Average: $7.36.
  • Tricon Residential Inc. (TCN-N/TCN-T, “buy”) to US$17 from US$16.50. Average: US$16.04.

Sam Damiani made these changes:

  • Dream Unlimited Corp. (DRM-T, “buy”) to $45 from $42. Average: $39.67.
  • First Capital Real Estate Investment Trust (FCR.UN-T, “action list buy”) to $23 from $22. Average: $21.36.

Daryl Young’s changes were:

  • Badger Infrastructure Solutions Ltd. (BDGI-T, “hold”) to $35 from $36. Average: $38.36.
  • CCL Industries Inc. (CCL.B-T, “buy”) to $80 from $81. Average: $80.78.
  • Colliers International Group Inc. (CIGI-Q/CIGI-T, “buy”) to US$175 from US$170. Average: US$159.
  • NFI Group Inc. (NFI-T, “hold”) to $23 from $25. Average: $28.
  • Park Lawn Corp. (PLC-T, “buy”) to $47 from $46. Average: $47.14.
  • Uni-Select Inc. (UNS-T, “buy”) to $30 from $29. Average: $28.42.


In other analyst actions:

* Based its valuation, UBS analyst Ross Fowler downgraded Fortis Inc. (FTS-T) to “neutral” from “buy” with a $61 target. The average on the Street is $58.90.

* Citing near-term catalysts and its valuation, TD Securities analyst Aaron Bilkoski upgraded Crescent Point Energy Corp. (CPG-T) to “action list buy” from “buy” with a $12 target, up from $19.50. The average is $9.33.

“We encourage investors to revisit CPG, as we believe it offers a strong conventional oil-weighted asset base, material FCF, comfortable leverage, a sustainable base dividend (with room to grow), and near-term Duvernay catalysts at a low valuation. For these reasons, we are increasing our rating,” he said.

* Seeing its investment proposition “increasingly attractive,” TD’s Meaghen Annett raised Canada Goose Holdings Inc. (GOOS-T) to “buy” from “hold” with a $59 target, down from $60 and 33 cents below the consensus.

“In our view, the risk/reward profile of GOOS shares has improved since the company reported in early-November 2021,” she said. “Based on our F2023 EPS forecast, GOOS is trading toward the low end of its historical average and at a discount to peers. Despite near-term headwinds, the balance sheet should enable management to continue to expand the DTC footprint. Upon a return of international tourism/traffic and growth in global luxury, GOOS should be well-positioned to leverage its high-margin, expanded DTC presence. In our view, the current valuation and potential growth opportunity support increasing our recommendation.”

* Feeling it “no longer provides sufficient return to meet our threshold for a Buy recommendation” after recent share price appreciation, TD’s Tim James lowered Andlauer Healthcare Group Inc. (AND-T) to “hold” from “buy” with a $55 target, topping the $53.33 average.

“We upgraded Andlauer Healthcare (AHG) to BUY from Hold in early-November due to share-price weakness and a steady increase in our target price since early-2021,” he said. “The stock has moved up significantly, and more quickly than expected since that time. Although we continue to have a very positive view on the company, the current valuation and remaining upside to our target price support a HOLD recommendation. Management has been delivering strong and predictable growth, along with acquisitions, which, we believe, will provide investors with exposure to specialized segments of the U.S. market, and greater long-term upside. Financial leverage has remained conservative, while recently deploying capital into what we view as winning acquisitions.”

* Mr. James increased his Airboss of America Corp. (BOS-T) target to $53 from $49. The average is $54.

“We are increasing our target price, primarily due to the impact of increasing our Defense segment target EBITDA multiple to 11.0 times from 10.0 times to reflect our expectation of positive investor sentiment regarding PPE-driven opportunities related to the ongoing pandemic and the long-term potential for its expanded portfolio of military protective equipment. The implied consolidated target EBITDA multiple of 10.6 times is now in line with the segment weighted-average multiples of its comparable group based on the trailing five-year average and current forward multiples.,” he said.

* TD’s Craig Hutchison hiked his target for Turquoise Hill Resources Ltd. (TRQ-T) to $23 from $18, keeping a “hold” rating. The average is $16.14.

* Wells Fargo analyst Roger Read upgraded Suncor Energy Inc. (SU-N, SU-T) to “overweight” from “equal weight” with a $34 target. The average on the Street is $39.11.

* Canaccord Genuity’s Scott Chan increased his target for Bank of Nova Scotia (BNS-T) to $96 from $89, maintaining a “buy” rating. The average is $93.66.

“We unfairly discounted BNS’s recent FQ4 results relative to peers as they were the first Bank to report that came right after initial unknown fears of the omicron variant,” he said.

* Keybanc initiated coverage of Ballard Power Systems Inc. (BLDP-Q, BLDP-T) with a “sector weight” rating.

* BMO Nesbitt Burns analyst Stephen MacLeod hiked his target for Dorel Industries Inc. (DII.B-T) to $32 from $16 with a “market perform” rating. The average is $40.

“We are resuming coverage following the completion of the Sports segment sale, which unlocked meaningful shareholder value,” he said. “Post-sale, we expect a renewed focus on improving earnings at Home & Juvenile; monetization of these segments is a potential outcome, but timing is uncertain. Nearer term, acute supply chain and raw material pressures are expected to persist, but with post-sale debt reduction Dorel is better positioned to weather these challenges. The stock has re-rated higher; in the absence of incremental sale clarity, upside will depend on improved earnings profile.”

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