Contained in the Market’s roundup of a few of at this time’s key analyst actions
In response to current share value appreciation, iA Capital Markets analyst Naji Baydoun is take “a extra impartial stance” on TransAlta Renewables Inc. (RNW-T), decreasing his advice to “maintain” from “purchase” on Thursday.
“RNW’s shares have appreciated by 13 per cent since we upgraded the inventory to a Purchase (from Maintain) in January 2022,” he stated in a analysis word. “On the time, this was a name on absolute share value and valuation ranges, as we famous that the shares had suffered from a short-term unfavorable market overreaction to the operational points at Kent Hills. This drop within the share value had opened up a shopping for alternative for buyers; since then, the shares have now recovered virtually all of their declines because the preliminary replace on Kent Hills in This autumn/21. Moreover, the shares are at present buying and selling at roughly 11.0 occasions ahead EV/EBITDA, up from 10.0 occasions in early 2022 and barely above their historic common of 10.5 occasions. We anticipate the inventory to proceed buying and selling at a reduction to friends, reflecting variations in development profiles and portfolio composition.”
Mr. Baydoun stated the score change doesn’t impression his view of the corporate’s basic outlook, which he known as “largely intact.” He added: “The corporate continues to generate steady revenues and cashflows from its contracted renewables and thermal property. Right now, we proceed to estimate comparatively steady EBITDA and CAFD/share by way of our forecast horizon.
Nonetheless, he did specific concern about TransAlta Renewables’ total development outlook, seeing “restricted near-term development potential (because of the restricted portfolio of drop-down alternatives from TA [excluding new project developments and/or M&A]), and (2) visibility on exterior development initiatives at the moment (i.e., acquisition alternatives). Though RNW’s shares proceed to lag total sector returns, we would like to attend for (1) a greater entry level, and/or (2) additional strategic developments earlier than accumulating the shares.”
Mr. Baydoun maintained a $19 goal for the corporate’s shares. The present common on the Road is $17.42, based on Refintiv information.
“RNW provides buyers(1) a greater than 2.5GW portfolio of gasoline & renewable infrastructure property, (2) a sexy dividend (5-per-cent yield, 80-85-per-cent CAFD payout), and (3) potential longer-term development by way of M&A,” he stated. “We’re downgrading RNW to Maintain (from Purchase) primarily based on the relative attractiveness of the shares in comparison with friends. Total, we imagine that the present development outlook is basically priced into the shares, and thus would await a greater entry level or additional strategic developments.”
TC Power Corp. (TRP-T) is “snug in its personal utility-like pores and skin,” stated Robert Kwan following current conferences with CEO Francois Poirier, which reaffirmed his confidence within the firm’s funding proposition
“With the top off over 20 per cent year-to-date (among the many finest within the Canadian midstream group and modestly larger than the Alerian U.S. midstream index), we’ve acquired many questions on TC Power’s sturdy share value efficiency, significantly given the shortage of catalysts, low commodity publicity, comparatively excessive leverage (in comparison with North American midstreamers) and no share buybacks, that are usually key themes which were topical for North American midstream buyers,” he stated. “Whereas we imagine the inventory could also be out of favour for North American midstream specialists, we imagine it has develop into the go-to inventory for buyers looking for a utility-like funding given its excessive diploma of regulated and contracted EBITDA, its conservative dividend protection (i.e., payout ratio of lower than 100 per cent of earnings) and its selffunded mannequin for fairness. 12 months-to-date, TC Power’s share value efficiency (up over 20 per cent) has considerably outpaced the Canadian regulated utility friends (down roughly 2 per cent on common).
“In our view, the important thing driver of the inventory has been a circulate of funds into TC Power’s shares by multi-sector buyers looking for a substitute for regulated utility shares given issues about rising 10-year rates of interest and the unfavorable historic impression on utility valuations … TC Power’s shares are buying and selling at a roughly 16.5 occasions ahead P/E, which has improved off the 15-year lows of 12 occasions, however nonetheless stay at a roughly 20-per-cent low cost to the typical Canadian regulated utility P/E. Additional, the present P/E is just modestly larger than the 10- yr trough P/E between 2005-2015. Whereas we don’t anticipate the inventory to garner a lot curiosity from midstream-focused buyers, we imagine buyers searching for elevated defensiveness (significantly with an “vitality” tilt) will proceed to be interested in TC Power’s shares.”
Mr. Kwan thinks a better “appreciation” for its upside as an vitality transition funding may “put it within the dialog with regulated utilities,” and he sees development potential “in each the near-term (e.g., emissions discount investments within the gasoline pipeline system), and optionality for development over the longer-term (e.g., hydrogen hubs close to sources of demand.”
“Different subjects that got here up which have generated broad investor curiosity embody: (1) inflation publicity, which is modest with a 1-per-cent change in CPI impacting EBITDA by roughly $7-million; (2) Keystone XL the place a revival doesn’t appear lifelike; and (3) Coastal GasLink (CGL) the place the corporate doesn’t foresee a state of affairs the place it isn’t constructed, and we sensed confidence in a business decision, probably by this summer time,” he stated. “Additionally, the corporate formalized the beforehand communicated plan to offer Indigenous communities the choice to take a 10-per-cent fairness stake in CGL.”
Regardless of current appreciation, Mr. Kwan views TC Power’s shares as “not that costly,” elevating his goal to $79 from $72 with an “outperform” advice. The typical is $68.50.
“We imagine buyers looking for a utility-like funding with better publicity to vitality (versus regulated utility shares) have helped drive TC Power’s shares larger,” he stated. ”Whereas an argument could possibly be made for TC Power’s inventory to commerce at parity, our revised valuation nonetheless incorporates a reduction (now 10 per cent versus 20 per cent beforehand) in comparison with what we used for the premium-valued Canadian regulated utilities, leading to an 18 occasions ahead P/E (up from 16.5 occasions that we beforehand used).”
In a analysis word titled Beat. Rinse. Repeat., Echelon Companions analyst David Chrystal stated BSR Actual Property Funding Belief (HOM.U-T, HOM.UN-T) continues to exceed his “excessive expectations” after “delivering one other quarter of outstanding monetary and operational outcomes.”
“Prime line development continues to speed up, with same-property income coming in at [an increase of] 10.6 per cent year-over-year,” he stated. “Leasing momentum remained sturdy within the fourth quarter, with new leases signed at lifts in extra of 20 per cent and renewal lifts accelerating. Administration’s 2022 steerage helps our view that BSR will proceed to ship sector-leading natural development within the yr forward, pushed by continued energy in market rents.
On Wednesday, shares of Little Rock, Ark.-based REIT, which owns and operates multifamily communities within the Sunbelt area of the USA, rose 4.7 per cent in Toronto a day after releasing its quarterly report.
Income rose 19 per cent year-over-year to US$34.1-million, narrowly beneath Mr. Chrystal’s US$35-million estimate, whereas earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) had been up 15.7 per cent to US$16.3-million, topping his US$15.7-million projection. Adjusted funds from operations per unit got here in at 17.9 US cents, leaping 34 per cent and in addition beating the analyst’s forecast (16.4 US cents).
“Uncharacteristically sturdy hire development within the REIT’s core markets seems to be persevering with into early 2022,” stated Mr. Chrystal. “Whereas nonetheless early days, on a weighted common foundation, market rents have elevated by 1.3 per cent throughout BSR’s core geographies year-to-date. This stacks as much as the 1.0-per-cent improve over the identical time-frame in 2021, and flat rents in every of the three prior years. Although we don’t anticipate 2022 hire development to match 2021 (up 17.4 per cent year-over-year), we anticipate additional market hire development because the seasonally stronger spring and summer time leasing seasons get below manner. Additional market hire development and a present mark-to-market alternative of 10-15 per cent, are supportive of administration’s same-property income steerage of 8-10 per cent in our view.”
The analyst sees BSR “well-positioned” to proceed to log margin growth, noting: “(1) important upside in in-place rents with 90 per cent of present leases beneath market charges, (2) ongoing market hire will increase anticipated by way of 2022, (3) strict price controls by way of leveraging economies of scale throughout the portfolio, and (4) lack of any hire management rules which might restrict the REIT’s skill to rapidly improve rents to market on lease expiry.”
After elevating his monetary estimates to account for stronger-than-anticipated web working curiosity margins and the expectation for additional growth, Mr. Chrystal elevated his goal for BSR items to US$23.50 from US$21, reiterating a “purchase” advice and preserving it within the agency’s “Prime Decide Portfolio.” The typical goal on the Road is US$22.40.
“We proceed to love BSR for its distinctive natural development profile, supported by unprecedented hire development throughout its core markets,” he stated.
Others making adjustments embody:
* Canaccord Genuity’s Christopher Koutsikaloudis to US$23 from $20.50 with a “purchase” score.
“Given the beneficial outlook for house fundamentals within the REIT’s markets and robust investor demand to accumulate properties within the U.S. Sunbelt, we view BSR’s present valuation as compelling,” he stated.
* Nationwide Financial institution’s Matt Kornack to US$24.50 from US$21.50 with an “outperform” score.
“This quarter’s outcomes expanded upon a formidable Q3 print with SPNOI up 19.3 per cent year-over-year (was 12.6 per cent in Q3/21),” he stated. “Admittedly, the identical property portfolio is a small portion of the general asset base given capital recycling; nonetheless, broader hire spreads (on each renewals and new leasing) are indicative of constant development ranges portfolio extensive. An additional constructive is that 90 per cent of in-place rents haven’t been marked to market at this level offering a runway and assist for administration’s steerage at 12-per-cent natural development and FFO/unit properly above our pre-quarter estimate. BSR’s markets are inherently landlord-friendly with turnover ranges of fifty per cent yearly, which permits it to rapidly seize adjustments in rental charges. We now have elevated our goal value meaningfully on the higher than anticipated NOI development prospects mixed with compressed cap fee assumptions. On the latter, our 4-per-cent assumed determine nonetheless has room to maneuver decrease, significantly if constructive expectations on rental development, past the present step, change materialize.”
* Desjardins Securities’ Kyle Stanley to US$24.50 from US$23 with a “purchase” score.
“Fundamentals in BSR’s core Texas markets stay extremely supportive of continued elevated hire development (10–15-per-cent loss to lease portfolio-wide),” he stated. “In our view, BSR trades at an unwarranted relative low cost (18-per-cent NAV low cost, 4.5-per-cent implied cap fee) vs Solar Belt comps (1-per-cent low cost, 3.9-per-cent implied cap fee) contemplating a forecast two-year 26-per-cent FFOPU CAGR [funds from operations per unit compound annual growth rate].”
* Raymond James’ Brad Sturges to US$25 from US$23 with a “sturdy purchase” score.
In a separate word, Mr. Chrystal initiated protection of Kentucky-based Flagship Communities REIT (MHC.U-T) with a “purchase” advice, touting its “compelling mix of development, worth and defence.”
“The REIT gives buyers with entry to a extremely steady and defensive asset class with a historical past of constant development all through all financial situations,” he stated. “We imagine the REIT is well-positioned to ship stable inside development by way of enhancing occupancy and better lot rents, in addition to exterior development given administration’s distinctive transactional monitor file”
The analyst sees Flagship, which owns a portfolio of manufactured housing communities throughout seven central/Midwest states, possessing a “sturdy” natural development outlook and “important” exterior development alternative.
“Flagship’s same-community portfolio has delivered midsingle-digit compounded annual development in common lot hire over the previous a number of years,” stated Mr. Chrystal. “This has been augmented by constant will increase in same-community occupancy as administration works to carry portfolio occupancy (at present 82 per cent) to a ‘stabilize’ stage (90 per cent plus). We anticipate that an more and more tight marketplace for different lodging choices (rental residences, single-family homeownership) will proceed to drive sturdy natural development inside Flagship’s present portfolio.”
“Flagship’s administration workforce grew the REIT’s predecessor entity at a compound annual fee of 18 per cent (lot rely) over 25 years. This development has continued with $180-million of acquisitions accomplished since its October 2020 IPO. We imagine there’s a important alternative for additional exterior development as Flagship’s market penetration in its present seven states is estimated to be lower than 1 per cent. Possession of MHCs is very fragmented, with lower than 20 per cent of all communities owned by the biggest 50 operators. Furthermore, we imagine that Flagship will proceed to attain outsized exterior development owing to (1) deep trade relationships, and (2) considerably much less competitors within the REIT’s markets from the biggest institutional platforms which skew extra in direction of coastal markets.”
The analyst set a US$23 goal, which is 7 US cents beneath the consensus.
After a better-than-expected gross sales consequence within the ultimate quarter of 2021, iA Capital Markets analyst Matthew Weekes continues to see “constructive momentum” for Ag Development Worldwide Inc. (AFN-T), establishing “sturdy” development potential on this fiscal yr.
Shares of the Winnipeg-based firm soared 8.5 per cent on Wednesday following the premarket launch of its quarterly outcomes, which Mr. Weekes summarized as “a bit blended and included some noisy gadgets.”
The spotlight was better-than-anticipated gross sales outcomes. For the quarter, it noticed an increase of 44 per cent year-over-year to $327-million, topping each Mr. Weekes’s $286-million estimate and the consensus of $290-million. Adjusted earnings earlier than curiosity, taxes, depreciation and amortization of $45-million, together with a constructive adjustment of $11-million associated to administration adjustments, additionally topped estimates ($38-million and $40-million, respectively).
“AFN continued to carry out strongly in its U.S. and worldwide geographies, which offset weak point in Canada,” the analyst stated. “Gross sales in Brazil grew virtually 270 per cent year-over-year, with energy in each Farm and Business merchandise, reinforcing the view that AFN has reached an inflection level in its Brazilian enterprise. The beat in gross sales relative to our forecast was pushed by the Business platform.”
“Backlog continued to develop, reaching one other file stage at quarter-end, which lends a level of visibility to the outlook. AFN expects one other yr of sturdy development in2022, which must be pushed by continued energy in US Farm and Worldwide markets, sturdy demand in Meals with the addition of Japanese Fabricators to the platform, and development within the Digital section which ought to profit from initiatives designed to extend penetration and the return of the commerce present gross sales channel with COVID restrictions easing. Tight provide chains will doubtless impression gross margins, however we imagine that AFN’s responsive pricing technique will assist mitigate these impact.”
Noting Ag Development’s publicity to Russia is “minimal,” Mr. Weekes stated the corporate’s 2022 steerage largely fell in step with his expectations, together with adjusted EBITDA of at the very least $200-million, which might be an increase of 15 per cent year-over-year.
”We’re adjusting our estimates to construct in larger income development in 2022, however offsetting this with decrease assumed margins,” he stated. “For 2023, we’re rising our estimates modestly, assuming high-singledigit development.”
That led him to boost his goal for Ag Development shares to $49 from $48 with a “speculative purchase” advice (unchanged). The typical goal is $49.78.
“We stay constructive on the expansion potential and market fundamentals for AFN’s world enterprise, together with development in high-quality meals processing markets and the evolving marketplace for Farm Know-how,” stated Mr. Weekes. “We stay up for AFN persevering with its deleveraging focus, in addition to refinancing the remaining convertible debentures due in 2022, which we anticipate to offer stability sheet de-risking and assist mitigate dangers related to litigation.”
Others making adjustments embody:
* Scotia’s Michael Doumet to $50 from $45 with a “sector outperform” score.
“The basics are higher than they’ve ever been for AFN. The corporate guided for 2022 EBITDA of at the very least $200 million; we forecast $208 million, which displays 18-per-cent development,” he stated. “Whereas the one-time prices recorded in 4Q21 make a dent in what we view as a slew of positives (supportive backdrop, file backlog, margin restoration, revenue development, stability sheet delevering, and so forth.), to us, two important positives stood out on the convention name: administration acknowledged that the incremental provisions associated to the bin incident had been ultimate and that its web debt to EBITDA would decline to 4.0 occasions by the tip of 2022 (from 5.0 occasions). In our view, this underscores what we anticipate shall be a a lot cleaner story in 2022 – and what we hope will result in an eventual constructive re-rate.”
* Desjardins Securities’ David Newman to $53 from $49 with a “purchase” score.
“We now have even larger conviction on AGI given sturdy fundamentals, resilience in opposition to metal and political headwinds, and a dissipating overhang from the bin incident,” stated Mr. Newman.
* Raymond James’ Steve Hansen to $50 from $45 with an “outperform” score.
“We’re rising our goal value on Ag Development Worldwide … primarily based upon our constructive view of the corporate’s stable 4Q21 print, file backlog, improved margin outlook, and enticing information underpinned by strong macro fundamentals and accelerating business momentum in key markets,” stated Mr. Hansen
* CIBC World Markets analyst Jacob Bout to $51 from $47 with an “outperformer” score.
“Regardless of Canadian gross sales being down 21 per cent in This autumn/21 (drought), total consolidated gross sales had been up 44 per cent pushed by sturdy worldwide gross sales (AFN’s funding in Brazil lastly paying off with gross sales in Brazil larger than Canada). We imagine that AFN’s globally various, full catalogue providing not solely units the corporate forward of its rivals, however will proceed to drive development long term. Whereas the bin collapse remediation work stays an overhang (mirrored in AFN’s depressed a number of), we do anticipate a significant decision in 2022 (and probably offsetting constructive information from insurance coverage and the FDGE declare by the tip of the yr,” he stated.
Although he sees its 2022 outlook as “stable,” Nationwide Financial institution Monetary’s Vishal Shreedhar expects Pet Valu Holdings Ltd.’s (PET-T) development to reasonable, prompting him to “stay on the sidelines” with its shares.
He was certainly one of a number of fairness analysts on the Road to make changes to their goal costs for the Markham, Ont.-based firm following the premarket launch of its fourth-quarter outcomes earlier than the bell on Wednesday, which despatched it hovering 8.8 per cent in the course of the buying and selling day.
“We view outcomes to be beneficial given a robust beat throughout key metrics and above-forecast 2022 steerage,” stated Mr. Shreedhar.
The specialty retailer reported income of $223.1-million, up from $203.4-million throughout the identical interval a yr in the past and above the analyst’s $217.7-million estimate with same-store gross sales development of 16.7 per cent (versus a 7.1-per-cent forecast). Adjusted EBITDA grew to $53.3-million from $47.8-million, which additionally topped Mr. Shreedhar’s forecast of $49.8-million.
“Steerage was extra beneficial than modelled; nonetheless, it equally confirmed our expectations of slowing tendencies,” he stated. “Administration initiated 2022 steerage as follows: 30 to 45 new retailer openings, income of $845-million to $870-million, sssg of 6 per cent to 9 per cent, adj. EBITDA of $187-million to $194-million (year-over-year development of two.6 per cent to six.4 per cent), adj. EPS of $1.37 to $1.44 (NBF was $1.28 and is now $1.39) and web capex of $20-million to $25-million.”
Sustaining a “sector carry out” advice, Mr. Shreedhar elevated his goal to $37 from $35 to mirror his larger monetary estimates. The typical is $40.71.
“We imagine PET’s execution has been sturdy and anticipate continued stable gross sales tendencies in Q1 earlier than moderating thereafter,” he added. “For the second, we imagine that trade situations stay wholesome, regardless of pervasive issues concerning inflation. We stay on the sidelines, significantly since EBITDA development will reasonable by way of 2022. As well as, we see higher worth elsewhere in our discretionary protection universe.”
Different analysts making goal changes embody:
* Laurentian Financial institution Securities’ Anthony Linton to $41 from $39 with a “purchase” score.
“We preserve our constructive view on Pet Valu following a robust quarter and we anticipate the corporate to take care of momentum into 2022, with a stable FCF profile offering flexibility to execute on the corporate’s development goals,” he stated.
* CIBC’s Mark Petrie to $42 from $43 with an “outperformer” advice.
“Pet Valu reported sturdy This autumn outcomes and launched a 2022 outlook each properly forward of our estimates and consensus expectations. Shares have pulled again available in the market sell-off and shift away from higher-multiple shares, however we imagine PET provides enticing defensiveness with a number of levers to exceed already wholesome trade development. Our 2022 estimates sit inside administration’s steerage, and we imagine upward revisions are extra doubtless than not,” he stated.
* RBC’s Irene Nattel to $42 from $40 with an “outperform” score.
Whereas forecasting elevated utilization and margin reflation later this yr, Raymond James analyst Andrew Bradford thinks “the near-term dynamic shall be much less encouraging” for buyers in Important Power Providers Ltd. (ESN-T), main him to decrease his score to “market carry out” from “outperform” on Thursday.
“Particularly 1Q22 and 2Q22 will nonetheless present uninspiring margins,” he stated. “Contemplating this within the context of Important’s regular share value appreciation motivates our Market Carry out score.
“Value inflation is on the minds of vitality and oilfield companies execs, a lot as it’s in most sectors nowadays. In some service traces, we discover producers have larger willingness to just accept elevated labour prices, metal, upkeep, gasoline, than for different service traces. Coiled tubing is clearly a kind of service traces the place producers are much less inclined to entertain elevated prices. In consequence, Important’s margins compressed in 4Q. Furthermore, margins aren’t doubtless to enhance materially in 1Q both; we’re consequently decreasing our 1Q22 EBITDA estimate to $3.8-million from $7.0-million. We totally anticipate scheduled pricing evaluations with core prospects will accommodate elevated enter prices over the approaching months, however value will increase past this appear unlikely till producers hear the phrases they’ve grown unaccustomed to within the trendy oilpatch: ‘I’m sorry, we don’t have gear for you.’”
Mr. Bradford maintained a 60-cent goal. The typical is 55 cents.
Calling it a “senior-quality EPCM in a developer market cap,” Nationwide Financial institution Monetary analyst Rabi Nizami thinks G Mining Ventures Corp. (GMIN-X) “permits buyers a chance to again an professional mine-building workforce as they embark on constructing the subsequent intermediate gold producer.”
“The journey begins with the de-risking and building of Tocantinzinho (TZ), an intermediate-scale challenge that may rank because the third largest gold mine in Brazil,” he stated. “We anticipate the inventory to re-rate and transfer up the Lassonde curve by way of de-risking of financing and building, and we additionally see worth in reserve upside that was not included within the current feasibility examine.”
In a analysis report launched Thursday, Mr. Nizami initiated protection of the Brossard, Que.-based firm with an “outperform” advice, believing its administration workforce is “uniquely certified to de-risk building.
“G Mining Ventures (GMIN) is based and led by the Gignac household, the principals of G Mining Providers (GMS), a full-service mining consultancy powerhouse, whose experience mining/engineering/building/administration will be verified by a profitable historical past of managing the development of huge gold mines on behalf of senior firms globally,” he stated. With GMIN, the workforce is aiming to proceed these successes, this time because the house owners, backed by GMS’s technical bench energy. The Gignac household, Administration and Board of Administrators personal 12 per cent of shares, Eldorado Gold Corp. (ELD-T) holds 19.9 per cent and establishments maintain 57 per cent.”
Calling Tocantinzinho “construction-ready” and anticipating financing package deal within the coming months, he set a goal of $1.65 per share. The typical is $1.99.
In different analyst actions:
* Cormark Securities’ David McFadgen downgraded Pollard Banknote Ltd. (PBL-T) to “market carry out” from “purchase” with a $35 goal, down from $46.50 and beneath the $48.13 common.
* Whereas its fourth-quarter outcomes missed his expectations and warnings the primary quarter “didn’t get off to an incredible begin,” Nationwide Financial institution Monetary analyst Tal Woolley raised his American Lodge Revenue Properties REIT LP (HOT.UN-T) goal to $5 from $4.50 with a “sector carry out” score. The typical is $4.11.
“The mathematics on the restoration in HOT’s money flows appears to be like enticing,” he stated. “The continuing restoration in RevPAR, mixed with decrease service requirements ought to drive larger revenues and margins long run (HOT administration hopes to get 100-200 foundation factors of margin efficiency over pre-COVID occasions). Mixed with excessive working and monetary leverage and the power to cost rents day by day (useful in an inflationary interval), the prospects for HOT’s development appears to be like interesting in an inflationary time. We predict this view sloughs off a unfavorable client response: how excessive can charges go on decrease service, with leisure prospects dealing with inflation in meals, housing and gasoline? Pre-COVID, HOT’s visitors was cut up 65/35 company/leisure; it has now reversed. Sustaining/ rising company occupancy may take time to unfold (we anticipate a burst as company American returns to the workplace, however video conferencing’s persistence may eat right into a full restoration.”
* Whereas its fourth-quarter outcomes fell in step with “muted estimates,” Echelon Companions analyst Andrew Semple expects wholesale market headwinds to restrict Ascend Wellness Holdings Inc.’s (AAWH-CN) development within the first half of the yr, main him to chop his goal for its shares by $1 to $12 with a “purchase” score. The typical is $11.56.
“Regardless of near-term stagnation in revenues and margins, Ascend is prone to expertise step-function development in H222 and past as its investments in vertical integration throughout its portfolio of excessive torque states bear fruit,” he stated. “Probably the most notable catalyst for Ascend is the launch of adult-use hashish gross sales in New Jersey within the coming months, which is predicted to be some of the enticing U.S. hashish markets. We word that administration indicated the Firm is certainly one of 5 license holders at present present process a ‘substantive evaluation’ course of with the state’s regulator, a constructive signal that it could be one of many first allowed to market if it clears this evaluation.”
“We made significant reductions to our estimates in response to administration’s H122 outlook. We proceed to anticipate New Jersey adult-use gross sales to start in Q222, however for modelling functions have push again first significant contributions from that till Q322.”
* Stifel’s Robert Fitzmartyn trimmed his goal for Chook Building Inc. (BDT-T) to $13.75 from $14.25 with a “purchase” score. The typical is $12.69.
“Chook’s technique is clearly paying off because the final three years have been characterised by strategically shifting the enterprise to decrease danger contracts with extra steady margin profiles,” he stated. “When evaluating 2021 to 2018, income is up 61 per cent, EBITDA has elevated 898 per cent and EPS has grown to $0.95 from a lack of 2 cents.
“Trying forward, the file backlog of $3.0-billion contains decrease danger contract constructions that ought to proceed to depict a much less dangerous enterprise. Furthermore, the stability sheet is in sturdy form in our view with 2022 web debt/EBITDA at 0.6 occasions offering capital allocation flexibility. The valuation stays very cheap.”
* JP Morgan’s Brian Ossenbeck resumed protection of Canadian Nationwide Railway Co. (CNR-T) with a “impartial” score and $171 goal in addition to Canadian Pacific Railway Ltd. (CP-T) with an “obese” advice and $113 goal. The averages on the Road are $163.42 and $106.07, respectively.
* Nationwide Financial institution’s Shane Nagle raised his Ero Copper Corp. (ERO-T) goal by $1 to $20.50 with a “sector carry out” score. The typical is $25.23.
“We reiterate our Sector Carry out score as our estimates have in mind Ero’s self-funded development profile, incremental exploration potential, near-term growth alternatives and low working prices,” he stated. “The corporate’s shift in technique in direction of creating Boa Esperança and mine growth at MCSA deteriorates the near-term FCF outlook and brings improvement/inflation dangers. Delivering extra updates on the Pilar Deepening challenge/Boa Esperança shall be a key catalyst alongside exploration outcomes all through 2022.”
* CIBC’s Cosmos Chiu raised his goal for Franco-Nevada Corp. (FNV-T) to $260 from $240, exceeding the $207.14 common, with an “outperformer” score.
“Regardless of barely decrease manufacturing from valuable metals, which is in line with producer steerage, FNV is properly positioned to proceed to profit from rising commodity costs, and with restricted publicity to inflation we anticipate to see continued sturdy money circulate technology,” stated Mr. Chiu.
* CIBC’s Dean Wilkinson reduce his InterRent Actual Property Funding Belief (IIP.UN-T) goal by $1 to $18.50 with a “impartial” score. The typical is $19.71.
* Mr. Wilkinson additionally reduce his goal for items of Minto Condominium Actual Property Funding Belief (MI.UN-T) to $26.50 from $27.50 with an “outperformer” score, whereas Canaccord Genuity’s Christopher Koutsikaloudis raised his goal to $28.50 from $26.50 with a “purchase” score and Scotia’s Mario Saric moved his goal to $24.75 from $24.25 with a “sector carry out” score. The typical is $27.36.
“We proceed to view Minto as a core long-term holding for buyers seeking to acquire publicity to the Canadian multi-family sector, given the REIT’s high-quality, properly positioned house portfolio in Canada’s largest markets,” stated Mr. Koutsikaloudis.
* CIBC’s Krista Friesen decreased her Linamar Corp. (LNR-T) goal to $90, remaining above the $89.60 common, from $95. She saved an “outperformer” score, whereas Scotia’s Mark Neville reduce his goal to $90 from $105 with a “sector outperform” score.
“In a vacuum, LNR’s This autumn outcomes had been disappointing, notably in Industrial – which was telegraphed, at the very least directionally,” stated Mr. Neville. “Nonetheless, LNR shares are down virtually 35 per cent because the firm’s intra-Q replace, together with 22 per cent since February twenty third (i.e., the day earlier than Russia invaded Ukraine). In that context, we’re much less unfavorable on the This autumn print. Furthermore, administration indicated it might be energetic available in the market shopping for its personal inventory when its blackout interval ends (can begin shopping for on Monday), one thing it has been unable to do year-to-date (given blackout restrictions).”
* Seeing “momentum into 2022,” Nationwide Financial institution’s Travis Wooden bumped up his Peyto Exploration & Improvement Corp. (PEY-T) goal to $15.50 from $15 with an “outperform” score, whereas Stifel’s Robert Fitzmartyn raised his goal to $17 from $16.50 with a “purchase” score. The typical is $14.65.
“Peyto’s fourth quarter outcomes had been in step with the market although money technology bested our estimates. Subsequent to year-end it introduced a $22-million personal firm acquisition complementary to its present place at Brazeau and into Chambers. We proceed to look at an outlook with sturdy quantity development and sizable deleveraging solidifying a prospect for additional dividend development in 2023,” stated Mr. Fitzmartyn.
* Regardless of a fourth-quarter beat and particular dividend announcement, Acumen Capital’s Jim Byrne trimmed his Richards Packaging Revenue Fund (RPI.UN-T) goal to $68 from $80 with a “purchase” score, citing “a number of contraction within the peer group.”
“The corporate continues to generate important free money whereas navigating at this time’s difficult enterprise setting. We might view additional M&A as a constructive catalyst for the items,” stated Mr. Byrne, who’s the lone analyst protecting the inventory.”
* Desjardins Securities’ Benoit Poirier raised his Stella-Jones Inc. (SJ-T) goal to $58 from $52 with a “purchase” score. The typical is $52.44.
“We’re very happy with the 2022–24 strategic plan unveiled with 4Q outcomes. We derive adjusted EPS CAGR of 13 per cent from 2019–24, thanks partly to the regular allocation of $130–140-million per yr towards share buybacks. We estimate that SJ’s leverage ratio ought to stay at 2.0–2.2 occasions in 2022–24, which gives loads of monetary flexibility to proceed its disciplined M&A method. We encourage buyers to revisit the title given the very enticing potential return embedded within the plan of 70 per cent.”
“We estimate that SJ could possibly be price $65 per share by 2024 (70-per-cent upside over present ranges, together with dividends). We derive one other $8 per share of worth creation if administration can execute on its M&A pipeline of US$200-million of income. In an setting of elevated market volatility, we imagine this returns profile is sort of compelling for an organization with pretty resilient attributes.”
* Citing a “weak” macro image, Raymond James’ Rahul Sarugaser reduce his Village Farms Worldwide Inc. (VFF-Q, VFF-T) goal to US$16 from US$19 with a “sturdy purchase” score. The typical is US$13.69.
“Given VFF’s comparatively flat market share by way of 2021 (which we imagine was by design), we stay conservative in our income estimate, which is why we trim our goal value … Sustaining our conviction that VFF is, bar none, the most effective operator within the Canadian hashish sector we preserve our Sturdy Purchase score,” he stated.