Inside the Market’s roundup of some of today’s key analyst actions
RBC Dominion Securities analyst Drew McReynolds sees upside in shares of Rogers Communications Inc. (RCI.B-T) as the integration of Shaw Communications takes further shape.
“With an eye on our 2025 estimated NAV [net asset value] of $67 per share as a next phase in the Rogers-Shaw era begins, we believe current share price levels represent an attractive entry point reflecting: (i) the flow-through impact of now full runrate Shaw cost synergies alongside what should be improving cable performance and continued strong wireless outperformance; (ii) a steady de-risking of the stock as the Shaw integration winds down, the competitive landscape post-Rogers-Shaw-Quebecor transactions finds a new equilibrium, leverage declines, and management’s track record of improved execution lengthens; and (iii) option value on non-core and/or non-telecom asset sales/crystallizations,” he said in a research report.
Shares of the Toronto-based telecommunications giant declined 3.3 per cent after it reported total revenue for its first quarter of fiscal 2024 of $4.901-billion, up 27.8 per cent year-over-year and in-line with Mr. McReynolds’s $4.909-billion estimate. Earnings before interest, taxes, depreciation and amortization (EBITDA) of $2.214-billion rose 34.1 per cent and exceeded the analyst’s $2.211-billion projection, while adjusted earnings per share of $1.02 was a drop of 7.3 per cent and 9 cents under his forecast.
Rogers reports lower Q1 profit as it pays down debt from Shaw takeover
Seeing a “a modest recalibration of the cable EBITDA and margin trajectory,” Mr. McReynolds said: “Management reiterated the Q4/24 timeframe for underlying cable revenue growth to turn positive (versus down 3 per cent year-over-year in Q1/24 and H2/23) with a gradual and steady improvement in top-line performance expected through 2024 and 2025. Management indicated that $1-billion in cost synergies related to the Shaw acquisition had been realized exiting Q1/24 (three quarters ahead of management’s previous commentary). With additional post-Q1/24 cost synergies assumed in our 2024 and 2025 cable EBITDA and EBITDA margin forecast, importantly, management indicated that an additional 100–200 basis points of cable EBITDA margin expansion is still expected, driven by the combination of underlying positive cable revenue growth, the realization of further cost efficiencies over time, and the evolving revenue mix. With what appears to be underlying cable EBITDA pressure given the top-line decline as well as likely incremental reinvestments in the business, the path for returning to positive revenue growth alongside further margin expansion is likely to remain in focus. We further trim our 2025 cable EBITDA margin estimate from 58.5 per cent to 57.4 per cent and now assume 58-per-cent cable EBITDA margins through the medium term (previously 59 per cent).”
The analyst thinks “another quarter of wireless outperformance that seems likely to continue.”
“We believe Rogers reported another solid wireless quarter in Q1/24 with industry-leading wireless network revenue and EBITDA growth of 8.7 per cent and 8.9 per cent (including Shaw Mobile), respectively, network EBITDA margins of 64.3 per cent (up 11 basis points year-over-year), and postpaid net additions of 98k with a ‘vast majority’ on the main brand,” he noted. “Management estimates that wireless market expansion was 4.6 per cent in Q1/24 including the initial impact of fewer foreign student entries, and it expects market expansion of 4.0–4.5 per cent for the remainder of 2024 with growth attributable equally to penetration gains and population growth.”
Following a “modest” reduction to his cable EBITDA margin trajectory, offset in part by “slightly” higher wireless estimates, Mr. McReynolds lowered his target for Rogers shares by $1 to $67, keeping an “outperform” recommendation. The average on the Street is $71.03, according to LSEG data.
Elsewhere, other analysts making target changes include:
* Desjardins Securities’ Jerome Dubreuil to $74 from $75 with a “buy” rating.
“We had warned against adding telecom exposure before the quarter, but we believe adding to an RCI position makes sense now that the company has reported its 1Q,” said Mr. Dubreuil. “The quarter was decent despite elevated competitive intensity, and cable margin expectations should be reset. In our view, the company has a relatively long runway of operational improvement from the ongoing Shaw integration, and we therefore believe the current magnitude of the valuation discount vs peers is unwarranted.”
* Canaccord Genuity’s Aravinda Galappatthige to $71 from $71.50 with a “buy” rating.
“Rogers reported a robust Q1/24 result [Wednesday] morning with solid wireless returns and encouraging subscriber adds. Importantly, the company noted that the $1B synergy target had been met one year ahead of schedule. Overall, we characterize the quarter as net positive with particularly strong wireless numbers offsetting soft underlying cable returns and a notably weak Media EBITDA result,” he said.
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National Bank Financial analyst Cameron Doerksen remains “highly positive” on the growth potential for Canadian Pacific Kansas City Ltd. (CP-N, CP-T) following its largely in-line first-quarter financial report.
However, he continues to wait for a better entry point into its shares.
“We believe CPKC deserves a premium multiple given its unique growth opportunities, but with the stock trading at 26.4 times our 2024 EPS forecast (peers at 19.9 times) and 22.0x 2025 EPS (peers at 17.5 times), valuation is already baking in sizable growth,” said Mr. Doerksen. “A labour disruption that could come later in May is also a near-term risk.”
After the bell on Tuesday, CPKC reported quarterly revenue of $3.520-billion, up 2 per cent year-over-year on a pro-forma basis with revenue ton miles rising 1 per cent and yield roughly flat but narrowly below both the analyst’s $3.567-billion projection and the consensus estimate of $3.538-billion. Core adjusted EPS was 93 cents matched Mr. Doerksen’s forecast and fell a penny below the Street’s expectation.
“CPKC maintains its 2024 outlook for double-digit EPS growth, noting that our updated forecast is for 2024 EPS growth of 11.8 per cent with consensus at 13.3 per cent,” he said. “The current consensus for 2025 implies EPS growth of 19 per cent (NBF at 20 per cent) so an acceleration of volume growth driven by merger revenue synergies and an underlying improvement in freight markets is reflected in expectations.”
“So far early in Q2, CPKC’s RTMs are up 8.1 per cent year-over-year with notable strength in intermodal, automotive and potash. Looking ahead, CPKC expects ongoing tailwinds from potash (with easy comps due to an export terminal outage last year), automotive (new Dallas auto compound opening in June), energy chemicals & plastics (synergy wins), and intermodal supported by a solid rebound in container imports into Vancouver and Mexico as well as growth in CPKC’s Mexico-U.S. intermodal train.”
After making “some minor downward adjustments” to his 2024 and 2025 forecasts, Mr. Doerksen trimmed his target for CPKC shares to $119 from $121, reaffirming a “sector perform” recommendation. The average is $124.29.
Elsewhere, other analysts making target changes include:
* Scotia’s Konark Gupta to $124 from $126 with a “sector perform” rating.
“CP shares were under pressure today despite an in-line quarter as the market likely focused on potential short-term risks against a backdrop of lofty valuation, in our view, heading into the earnings,” said Mr. Gupta. “While we are mindful of risks in Q2 and uncertainties in 2H, we are also encouraged by CP’s underlying volume, pricing, and operational trends. In addition, KCS synergies appear to be tracking as per the plan. Thus, we see today’s stock performance as more of a knee-jerk reaction, which could be a buying opportunity for long-term investors as CP continues to offer industry-leading multi-year EPS growth potential, driven by organic levers, KCS synergies and potential buybacks. We have slightly trimmed our annual EPS outlook, which drives our target down to $124 (was $126). Although valuation has slightly improved to 26.1 times/22.0 times on 2024/ 2025, we maintain our Sector Perform rating as we are lacking high visibility on the labour situation and 2H outlook while relative valuation is still a bit concerning vs. U.S. peers at 19.4 times/17.0 times and CNR at 21.0 times/18.8 times.”
* Stifel’s Benjamin Nolan to US$82 from US$83 with a “hold” rating.
“CPKC reported decent results, which were largely as expected, and maintained guidance for EPS growth of 10 per cent this year,” said Mr. Nolan. “However, the growth is driven by anticipated strength in the back half of the year, which the market is struggling to believe, given the dumpster fire in the trucking market at the moment. While much of that growth is predicated on specific projects and initiatives and much of the CP’s business does not directly compete with trucking, in the absence of a healthy rebound in trucking rates, the growth targets might be tough to reach. That said, we still believe CPKC is the best-positioned Class 1 for the next 5-10 years, but we would need to find a better entry point to suggest buying CP shares.”
* Evercore ISI’s Jonathan Chappell to US$89 from US$90 with an “outperform” rating.
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Desjardins Securities analyst Chris Li thinks Metro Inc.’s (MRU-T) “solid execution” continued in its second quarter, seeing its transition to two new automated distribution centres on track as it maintained its full-year guidance.
“We believe MRU is well-positioned for 8–10-per-cent EPS [earnings per share] growth longer-term, supported by efficiency benefits from the automated DCs, structural pharmacy tailwinds and effective merchandising strategies (made even stronger with the expansion of its highly successful proprietary loyalty program to Ontario this year),” he said. “But we see limited upside to valuation (in line with average) given moderating inflation and potential for sector rotation in 2H as interest rates fall.”
Metro’s quarterly profit drops 14.5% as grocer invests in improving supply chain
Shares of the Montreal-based grocer rose a modest 0.5 per cent on Wednesday after it reported adjusted EPS of 91 cents, exceeding both Mr. Li’s 88-cent projection and the consensus forecast of 90 cents. Food same-store sales growth increased by 0.2 per cent, falling from 5.8 per cent a year ago above the 0-per-cent estimate of both the analyst and the Street.
“Outperformance mainly came from lower-than-expected SG&A and strong front-store SSSG,” he said. “SG&A expenses were well-controlled. Ex Terrebonne DC transition costs, the SG&A rate would be stable vs a year ago, implying SG&A dollars increased 2.5 per cent vs 6 per cent in 1Q FY24. Industry trends remain largely unchanged — discount continues to outpace conventional despite high year-ago comps, no notable step-up in competitive intensity, promotional penetration remains elevated (back to pre-pandemic), tradedown in some categories (especially in meat) and private label outgrowing national brands by 2 times.
“The transition to the new automated fresh and frozen DC in Terrebonne is largely complete (dairy remaining). MRU is on track to commence the final phase of its Toronto automated fresh DC this summer, with completion expected in 1Q FY25. MRU is tracking in line with its FY24 EPS guide of flat to down 10 cents (down 2 per cent) as duplicative costs/learning curve inefficiencies and higher depreciation and interest expense from the new DCs weigh on profitability this year. In 1H FY24, EPS decreased by about 1 per cent.”
Mr. Li raised his full-year 2024 EPS projection by 4 cents to $4.28, while his 2025 forecast jumped 9 per cent to $4.70, which implies 10-per-cent growth.
“Higher marketing costs from the new loyalty program launch in Ontario and lingering DC transition costs could create some uncertainty,” he warned.
Maintaining his “hold” recommendation for Metro shares, the analyst raised his target by $1 to $75, which implies a 7-per-cent potential upside. The average is $77.22.
“We believe MRU’s solid and consistent execution make it an appealing long-term investment,” said Mr. Li. “But near-term catalysts are lacking, especially against the backdrop of moderating inflation, earnings pressures from temporary DC duplicative costs and potential for sector rotation in 2H as interest rates decline.”
Others making target adjustments include:
* National Bank’s Vishal Shreedhar to $82 from $80 with a “sector perform” rating.
“We believe that Metro is a solid company which has delivered solid longterm returns; however, these attributes are adequately reflected in valuation,” said Mr. Shreedhar. “We believe that the F2024 earnings slowdown will be temporary (we expect growth to resume in F2025).”
* CIBC’s Mark Petrie to $77 from $76 with a “neutral” rating.
“Metro’s Q2 results were modestly ahead of expectations driven by good cost control, continued execution of the significant supply chain initiatives and improved front-store sales growth at Jean Coutu. Slower food inflation has arrived and is catching substantial interest from investors. While this clearly presents a challenge, we believe Metro (and grocers overall) is well positioned to navigate,” said Mr. Petrie.
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In response to “positive” first-quarter production results from its 44-per-cent-owned Juanicipio mine in Mexico. Canaccord Genuity’ analyst Dalton Baretto upgraded MAG Silver Corp. (MAG-T) to “buy” from “speculative buy” previously.
“On an AgEq basis, production was 7 per cent above our forecast, driven largely by Ag grades that came in well above our estimates,” he said. “The mill appears to be operating well - throughput came in generally in line with our estimate despite a 4-day maintenance shutdown, while recoveries continue to trend upward. Juanicipio’s Q1/24 Ag production represents 31 per cent of the low end of full-year 2024 guidance.”
Ahead of the May 14 release of its full quarterly report, Mr. Baretto maintained a $22 target, exceeding the $19.94 average.
“Our target price is based on 2.0 times NAV, measured as at April 1, 2025. With the mill now operating as designed and Juanicipio generating significant FCF, we are removing the ‘Speculative’ qualifer on our rating and moving MAG to ‘BUY’,” he said.
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While seeing valuations as “attractive,” Raymond James analyst David Quezada says a “shifting” rate backdrop has prompted a “tempered” view of power, energy infrastructure and sustainable energy stocks.
“With steadily moderating expectations with respect to rate cuts over the course of 2024, renewable power names have continued to languish, declining 5–20 per cent year-to-date while bouncing along at the low end of historical valuation ranges,” he said. “While sentiment remains challenging, we are yet to observe a meaningful deterioration in fundamentals with growing development pipelines, a steady flow of RFPs, and an attractive market for acquisition targets—all supporting what we consider to be a solid growth outlook across the renewable IPPs. At the same time, strong corporate demand for renewables globally continues to support rising average PPA prices, which have continued to trend higher in the US while remaining elevated in Europe. Despite these encouraging developments, we must acknowledge the shift in expectations with respect to rate cuts and the potential for a ‘higher for longer’ scenario. Reflecting this, we are moderating target prices across our coverage and generally taking a more judicious view with respect to our generally constructive stance on the space.”
In a report released Thursday, Mr. Quezada downgraded Northland Power Inc. (NPI-T) to “outperform” from “strong buy” previously, citing the macroeconomic conditions and “uncertainty around ongoing management transitions.”
“We affirm our constructive stance on Northland Power as a function of strong potential growth based on execution of the company’s large-scale offshore wind projects,” he said. “We expect investors to remain focused on progress at each project and whether they remain on schedule/budget and see this as a focal point on the 1Q24 earnings call. Notably, a recent article in an offshore wind industry journal would appear to suggest that the Hai Long project is progressing on schedule. Of course, this constructive outlook is clouded by uncertainty with respect to senior management, with the company’s CFO role yet to be filled and CEO Mike Crawley set to depart the company by the end of September, which is consistent with the company’s recently announced management transition. In general, we believe NPI’s bench strength with respect to those directly responsible for key offshore construction projects is strong, and do not see C-suite turnover as creating challenges on this front. However, consistent with our more moderate view of valuation upside in the IPPs, a function of shifting expectations on rate cuts, as well as this lingering uncertainty in management, prompts our move.”
His target for Northland shares slid to $30 from $32. The average on the Street is $29.83.
Mr. Quezada also made these other target adjustments:
- Boralex Inc. (BLX-T, “outperform”) to $38 from $40. Average: $39.
- Brookfield Infrastructure Partners LP (BEP-N/BEP-T, “strong buy”) to US$32 from US$33. Average: US$28.35.
- Capital Power Corp. (CPX-T, “market perform”) to $45 from $46. Average: $43.55.
- Polaris Renewable Energy Inc. (PIF-T, “strong buy”) to $19 from $21.50. Average: $22.83.
“Among the regulated utilities in our coverage, there remains a distinct spread between companies reliant on asset sales to address stretched credit metrics (AQN, EMA) and companies with more breathing room on this front (FTS, H),” said Mr. Quezada. “Among these, we continue to highlight Fortis as a name that continues to trade at the low end of its historical valuation range while offering a highly diversified footprint, defensive attributes, and potentially incremental positive regulatory developments related to the Iowa ROFR issue and regulatory lag docket in Arizona. We also maintain a constructive stance on Altagas and see material upcoming catalysts (sale of the company’s stake in MVP and FID on the REEF LPG export facility), which we expect could prompt further upside, despite recent outperformance. Beyond this, we see each of AQN and EMA as offering a higher-return, higher-risk proposition, but we maintain a positive bias at this juncture given what appears to be increased activity around energy infrastructure M&A. We note each company has indicated news related to asset sales could arrive around mid-2024, and we see this as a key catalyst in each case and potential re-rating vs. peers, assuming valuations received are reasonable. In the case of Emera, we see potential for soft quarterly results given historically mild weather in Florida, however, we would expect news on asset sales could trump the impact of a backward looking weather-driven earnings miss.”
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Stifel analyst Cole Pereira reiterated his bullish view on the Canadian Energy Infrastructure sector, however he warned the recent shift in interest rate expectations has been a drag on valuations heading into earnings season.
In a research report released Thursday, he expressed a preference for companies featuring strong return on invested capital and “solid per-share growth rates that should reinforce long-term dividend growth.”
“Share price performance year-to-date has been mixed for our large and mid-cap coverage names, ranging from GEI up 13 per cent to TRP down 6 per cent vs. the TSX Composite up 4 per cent and the S&P 500 up 6 per cent,” said Mr. Pereira. “On the small-cap side, LCFS is down 7 per cent YTD while TWM is down 29 per cent. In particular, the delay in interest rate cut expectations has been a drag on valuations over the past few weeks, with the market now pricing in only 50 basis points of rate cuts from the Federal Reserve in 2024 vs. 200 bps in January. We would use this recent pullback opportunistically.”
“Our 1Q24 EBITDA estimates are largely in line with the Street, except for TWM, for which we are 15 per cent below. Outside of quarterly financial results, we expect investors to be focused on ENB’s pending gas utility acquisitions, GEI’s STGT re-contracting and CEO search, KEY’s next phase of growth projects, potential FIDs on Cedar and ethane infrastructure and its Alliance/Aux Sable acquisitions for PPL, the SOBO spin-off and further asset sales for TRP, and operational and financial results for TWM/LCFS’s renewable diesel facility. We also expect PPL to increase its dividend by 4 per cent (Street: 2 per cent-3 per cent).”
Noting oil prices have been largely stable in the quarter while natural gas “remains volatile,” Mr. Pereira made minor adjustments to his projections for both quarter and beyond, leading to a series of target price adjustments. They are:
- Enbridge Inc. (ENB-T, “hold”) to $51 from $52. The average on the Street is $53.41.
- Keyera Corp. (KEY-T, “buy”) to $38 from $32. Average: $36.43.
- Tidewater Renewables Ltd. (LCFS-T, “hold”) to $9 from $10. Average: $13.08.
- Tidewater Midstream and Infrastructure Ltd. (TWM-T, “hold”) to 90 cents from $1.25. Average: $1.19.
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Desjardins Securities analyst Kyle Stanley resumed coverage of Flagship Communities REIT’s (MHC.U-T) with a “buy” recommendation following its US$60-million equity offering, which he see adding some “much-needed” trading liquidity and helps fund the largest acquisition in its history.
“Flagship completed its third bought deal equity offering since its IPO, raising US$60-million via the issuance of 3.9 million units priced at US$15.35,” he said. “The offering increased the public float by 19 per cent and diluted the retained interest holders’ ownership interest to 22 per cent (from 26 per cent previously).
“The net proceeds from the offering will partially fund the acquisition of seven MHCs [manufactured housing communities] totalling 1,253 lots for US$93-million (5.6-per-cent going-in cap rate, US$74,000/lot)—the single largest portfolio transaction in the REIT’s history. Two of the communities are located in the Madison and Murfreesboro submarkets of Nashville, while the remaining five communities are in West Virginia (Morgantown, Huntington and Beckley) — both Nashville and West Virginia represent new markets for the REIT. Average portfolio occupancy is 78 pee cent, with 152 rental homes; in our view, this should offer a solid growth runway as the REIT rolls out its value-add program (converting rentals to owner-occupied, implementing submetering, etc). We see 150–250 basis points of near- to medium-term yield upside as the portfolio is stabilized.”
Emphasizing that “solid yield enhancement potential in year two and beyond,” Mr. Stanley trimmed his 2024 and 2025 funds from operations expectations after incorporating the equity offering and portfolio acquisition. That led him to trim his target for Flagship units to US$19.50 from US$21. The average is US$20.
Elsewhere, others resuming coverage include:
* Raymond James’ Brad Sturges with a US$19.25 target, down from US$20.75, with a “strong buy” rating.
“We view Flagship’s MHC acquisitions and equity offering as trading-off some short-term pain for long-term gains. We estimate that Flagship’s pending MHC portfolio acquisitions to be NAV/unit and AFFO/unit dilutive in the initial 1-2 years. However, we believe Flagship’s deal accretion can improve as Flagship executes its value-add strategy to drive medium-term NOI growth. Furthermore, we believe Flagship’s equity offering can improve trading liquidity, while Flagship’s portfolio can benefit from increased operating scale by expanding into new, high-growth markets,” said Mr. Sturges.
* Scotia’s Himanshu Gupta with a US$20, down from US$21.50, with a “sector outperform” rating.
“We think for a small cap entity like Flagship, achieving a certain market cap is crucial to draw incremental investors to the name,” he said. “Acquisition portfolio is right in its wheelhouse, i.e., occupancy ramp-up potential from current 78 per cent to 85 per cent or more in two years, and conversion of rental homes, which together could drive NOI growth 10 per cent-plus annually in the first two years.”
* National Bank’s Matt Kornack with an “outperform” rating and US$19.75 target.
“We were somewhat surprised with the timing of Flagship’s recently completed equity offering although we understand the broader strategic rationale for scaling the vehicle,” said Mr. Kornack. “That said, the transaction maintains leverage albeit with modest dilution to our NAV and FFO/unit in the near term as a function of the issuance price (given a cost of capital gap). We see benefits to scaling the platform and providing incremental trading liquidity. In time synergies and management expertise will somewhat curtail the dilution.”
* Canaccord Genuity’s Mark Rothschild with a US$19 target and “buy” rating.
“There are several notable positive characteristics to the acquisitions, most notably the expansion in the Nashville market, where population growth is driving increased demand for housing, and rent growth. Further, a number of the properties carry substantial vacancy, which should allow for material revenue growth as new residents take occupancy,” he said.
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In other analyst actions:
* TD Cowen’s Aaron MacNeil cut his Ballard Power Systems Inc. (BLDP-Q, BLDP-T) target to US$2.50 from US$3. The average is $4.47.
* Desjardins Securities’ Gary Ho raised his target for Chemtrade Logistics Income Fund (CHE.UN-T) to $12.50 from $12, keeping a “buy” rating, ahead of the May 15 release of its first-quarter results. The average is $12.
“We believe the quarter is on track, with most chemicals performing as expected,” he said. “We increased our EBITDA estimate for 1Q to $98-million (from $96-million) and for 2024 to $410-million vs consensus and the guidance mid-point of $415-million. If its Arizona UPA project pauses longer than expected, tuck-in M&A is a possibility to put capital to work.”
* TD Cowen’s Greg Barnes bumped his First Quantum Minerals Ltd. (FM-T) target to $18 from $17 with a “hold” rating, while Canaccord Genuity’s Dalton Baretto cut his target to $21.50 from $22 with a “buy” rating. The average is $17.26.
“With the balance sheet and liquidity concerns now addressed, FM remains a copper producer of scale, with growth via the Kansanshi S3 project and significant optionality via a potential Cobre Panama restart (in addition to the greenfield pipeline),” said Mr. Baretto. “We believe the sale of a minority stake in the Zambian operations could add value financially, operationally, or politically, while developments in Panama after the May 5 election could be positive (although add significant volatility to the share price).
“From a valuation perspective, we note that FM is trading at 7.9 times 2024 EBITDA and 1.3 times our NAV excluding Cobre Panama; this is essentially in line with the larger copper producers, implying that Cobre Panama is essentially priced out of the stock. Our estimates indicate that at 1.0 times NAV, the current share price is pricing in a 24-per-cent probability of Cobre Panama re-starting by January 1, 2026 (a full 18 months after the new government takes its seat in July of this year). We have modestly reduced our target.”
* TD Cowen’s Graham Ryding raised his targets for IGM Financial Inc. (IGM-T) to $42 from $41 and Sprott Inc. (SII-T) to $58 from $55, while he lowered his Onex Corp. (ONEX-T) target to $112 from $115. The averages are $41.86, $53.50 and $120, respectively.
* TD Cowen’s Michael Tupholme cut his Russel Metals Inc. (RUS-T) target to $45 from $48 with a “hold” rating. The average is $48.81.
* Canaccord Genuity’s Mike Mueller raised his Whitecap Resources Inc. (WCP-T) target to $14.50 from $14 with a “buy” rating, while RBC’s Luke Davis bumped his target to $14 from $13 with an “outperform” rating. The average is $13.23.
“Wednesday after market, WCP reported a healthy beat on Q1/24 results and announced an increase to this year’s production guidance with no change to spending levels,” said Mr. Mueller. “Production last quarter of 169,660 boe/d came in 4 per cent above both our forecast and the Street driven by strong performance in the Montney and Glauconite. WCP also printed CFPS of $0.64, beating both our forecasts and the Street at $0.60. Due to this outperformance, as well as its Musreau battery starting up two weeks ahead of schedule and 10 per cent under budget, WCP is increasing its 2024 guidance by 2.0 mboe/d to 167.0-172.0 mboe/d with no change to spending of $0.9-1.1-billion .... The company is growing its business 5 per cent a year into what we believe will be a more compelling regional pricing environment while having over two decades of inventory to sustain this growth rate. While we don’t foresee crude dropping to a US$50/bbl level this year, the current $0.73/share dividend is sustainable down to these levels. As we’ve highlighted previously, with approximately one-third of its production being under secondary/tertiary recovery, WCP’s maintenance capital is $750-million, driving this dividend sustainability. We reiterate our BUY rating on WCP, which we continue to view as our top oil-weighted name.”