Inside the Market’s roundup of some of today’s key analyst actions
Mackie Research Capital cut its price target on Theratechnologies Inc. (TH-T) after it reported weaker second quarter results.
Analyst Andre Uddin cut his target to $7 from $8.15 but kept his “hold” rating on the stock. The median target is $11.62, according to Zack’s Investment Research.
Mr. Uddin reduced his Trogarzo sales estimate, a medication for HIV patients, for the third time this year.
“Our valuation is based on applying a 12 times EV [enterprise value] /EBITDA [earnings before interest, taxes, depreciation and amortization] to our new 2021 adjusted EBITDA estimate of US$48.2-million discounted by 20 per cent,” he said.
“Total revenues were US$15.6-million – behind our estimate of US$19.4-million and consensus of US$18.2-million largely due to weaker Trogarzo sales. Total revenues were US$9.6-million last year. Net income (loss) was (US$3.2-million) or ($0.04)/share vs. our estimates of US$0.1-million or $0.00/share. Consensus was looking for (US$0.1-million) or ($0.00)/share. TH’s net income was (US$1.9-million) or ($0.03)/share last year. TH reported adj. EBITDA of US$0.5-million – weaker than our estimate of US$2.9-million. As of Q2 end (May), TH had US$43.1-million in cash and US$50-million in debt on its balance sheet. The company is looking to get listed on the Nasdaq going forward – we are increasing our SG&A estimates due to estimated costs associated with the listing,” he said.
“In Q2, Trogarzo generated US$7-million in U.S. sales – softer than our estimate of US$10-million,” he said.
National Bank of Canada cut its rating on Theratechnologies Inc. to “sector perform.”
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Canaccord Genuity increased its price target for Cogeco Communications Inc. (CCA-T) after it posted positive results.
Analyst Aravinda Galappatthige raised the price target to $104 from $97 and kept a “buy” rating on the stock. The median target is $97.
“We regard Q3 results as a net positive despite lighter sub trends in Canada, due to a strong performance from the U.S. cable segment and encouraging preliminary guidance on F2020, which called for 2.5-4.5 per cent EBITDA growth and 5-11 per cent FCF [free cash flow] growth. Even in Canada, despite softer revenue trends, we saw meaningful results from the cost rationalization program, translating to 240bps [basis points] improvement in margins. All in all, Q3 delivered a robust 4.3 per cent EBITDA growth in constant currency terms, which is commendable considering some additional costs in the U.S.,” the analyst said.
“Factoring in the steady results in the U.S. since the substantial MetroCast acquisition, we are getting more comfortable with execution and have thus ticked up our U.S. cable multiple to 8 times from 7 times. This lifts our target from $97 to $104.”
CIBC raised its price target on Cogeco Communications to $103 from $98 and kept its “outperformer” rating on the stock.
Desjardins kept its “hold” rating on the stock but raised its price target to $99 from $96.
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CIBC raised its target and upgraded Alaris Royalty Corp. (AD-T) after the company announced a follow-on investment in Planet Fitness Growth Partners (PFGP), a leading health club franchise network.
Analyst Scott Fromson raised his target to $25 from $22 and boosted his rating on the stock to “outperformer” from “neutral.”
“We see this as positive for the stock, a “redemptive” development following PFGP’s partial redemption last year, and supportive of the viability of Alaris’ business model. One of the big concerns that investors - and we - have had is that good investment partners will redeem their prefs, while lesser companies stay in the portfolio. The PFGP development runs counter to that thesis. We also got a better sense today of how Alaris is structuring investments to better insulate from downside risk on the road to its 80 per cent target payout ratio,” he said.
In other analyst actions:
Parkland Fuel Corp: CIBC raises target price to $49.50 from $48
Superior Plus: RBC cuts to sector perform with a price target of $14.
Cogeco Inc.: CIBC raised its price target to $93.50 from $90.
Barrick Gold: CIBC raised its price target to US$20 from US$16.50.
Newmont Goldcorp: CIBC raised its price target to US$43 from US$40.
Parkland Fuel: CIBC raised its price target to $49.50 from $48.