Inside the Market’s roundup of some of today’s key analyst actions
After Tuesday’s release of “solid” third-quarter financial results, RBC Dominion Securities analyst Paul Treiber sees Shopify Inc. (SHOP-N, SHOP-T) securing “broad-based market share gains and positive leading indicators across numerous segments, including international, enterprise, POS, B2B and even new emerging social commerce channels.”
“We expect Shopify’s premium valuation multiple to be sustained,” he added in a note titled Leveling up.
The Ottawa-based e-commerce giant’s TSX-listed shares surged 21.5 per cent following the premarket announcement, which Mr. Treiber attributed to “materially improved investor visibility to long-term growth and margins.” Revenue of US$2.16-billion was 2.4 per cent above the consensus forecast on the Street of US$2.11-billion, while adjusted earnings per share was 8 US cents above expectations (35 US cents versus 27 US cents).
Touting its “broad-based momentum,” Mr. Treiber said: “Shopify is seeing strong market share gains (more than 2 times e-commerce growth in key markets) across a number of key end markets. GMV [gross merchandise value] was solid, up 24 per cent year-over-year to $69.7-billion, ahead of consensus at $67.8-billion due to international (more than 30 per cent Y/Y), POS (27 per cent Y/Y), B2B (145 per cent Y/Y), and enterprise. MRR [monthly recurring revenue] was up 28 per cent Y/Y to $175-million, slightly above consensus at $174-million. MRR implies healthy new merchant adds, considering Shopify has already lapped non-Plus price increases (commenced April 2023). Q4 guidance calls for revenue up mid-to-high 20 per cent Y/Y, ahead of consensus at 23 per cent
“High-teens, low 20-per-cent margins are the new normal. Adj. EBIT margins rose to 18.4 per cent Q3 and guidance implies 19.6-21.0 per cent Q4, above consensus at 15.5 per cent and 18.3 per cent, respectively. Management sees margins sustained at FY24 levels, which balances profitability with re-investments for growth. Following Q3, we are increasing our FY25 estimates to $11.05-bilion revenue (26 per cent Y/Y) and $1.63 adj. EPS, up from $10.68B and $1.32 previously.”
Seeing “improving visibility to long-term growth,” he thinks Shopify “increasingly justifies its premium valuation,” raising his target for its shares to US$130 from US$100 with an “outperform” rating alongside his higher financial forecast. The average target on the Street is US$104.19, according to LSEG data.
“Shopify is now trading at 13 times NTM EV/S [next 12-month enterprise value to sales], in line with its 3-year pre-COVID average (13 times) and above fast-growing SaaS peers (10 times),” he said. “Our $130.00 price target reflects our revised financial estimates and equates to 12 times CY26e EV/ S, up from 10x previously, given better visibility to long-term growth and margins. Our target multiple is justified above peers, given Shopify’s faster NTM revenue growth (27 per cent vs. peers at 18 per cent) and increasing visibility to sustained strong growth over the long-term.”
Elsewhere, despite calling the results “impressive,” ATB Capital Markets’ Martin Toner downgraded Shopify to “sector perform” from “outperform” with a $145 target, up from $120, on valuation concerns.
“We think the post-earnings rally reflected sentiment that Shopify’s growth outlook has improved, driven by large new customers and an impressive product pipeline,” said Mr. Toner. “At 14 times 2025 sales, SHOP’s valuation is now at the high end of the post-Covid range, and while we believe the Company is very well positioned, we are downgrading the stock to Sector Perform. We update our numbers to reflect higher GMV estimates, and accordingly raise our PT to $145.00 (from $120.00). Despite increasing revenue growth and attach rates in our DCF valuation, which forecasts $1.3-trillion in GMV in 2033, the return to target for the stock is slightly negative.”
Other analysts on the Street making target adjustments include:
* Citi’s Tyler Radke to US$143 from US$103 with a “buy” rating.
“Q3 was Shopify’s highest-quality beat of 2024, as all key KPIs (including take-rates) easily cleared expectations while reaccelerating Q4 growth outlook with continued opex discipline drove another quarter of positive revisions,” said Mr. Radke. “The results validate that SHOP is accelerating share gains and moving up-market all in an impressively efficient fashion, which is setting the stage for accelerating revenue/FCF growth heading into 2025. There wasn’t much to pick at, but the 20-per-cent-plus stock move surprised us, and we’re sensitive about over-extrapolating two consecutive quarters of opex declines (driven by performance marketing variability). Additionally a portion of Q4 revenue acceleration was accounting dynamics (PYPL partnership). With share up 78 per cent since adding to Citi’s U.S. Focus List in June, we believe considerable asymmetric upside from our thesis has been captured, thus we’re retiring the name from the Focus List, but maintaining Buy/High-Risk. Our above-street estimates drift modestly higher.”
* DA Davidson’s Gil Luria to US$130 from US$84 with a “buy” rating.
“3Q24 results provided additional evidence that Shopify is gaining share across commerce and adjacent markets with an innovative platform solution at a lower relative TCO,” said Mr. Luria. The stock gapped up more than 20 per cent following better than expected top line acceleration (26 per cent vs. 21 per cent in 2Q24) and FCF margin expansion. Management issued strong 4Q24 guidance including mid-to-high-twenties revenue growth and stable FCF margins despite 4Q GM percentages being negatively impacted by aseasonal revenue mix shift. We are reiterating our BUY rating and raising our price target ... based on a 16 times 2025 revenue, a justified premium given Shopify’s market leadership.”
* National Bank’s Richard Tse to US$140 from US$100 with an “outperform” rating.
“The bottom line is that when the Company’s operating leverage is paired with execution on a number of growth avenues (International, Enterprise, B2B and Point-of-Sale (POS), there remains untapped value despite its near-term valuation on FY25 numbers,” said Mr. Tse.
* Scotia Capital’s Kevin Krishnaratne to US$115 from US$80 with a “sector perform” rating.
“SHOP delivered a strong Q3, with the biggest surprises in GMV which saw an acceleration in growth vs. Q2, and on FCF which beat by 16 per cent,” he said. “SHOP now enters the holiday season where we’re expecting GMV and merchant solutions growth to remain at least consistent with Q3 trends and FCF margins to push even higher (130 bps quarter-over-quarter from 19.5 per cent to 20.7 per cent). SHOP’s position as category leader is helping it take share of retail globally and from all merchant types (online, offline, SMB, Enterprise). Shares closed up 25 per cent [Tuesday], with the stock now trading at 24.8 times CY25E EV/GP. We are SP-rated solely on valuation, continuing to view SHOP as a core holding. We see potential for further upside heading into BFCM which likely sees constructive news flow (industry sources suggest a resilient consumer), while we’ve previously noted positive share performance leading into the event.”
* TD Cowen’s Daniel Chan to US$100 from US$72 with a “hold” rating.
“We continue to believe that Shopify is a solid company that will continue to lead the market and win market share; however, we believe much of this is already priced in. We believe 20-per-cent-plus growth throughout the mid-term is possible, with expanding FCF margin; however, we believe the shares are currently pricing in a scenario of 25-per-cent growth and 25-per-cent long-term FCF margin,” said Mr. Chan.
* KeyBanc’s Justin Patterson to US$130 from US$80 with an “overweight” rating.
“SHOP reported a strong 3Q print and 4Q guide above expectations as it assumes top-line acceleration. Top-line outperformance was driven by Shopify Plus momentum, payments penetration, SSS growth, and strength in Europe. Our estimates move higher on better than expected 4Q guidance driven by Shopify Plus market share gains,” he said.
* Wedbush’s Scott Devitt to US$115 from US$72 with a “neutral” rating.
“To justify Shopify’s premium valuation relative to peers, we think the bull case assumes material take rate expansion over time. While we acknowledge the favorable setup developing in 2025, we think the long-term take rate opportunity is constrained and continue to highlight the company’s premium valuation and structurally lower margin versus software peers (Shopify has 50-per-cent gross margin),” he said.
* Barclays’ Trevor Young to US$93 from US$70 with an “equalweight” rating.
* Wells Fargo’s Andrew Bauch to US$120 from US$90 with an “overweight” rating.
* CIBC’s Todd Coupland to US$135 from US$85 with an “outperformer” rating.
* Piper Sandler’s Clarke Jeffries to US$94 from US$67 with a “neutral” rating.
* JP Morgan’s Colin Sebastian to US$121 from US$76 with an “overweight” rating.
* Baird’s Arjun Bhatia to US$126 from US$90 with an “outperform” rating.
* Oppenheimer’s Ken Wong to US$130 from US$90 with an “outperform” rating.
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TD Cowen analyst Menno Hulshof emphasized the third-quarter financial results from Suncor Energy Inc. (SU-T) featured an “outsized” funds from operations beat driven by “very strong” execution as well as a “surprise” achievement of its net debt target.
“SU delivered on many fronts in Q3, including achievement of its $8-billiob ND target (sooner-than-expected), a 5-per-cent on-cycle divi hike, and record operating results across almost all upstream/downstream segments,” he said. “Record operating. performance and utilization drove a 25 per cent FFOPS [funds from operaitons per share] beat (now five consecutive quarterly beats), which reaffirms our decision to upgrade to BUY with Q2 results.”
After the bell on Tuesday, the Calgary-based company reported an adjusted profit of $1.48 a share for the quarter, blowing past the with analysts’ average estimate of $1.08 a share, according to LSEG data.
“Very strong volumes of 829mbbl/d [thousand barrels per day] (3 per cent above consensus/TD) partially account for FFOPS beat,” the analyst said. “Production of 829mbbl/d beat consensus/TD by 3 pe rcent while upgrader utilization averaged 99 per cent (new Q3 record). Similarly, FFOPS of $2.98/sh landed well ahead of consensus/TD (26 per cent above consensus). The strong beat vs. our estimates was well-balanced across Oil Sands and R&M (and even larger for E&P).
“We are now modeling 2024 production of 811mbbl/d which is the top-end of SU’s 2024 guidance of 770-810mbbl/d, which is unchanged (as is the rest of 2024 guidance).”
Mr. Hulsof focused on Suncor’s ability to successfully achieve its updated net debt target of $8-billion, which was announced during its Investor Day event. That led to announcement of a 5-per-cent increase to its quarterly dividend (to 57 cents per share).
“ND fell 12 per cent to $8-billion (SU definition) during Q3, down from $9.1-billion exiting Q2,” he said. “Recall, at $8-bilion ND, RoC increases to ‘at-or-near’ 100% of FCF, up from 75 per cent prior.
“[Suncor] announces 5-per-cent ‘on-cycle’ base divi hike: We expected this since SU has increased the divi with Q3 results since 2021, following a decision to cut in 2020.”
Maintaining his “buy” rating for Suncor shares, Mr. Hulsof increased his target to $62 from $60. The average on the Street is $59.79.
“SU has beat the Street for five consecutive quarters under CEO, Mr. Rich Kruger’s, leadership,” he said. “We remained on the sidelines with a HOLD rating through the release of Q2 results as we were uncertain that the streak of quarterly beats reflected enduring improvements, especially when considering the cultural/operational inertia within large companies. With another strong quarter in the books our target price increases to $62/sh on revised financial estimates, we are maintaining our BUY rating. We highlight: 1) that it is now returning ‘at-or-near” 100-per-cent of FCF through buybacks; 2) no material spending on new bitumen capacity through 2028 (while full consolidation of Fort Hills ensures the upgraders are kept full); and 3) 100mbbl/d of growth by 2026 (vs. 2023), with capex simultaneously falling to less than $6-billion (excl. capital leases). On our estimates, SU trades at a strip 2025E FCF yield (total capex) of 9.5-per-cent (peers 7.8-11.9 per cent) and a 2025E EV/DACF multiple of 5.4 times (peers 4.2-8.4 times).”
Elsewhere, Scotia Capital’s Jason Bouvier hiked his target to $62 from $59 with a “sector perform” rating.
“There are good quarters, bad quarters, and great quarters,” said Mr. Bouvier. “This was a great quarter. I coach my son’s hockey team. When one player on the team is playing well, I ask him how he’s doing … and he says ‘I’m Buzz’n Coach!’ With a quarter like that I can assure you that several players on Rich’s team are Buzz’n! Our hockey team recently played a game where we were down by 2 goals, with 2 minutes left. We pulled the goalie, scored with 45 seconds left. Gained puck control again, pulled goalie and scored again with around 20 seconds left. The game ended in a tie, but we were ecstatic. I suspect Rich’s team feels much the same way. Although if I know Rich, he will point out that this game isn’t over yet, and he isn’t shooting for a tie! Congrats to the SU team.”
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Citing near-term uncertainty, TD Cowen analyst Brian Morrison downgraded Linamar Corp. (LNR-T) to a “hold” rating from “buy” previously.
“We believe there is long-term attractive value in Linamar but with a lack of near-term catalysts, our concern is that it will remain a low multiple ‘value trap’ nearterm despite its strong FCF outlook.” he said. “We state this as the Q4/24 results are forecast to be weak, there is greater uncertainty in the Industrial outlook, Mobility continues to be hampered by consumer demand and dealer inventory levels approaching equilibrium, and tariff uncertainty is bound to remain an overhang at least early into Trump’s presidency. With these near-term headwinds, we feel compelled to lower our target multiple upon our revised earnings outlook, that results in our target price revision to $68.00. We feel a HOLD recommendation is appropriate at this time.”
After the bell on Tuesday, the Guelph, Ont.-based manufacturing company reported third-quarter results that fell in line with the Street’s expectations “with the Industrial contribution outperforming, while the Mobility contribution was disappointing.” Earnings per share of $2.35 ended up a penny ahead of the consensus forecast.
“Management lowered its guidance for both 2024/2025. This was not surprising given recent reports from its peers/customers that industry conditions continue to soften within both the Agriculture/AWP segments,” said Mr. Morrison. “That stated, the magnitude of the decline was greater than we anticipated within Industrial, with revisions also taking place within Mobility. This will make for a notable decline in the y/y financial performance in Q4/24, and lead to downward consensus revisions for both 2024/2025.
“On the Positive: Linamar is continuing its incredible track record of strong FCF generation. This has led to rapid deleveraging of its balance sheet to 1.0 times following three notable acquisitions in 2023. We were pleased management announced an NCIB and its intention to be active. It should be an accretive allocation of capital, but may not prove the catalyst we had hoped with growing uncertainty within its revised outlook.”
Mr. Morrison dropped his target for Linamar shares to $68 from $89. The average is $81.
Others making changes include:
* CIBC’s Krista Friesen to $84 from $85 with an “outperformer” rating.
* Scotia’s Jonathan Goldman to $75 from $77 with a “sector perform” rating.
“Our recent downgrade was primarily a macro call as we did not think consensus was fully reflecting the incrementally negative outlook in Ag and Access,” said Mr. Goldman. “While that is essentially how things played out, management deserves credit for controlling the things it can control, namely: continued share gains in Ag; flexing down capex; and launching an NCIB. We lowered our 24E/25E EBIT by 2 per cent/2 per cent (we were already below the Street). We forecast strong FCF generation in 2024 and 2025 ($800 million in aggregate from 4Q through 2025), which provides ample dry powder for the buyback program, especially with leverage at 1.1 times exiting 3Q. LNR shares trade at 3.6 times EV/EBITDA on our 2025E.”
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Raymond James analyst Steve Hansen sees a market inflection approaching for Titanium Transportation Group Inc. (TTNM-T).
Accordingly, seeing the “worst in [the] rear view,” he raised his recommendation for its shares to “strong buy” from “outperform” following the release of “strong” third-quarter results.
“We are increasing our target price on Titanium Transportation Group Inc. (TTNM) and upgrading our rating to Strong Buy (vs. Outperform prior) based upon: 1) encouraging macro signals pointing to an inflection in NA freight markets (⇑ tender rejections, ⇑ spot rates); 2) TTNM’s ability to leverage this recovery given the firm’s strong operating discipline & expanded U.S. presence (Crane acquisition); and 3) TTNM’s compelling valuation (5.3 times FY25 EBITDA, 0.9 times Price/Book),” he said.
Mr. Hansen raised his target to $4 from $3.50. The average is $4.20.
Elsewhere, Desjardins Securities’ Benoit Poirier raised his target to $4 from $3.75 with a “buy” rating.
“TTNM’s 3Q performance was quite respectable from an operating perspective, in our view, especially when compared with the disappointing results from some of the U.S. TL trucking peers,” he said. “With the integration of the Crane acquisition completed (currently in the process of optimization) and the opening of the eighth U.S. brokerage office, we view TTNM’s now clean/lean operations as well-positioned to benefit as the trucking market begins to turn and deliver attractive incremental margins for shareholders.”
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Desjardins Securities analyst Gary Ho saw Tuesday’s 4.2-per-cent drop in shares of Dentalcorp Holdings Ltd. (DNTL-T) as “unwarranted,” blaming it on “some profit-taking (shares up 21.7 per cent vs 1.3 per cent for the S&P/TSX in the past month)” and believes it “presents a buying opportunity.”
Before the bell, the Toronto-based network of dentists and dental practices reported adjusted EBITDA of the quarter of $68.9-million, topping Mr. Ho’s $67-million estimate by 2.8 per cent as well as the consensus projection of $66.8-million. EBITDA margin of 18.4 per cent also topped Mr. Ho’s expectation (18.2 per cent) and its own guidance of 18.1 per cent “given operating leverage on corporate infrastructure.”
“DNTL achieved its $20-million-plus acquired EBITDA for 2024, with several more deals potentially closing before year-end,” the analyst said. “We now model a slight pick-up to $26-million for 2025. Valuation remains at the lower end of its historical 7.0–7.5 times range.
“Momentum in the CDCP program, with more than 60,000 CDCP [Canadian Dental Care Plan] patients served to date. The government reported that 2.8 milion applicants have been approved, but only ~1m patients have received care to date, implying a decent runway for patient adoption. We believe that as the program is rolled out in 2025 to Canadians aged 18–64, this will benefit the volume side of DNTL’s SPRG equation.”
Seeing “solid progress toward its 2024 key guidance metrics,” Mr. Ho thinks Dentalcorp’s guidance “appears more than achievable and we favour management’s execution on 4-per-cent SPRG, 20 basis points plus margin expansion, disciplined M&A, deleveraging and FCF growth.”
Reiterating his “buy” rating for its shares, the analyst increased his target to $12 from $11.75, which is the current average.
“We view DNTL as a quality compounder given its (1) proven M&A playbook in a fragmented market; (2) organic growth outlook; (3) compelling financial profile with resilient top-line and FCF growth; and (4) recession-resistant attributes,” he said.
Elsewhere, other changes include:
* Stifel’s Daryl Young to $12.50 from $11.50 with a “buy” rating.
“Overall, Q3 was a solid result with predictable cash flow generation, and continues on the string of noise free quarters which is driving a melt-up in DNTL’s valuation,” said Mr. Young. “Looking forward, we expect DNTL to continue executing on its self-funded growth algorithm for 10-per-cent top line, and 20-40 basis points of margin expansion via operating leverage, supporting the stock compounding at 10 per cent annually, in our view.”
* TD Cowen’s David Kwan to $12 from $11 with a “buy” rating.
“DNTL has been building solid momentum throughout 2024 with strengthening organic/ total growth, margins, Adjusted FCF, along with material declines in leverage. We expect these strong performances to continue in 2025, with the CDCP and its AI partnership providing additional tailwinds. Despite the more than 40-per-cent increase in its stock year-to-date, we think DNTL is attractively valued at 10.6 times EV/EBITDA (C2025E),” he said.
* RBC’s Douglas Miehm to $13 from $11 with an “outperform” rating.
“Despite strong Q3 results that were approximately 2 per cent/3 per cent ahead of consensus revenue/adj. EBITDA, DNTL shares closed down 4 per cent [Tuesday], likely due to some profit taking as the stock had rallied 10 per cent month-to-date, leading into the Q3 results,” he said. “While Q4 guidance was light vs. consensus, in our view it reflects a conservative outlook (similar to the Q3 guide and outcome).”
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Desjardins Securities analyst Jerome Dubreuil thinks the third quarter was “a reminder of the volatility” that Converge Technology Solutions Corp.’s (CTS-T) business faces.
“We expect the company will continue to see pricing pressure and cautiousness from its clients over the next few quarters, which has led us to once again cut our forecast significantly,” he said. “That said, CTS’s low leverage enables management to be opportunistic with buybacks and steadfast in its strategy of moving CTS higher in the value chain, and to prepare itself for the more attractive market we anticipate in 2H25.”
Before the bell on Tuesday, the Toronto-based IT service management company reported revenue, profit and adjusted EBITDA that all fell with ranges provided in the preliminary results on Oct. 24.
“As we expected, updated 2024 guidance implies a continued EBITDA shortfall in 4Q as the yearly guidance was revised downward by $19-million (at the midpoint) while 3Q EBITDA was C$13-million below the 3Q guidance provided in August,” the analyst said.
“Improvement not immediate, but a decent setup for 2H25: While we expect top-line pressure to persist going into 1H25, several details should help CTS return to growth in 2H25. Management anticipates that the IBM mainframes downcycle could be relatively short given the upcoming refresh schedule. Moreover, Windows 10 reaching end of support in October of next year should improve demand for end-user devices in 2025. In addition, management is maintaining its 10-per-cent growth objective for account executives in North America despite top-line pressure — management has historically stated that sales from new account executives typically double in year 2.”
While investors met the release with enthusiasm, sending its shares 5.95 per cent higher on Tuesday, Mr. Dubreuil cut his revenue and earnings projections through 2025, leading him to drop his target for Converge shares to $5 from $7 with a “buy” recommendation. The average is $5.54.
Elsewhere, other changes include:
* Eight Capital’s Adhir Kadve to $6 from $9 with a “buy” rating.
“Converge released Q3/24 results in-line with pre-released ranges and adjusted down guidance accordingly,” said Mr. Kadve. “Uniform with headwinds seen in enterprise budgets, Converge is navigating a challenging demand environment in North America and witnessed deal slippage into Q4 and F25. That said, the company noted that 25 per cent of these deals have been booked in Q4-to-date, with F25 to offer stabilization and demand recovery. Given the ongoing weakness in the stock, M&A remains off the table, and we like that capital is being allocated towards shareholder returns. Our updated estimates reflect adjustments made to F24 guidance, and we exercise caution with a back-half F25 recovery. We think consistent execution against targets will re-rate this stock from depressed levels today.”
* TD Cowen’s David Kwan to $4.50 from $5 with a “buy” rating.
“Given the recent macro-driven weakness in hardware spending could persist well into 2025 and potential tax-loss selling heading into year-end, we believe patience is needed. However, at 5.4 times EV/EBITDA (C2025E), CTS continues to trade at the bottom end of the peer group and its historical range. We expect the surge in buyback activity following the disappointing Q3 pre-release to continue,” said Mr. Kwan.
* Ventum Capital Markets’ Rob Goff to $5.20 from $6.20 with a “buy” rating.
“We consider CTS shares to be significantly undervalued at 5.9 times/5.0 times 2024/25 EV/EBITDA while offering an FCF yield of 25 per cent/17 per cent,” said Mr. Goff.
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In other analyst actions:
* In a report wrapping up earnings season for Canadian healthcare companies, Stifel’s Justin Keywood raised his targets for CareRx Corp. (CRRX-T, “hold”) to $2.50 from $2.25 and Lifespeak Inc. (LSPK-T, “hold”) to 60 cents from 50 cents. He lowered his HLS Therapeutics Inc. (HLS-T, “hold”) to $3.25 from $3.50. The averages are $3.69, 39 cents and $5.65, respectively.
* TD Cowen’s Steven Green lowered his target for B2Gold Corp. (BTO-T) to $7 from $7.50 with a “buy” rating, while National Bank’s Don DeMarco bumped his target to $6 from $5.75 with an “outperform” rating. The average is $5.97.
“Q3 results were below expectations, and production is tracking to the lower end of guidance as higher grade zones at Fekola have been delayed until 2025,” said Mr. Green. “B2′s net debt has climbed through 2024, however, we believe the company remains well positioned to deliver Goose to production.”
* CIBC’s Scott Fletcher cut his Computer Modelling Group Ltd. (CMG-T) target to $14.50, below the $14.64 average, from $15 with an “outperformer” rating.
“CMG posted weaker-than-expected FQ2 results, with revenue 3% below consensus and in-line adj. EBITDA. We expect quarterly results will be somewhat overshadowed by the close of the company’s second material acquisition, Sharp Reflections. After adding Sharp to our model and adjusting our F2025 estimates to reflect the lowered growth expectations for F2025, our price target goes from $15.00 to $14.50,” he said.
* Raymond James’ Michael Freeman trimmed his DRI Healthcare Trust (DHT.UN-T) target to $22 from $23 with an “outperform” rating. The average is $19.69.
* CIBC’s Paul Holden raised his target for IA Financial Corp. (IAG-T) to $143 from $133 with an “outperformer” rating. The average is $134.25.
* National Bank’s Don DeMarco raised his target for shares of Lundin Gold Inc. (LUG-T) to $43 from $42, keeping an “outperform” rating. The average is $33.88.
* Mr. Demarco trimmed his Osisko Development Corp. (ODV-T) target to $4.75 from $5.25 with an “outperform” rating after coming off research restriction following the close of its private placement offering. The average is $6.20.
* CIBC’s Cosmos Chiu raised his MAG Silver Corp. (MAG-T) target to $25 from $24 with a “neutral” rating. The average is $25.77.
* TD Cowen’s Brian Morrison cut his Martinrea International Inc. (MRE-T) target to $13 from $18 with a “buy” rating, while Raymond James’ Michael Glen lowered his target to $17.50 from $18 with an “outperform” rating. The average is $16.63.
“We maintain our BUY rating, but acknowledge it is geared toward deep value investors, with upside to the shares likely pushed out relative to our prior outlook. Although midterm upside remains material, in our view, it may fall into the ‘value trap’ categorization near term with a ‘soft’ Q4 outlook, moderating consumer demand and NA inventory in equilibrium, and uncertainty pertaining to tariffs,” said Mr. Morrison.
* Ahead of the Nov. 20 release of its fourth-quarter results, TD Cowen’s Michael Van Aelst raised his Metro Inc. (MRU-T) target to $97 from $92 with a “buy” rating. The average is $88.11.
“Q4 should mark the end of the cost headwinds caused by the transition to larger, automated DCs [distribution centres]. A reduction in duplicate O/H costs & cycling of higher D&A & interest is seen allowing EPS growth to resume by Q1/F25. MRU has performed well year-to-date, so we do not see outsized returns NTM, but its predictability and 11-per-cent expected earnings growth in 2025 make it a solid defensive investment, in our view,” said Mr. Van Aelst.
* RBC”s Jimmy Shan raised his target for Nexus Industrial REIT (NXR.UN-T) to $9 from $8.50 with a “sector perform” rating, while CIBC’s Sumayya Syed moved her target to $9.50 from $9 with an “outperformer” rating. The average is $9.08.
“Nexus Industrial reported FFO/unit (normalized) of $0.188, vs. RBC/Consensus estimates of $0.184/0.183,” said Mr. Shan. “NXR is making steady progress on three key fronts: 1) Payout ratio improved to 101 per cent vs. 108 per cent in Q2; 2) More office assets were sold furthering its pure-play industrial status; and 3) 2025 is a relatively big year for lease renewals at large spreads – we estimate 5.5-per-cent SP NOI [same property net operating income] growth, with growth supplemented by development activity, resulting in 2025E FFO growth of 10 per cent. Valuation looks fair on a relative basis, trading at a tighter discount than LTA vs. industrial peers.”
* Desjardins Securities’ Doug Young moved his Power Corp. of Canada (POW-T) target to $49 from $46 with a “buy” rating. Other changes include: Scotia’s Phil Hardie to $56 from $51 with a “sector outperform” rating, National Bank’s Jaeme Gloyn to $49 from $47 with a “sector perform” rating and CIBC’s Nik Priebe to $51 from $45 with a “neutral” rating. The average is $49.29.
“This is a mixed quarter for POW,” said Mr. Gloyn. “On one hand, earnings missed estimates mainly due to impairments and other non-cash losses. On the other, the sale of Peak and upward revaluation of Wealthsimple more than offset those earnings headwinds to drive NAV accretion. With $600-million in excess cash on closing of Peak, we expect POW to continue to buy back shares at the current discount to NAV of approximately 24 per cent.”
* CIBC’s Dean Wilkinson raised his RioCan REIT (REI.UN-T) target to $22 from $21 with an “outperformer” rating, while Scotia’s Mario Saric bumped his target to $20.75 from $20.25 with a “sector perform” rating. The average is $21.75.
“REI delivered a Q3/24 headline beat on higher interest income and inventory gains as operational metrics were generally in line with expectations. The REIT continues to benefit from strong double-digit new leasing spreads, well exceeding the historical norm, which led to a blended spread of 14 per cent,” said Mr. Wilkinson.
* Mr. Wilkinson also increased his target for Sienna Senior Living Inc. (SIA-T) to $19 from $17 with a “neutral” rating. Other changes include: TD’s Jonathan Kelcher to $20 from $19 with a “buy” rating and Scotia’s Himanshu Gupta to $18 from $17.50 with a “sector outperform” rating. The average is $18.50.
“SIA stock was down 3.3 per cent [Tuesday] (REIT sector down 0.2 per cent) which we thought to be an over-reaction,” said Mr. Gupta. “Two things could explain this: Profit taking as stock has done well year-to-date this is understandable. Secondly, management comment that LTC NOI is likely to be stable in 2025 while most growth will be driven by RH (occupancy growth and NOI upside). As a result, SIA underperformed CSH by 280bp Tuesday.
“Our investment thesis is unchanged: We see NAVPS at $17.25 based on 2025 NOI estimates and growing to $19.50 based on 2026 estimates. We remain bullish on Seniors Housing fundamentals. Valuation is not discounted anymore, but we still have 15-per-cent potential upside based on our 1-yr target price.”
* Stifel’s Ian Gillies increased his Russel Metals Inc. (RUS-T) target to $54.50 from $53 with a “buy” rating, while Raymond James’ Frederic Bastien hiked his target to $56 from $50 with an “outperform” rating. The average is $48.92.
“We reaffirm our constructive stance on Russel Metals after the company agreed to purchase Tampa Bay Steel Corporation for US$78-million,” said Mr. Bastien. “This proposed acquisition—one of RUS’ finest in the US from our perspective—aligns with the firm’s performance-based culture and promises to bolster both its product offering and processing capabilities. Just as importantly, Tampa Bay Steel will extend Russel’s footprint in Florida, positioning it for further growth in this strategically important infrastructure market. Based on this, and the clearly inflationary expectations for steel coming from a second Trump presidency, we are adding RUS to Raymond James’ Analyst Current Favourites list. Our target price moves to $56, for an implied return of 31 per cent from [Tuesday’s] close.”
* National Bank’s Mike Parkin reduced his SSR Mining Inc. (SSRM-T) target to $9 from $10.25 with a “sector perform” rating. The average is $6.10.
“On November 6, SSRM reported its Q3 results posting an Adj. EPS miss vs. NBF and consensus,” said Mr. Parkin. “As expected, management lowered FY24 production guidance at Seabee to account for the temporary suspension of operations (resumed operations October 11th), while production guidance at Puna was increased due to better than expected grades and throughput. At Çöpler, management reiterated the US$250-US$300 million remediation cost at the site, which we continue to be well aligned with after bumping up our near-term estimates to better align with trends. Given the continued progress at Çöpler, we have moved to a DCF valuation (prev. EV/oz) for the asset in our NAV, but continue to model no production/costs in our consolidated estimates given the lack of clarity around restart timing. ... Overall, we see our NAV move 17 per cent higher, largely driven by the change in valuation at Çöpler.”
* CIBC’s Paul Holden raised his Sun Life Financial Inc. (SLF-T) target to $96 from $90 with an “outperformer” rating. The average is $83.67.
* Raymond James’ Steven Li raised his Verticalscope Holdings Inc. (FORA-T) target to $13 from $11.50 with an “outperform” rating. The average is $13.83.
* National Bank’s Adam Shine, currently the lone analyst covering Yellow Pages Ltd. (Y-T), raised his target to $10.50 from $10 with a “sector perform” rating.
“Top-line challenges continue amid secular pressures. The decline in 3Q marked further sequential progress post-3Q23, with this period getting some help, despite higher churn, from a deceleration of the customer count decline rate due to an increase in new customer acquisitions,” said Mr. Shine.