Inside the Market’s roundup of some of today’s key analyst actions
Desjardins Securities analyst Chris Li sees the third-quarter results from Metro Inc. (MRU-T) reflecting “strong execution in a volatile environment” and sees the grocer poised to return to growth in 2025.
“Food SSSG [same-store sales growth] of 2.4 per cent was ahead of our 1.5 per cent and peers despite a tough 9.4-per-cent comp,” he said in a research note. “Growth is likely sustainable, supported by a new loyalty program, automated DC [distribution centre] benefits and lapping discount square footage expansion in Quebec. Its automated DC transition is on track, and we expect EPS growth to revert to the high end of management’s 8–10-per-cent target next year.”
Shares of the Montreal-based company rose 0.9 per cent on Wednesday with the premarket release of its quarterly report, which included adjusted earnings per share of $1.35, matching Mr. Li’s forecast and a penny ahead of the consensus expectation on the Street. Food SSSG of 2.4 per cent topped both the analyst’s 1.5-per-cent project and peer Loblaw Companies Ltd.’s 0.2-per-cent result.
“Supply chain modernization is on track, with the transition to the new automated Terrebonne DC (fresh and frozen) completed and the recent launch of the final phase of the automated fresh DC in Toronto to be completed by September,” said Mr. Li. “By FY25, approximately 60 per cent of MRU’s volume will flow through the four automated DCs for frozen and fresh products, providing it with 15+ years of growth runway. Key benefits include labour savings, improved productivity and efficiency over the longer term as volume grows, less reliance on direct store delivery, and sales uplift from improved on-shelf availability. While it will take time for these benefits to be realized, they are key to sustaining MRU’s long-term 8–10-per-cent EPS target as the grocery landscape continues to evolve.”
The analyst also thinks Metro’s “under-levered” balance sheet and “strong” free cash flow support larger share buybacks moving forward.
“Net debt/ EBITDA is 2.2 times vs MRU’s target of 3.0 times,” he said. “As capex normalizes from $650-million this year to $550-million longer-term and with the completion of supply chain modernization, we believe MRU can buy back more shares.
“Jean Coutu’s strong FCF conversion might not be fully appreciated by the market. When MRU acquired JC in 2018, it had EBITDA of $300-million and capex of only $30–40-million (10:1 ratio) due to its franchise structure (vs 2–3 times for food). JC’s EBITDA has grown nicely when including more than $75-million of cost synergies and organic growth, supported by structural tailwinds from specialty drugs and expanded scope of practice for pharmacist.”
Reiterating his “hold” recommendation for Metro shares, Mr. Li raised his 12-month target to $85 from $80 after raising his revenue expectations through 2025. The average target on the Street is $84, according to LSEG data.
“We believe MRU is well-positioned for 8–10-per-cent longer-term EPS growth. But we see limited upside to valuation (17.8 times NTM [next 12-month] consensus vs its 16.5 times average) given moderating inflation and potential for sector rotation next year,” he said.
Elsewhere, other analysts making changes include:
* National Bank’s Vishal Shreedhar to $88 from $85 with a “sector perform” rating.
“We believe Metro is a solid company which has delivered solid long-term 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 $86 from $77 with a “neutral” rating.
“Metro posted solid Q3 results highlighted by strong Food same-store sales (SSS) growth and impressive cost discipline. Balanced assets across channels remain favourable as discount outperforms full service. We believe this positioning along with an improving outlook are largely reflected in the stock and we would need to gain conviction in even further outsized earnings growth to turn more bullish,” said Mr. Petrie.
* BMO’s Tamy Chen to $85 from $82 with a “market perform” rating.
“Strong food SSS seems to reflect MRU’s longstanding track record for solid merchandising. The DCs’ ramps appear in-line with our expectations. We believe the gradual gains from these DC investments are reflected in our forecasts. The stock currently trades at 11.0 times our revised F2025 EBITDA (historical range 10.0-11.5 times) and 17.5 times our revised F2025 EPS (historical range 16.5-18.0 times),” she said.
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Citi’s Stephen Trent thinks we’ve seen the final guidance reduction from Air Canada (AC-T) for the year, pointing to “2025 tailwinds including easier year-ago comps, lower expected capex and (hopefully) a calmer top-down scenario, with less political noise and a clearer outlook on North American interest rate trends.”
Given that backdrop, the analyst thinks shares of Air Canada, which he continues to rate as a “buy,” look “rather discounted, with even modest improvements in global investor risk appetite potentially supportive of the shares.”
“On the back of its seventh consecutive quarter of positive free cash flow, along with ND/EBITDA of just 1 times putting the carrier ahead of all other Citi-covered network airlines in the Americas, except Copa, Air Canada looks particularly well positioned,” he added. “On a longer-term basis, Citi sees potentially attractive capital allocation opportunities, with management possibly investing in growth and/or returning capital to shareholders.”
Paris Olympics puts dent in Air Canada sales as some travellers avoid France
Mr. Trent did reduce his target to $20 per share from $21. The current average is $22.10.
“Forecast adjustments for Air Canada include the incorporation of (a) lower, passenger yields, (b) modestly higher cost per available seat mile, or CASM, ex-fuel, (c) lower capex, and (d) 2Q’24 results into our model,” he said. “Applying our ̴7 times multiple to reduced 2025E EPS, softens Citi’s target price on the shares of the Canadian carrier from $21 to $20/share.”
“We rate Air Canada Buy, which is based on strong global potential for a continued recovery in international long-haul passenger revenue, and what looks to be a stock price dip. Although the carrier’s margins seem unlikely to catch those of several of its southern peers, this carrier has the most international long-haul exposure among Citi’s Americas Airline coverage.”
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Citing its valuation and relative performance, BMO Nesbitt Burns analyst Ben Pham downgraded Hydro One Ltd. (H-T) to “market perform” from “outperform” previously, despite releasing what he saw as “solid” second-quarter results.
“Q2/24 results highlighted that Ontario-driven T&D growth remains robust for H (10 per cent year-over-year) and downside risk to consensus estimates is contained given virtually all regulated assets, strong balance sheet, visible capex program, and consistent management team,” said Mr. Pham.
“However, the significant share outperformance vs. S&P/TSX Utilities Index (17 per cent, 54 per cent, and 77 per cent over the last 1, 3, and 5 year period), the premium P/E valuation of 21 times (17-21 times historically; utilities peers trade 14-17.5 times), and the relative return to our unchanged $42 target drive our rating.”
His target exceeds the average on the Street of $41.89.
Others making changes include:
* Scotia’s Robert Hope to $45 from $38 with a “sector perform” rating.
“Hydro One reported Q2 results that were generally in line with expectations and our estimates do not materially move,” said Mr. Hope. “The company also reiterated its longer-term 5-7-per-cent EPS CAGR (2022-2027), though we note that tailwinds continue to accumulate for it to beat this range. We continue to see potential upside related to incremental transmission lines and broadband spend (though less than we thought a year ago), as well as local utility M&A.”
* National Bank’s Patrick Kenny to $40 from $39 with a “sector perform” rating.
* CIBC’s Mark Jarvi to $44 from $41 with a “neutral” rating.
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Following weaker-than-anticipated second-quarter financial results, RBC Dominion Securities analyst Paul Treiber lowered his recommendation for Lifespeak Inc. (LSPK-T) to “underperform” from “sector perform” previously.
“We downgrade the shares of LifeSpeak from Sector Perform, Speculative Risk to Underperform, Speculative Risk, given: 1) revenue and ARR growth are not improving at the rate we had expected; 2) lower than expected profitability and FCF restrain financial flexibility; and 3) low investor visibility to the outcome of debt refinancing/renegotiations,” he said.
Before the bell on Wednesday, Lifespeak, a Toronto-based provider of online mental-health content, reported revenue fell 6 per cent year-over-year to $12.4-million, showing little sequential growth and in line with both the estimate of both Mr. Treiber and the Street of $12.4-million. With higher operating expenses, adjused EBITDA came at $2.5-milion, missing the expectation of $2.7-million. An adjusted earnings per share loss of 4 cents matched the analyst’s projection.
“Despite pipeline growth and new contract wins (GreenShield, Stepping Stones Group, LIXIL Americas, Los Almos), LifeSpeak sees 2H/FY24 revenue at levels consistent with Q2, which is below RBC/consensus of an average of $13.1-million/$12.8-million per quarter,” he said. “Q2 ARR was $48.3-million (down 7 per cent year-over-year), below RBC’s estimate of $48.5-million. KPIs (e.g., 75-per-cent logo retention and 84-per-cent NDR) imply continued customer churn, which is a headwind to growth. We reduce our revenue estimates to $50-million FY24 and $53-million FY25, from $51-million and $54-million, respectively.
“Lower than expected profitability and FCF to restrain financial flexibility. LifeSpeak is trying to balance cost reductions with investments (product, go-to-market) required to return to growth. Due to flat revenue and sustained opex, the company sees 2H/FY24 adj. EBITDA similar to Q2 (at $2.5MM), below RBCe/consensus of an average of $2.8-million/$2.9-million per quarter. Our adj. EBITDA estimates decline to $10.3MM FY24 and $13.8-million FY25, from $11.0-million and $14.4-million, respectively. Our FCF forecasts suggest that financial flexibility will remain limited, particularly in light of interest costs and pending mandatory debt repayments.”
Also seeing low investor visibility to the outcome of debt refinancing and renegotiations, Mr. Treiber now has a 25-cent target for Lifespeak shares, down from 35 cents. The average is 51 cents.
Elsewhere, TD Cowen’s David Kwan cut his target to 50 cents from 60 cents with a “hold” rating.
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Following “solid” second-quarter results and an outlook that calls for stronger growth and margins trends in the second half of 2024, ATB Capital Market analyst Chris Murray said he’d remain a buyer of Cargojet Inc. (CJT-T) at its current level.
On Tuesday, the Mississauga-based company reported revenue of $230.8-million, below Mr. Murray’s expectation of $247.3-million. Adjusted EBITDA of $79.1-milion and an adjusted fully diluted earnings per share loss of 5 cents also fell below his projections ($86.6-million and a profit of $1.54, respectively).
However, he emphasized the results were 11.5-per-cent growth across its core air cargo services “with underlying margin trends remaining intact.”
“Revenue sourced from the domestic network/ACMI/Charter of $191.3-million (up 11.5 per cent year-over-year) was in-line with ATB estimate, reflecting normalizing volumes across the domestic network, strong demand for All-In Charter even with the new China scheduled charter business, and steady growth in ACMI, with better cost containment evident,” he added.
“Management was increasingly constructive on its outlook for H2/24, with improving macro conditions supportive of more normal seasonality, which we expect to drive greater operating leverage given steps taken to optimize the fleet and cost structure. CJT announced an 11.25-per-cent increase to its quarterly dividend and maintains the balance sheet capacity to remain active on its buyback in H2/24.”
Mr. Murray pointed to the expectation of “much stronger” growth in the second half of the year, which he noted makes “this the first year in three with a normal ‘peak’ season.”
“Revenue per block hour continued to improve in Q2/24 (up 5.0 per cent year-over-year), which we expect to support margin expansion in H2/24 given normalizing volume trends and better aircraft utilization,” said Mr. Murray.
Also seeing Cargojet “capitalizing” on the need for charter services with “a strong demand environment globally,” he raised his 2025 earnings expectations, leading him to push his target for its shares to $165 from $160 with an “outperform” rating. The average target on the Street is $159.45.
“We expect the Company’s revised fleet strategy to drive stronger asset utilization and higher ROIC (i.e., back to pre-pandemic, mid-teens levels) while positioning the Company to continue to benefit from ecommerce-led demand trends and attractive supply/demand dynamics around international air cargo services,” said Mr. Murray.
Elsewhere, Acumen Capital’s Nick Corcoran raised his target to $178 from $175 with a “buy” rating.
“With signs that the global freight market has hit an inflection point, CJT has shifted into a controlled growth mode,” he said.
“We continue to note that the stock is trading well below its five-year average despite significant growth and diversification over the period.”
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Following Tuesday’s after-market release of the CAE Inc.’s (CAE-T) first-quarter 2025 financial results, RBC Dominion Securities analyst James McGarragle said he continues to “see negative sentiment as reducing downside risk and upside optionality as attractive.”
“FQ1 results were well-received due to indication CAE is starting to turn the corner operationally in Defense, with margins coming in ahead and guidance implying a solid F25 exit rate,” he added. “In Civil, management reduced guidance reflecting (in our view) temporary factors, including OEM delays and pilot hiring pauses; although a solid Civil book-to-bill points to strong underlying demand. Net-net, we came away positive on the quarter and see potential for meaningful operating leverage looking ahead but remain cognizant of execution risk.”
The Montreal-based flight simulator maker reported adjusted earnings per share for the quarter of 21 cents, a penny below Mr. McGarragle’s estimate but penny ahead of the Street’s expectation. Adjusted operating income of $134-million fell below projections ($143-million and $135-million, respectively).
“Defense margins came in better than expected in the quarter on the back of some early progress under the leadership of CAE’s new COO Nick Leontidis,” the analyst said. “Key in our view is that guidance for margin of 6-7 per cent exiting the year points to a margin exit rate into F26 ahead of our expectations; and given revenue guidance for growth of low-to-mid single-digit and strong backlog growth in the quarter points to some meaningful (potential) operating leverage looking ahead. While we are cognizant of recent execution issues in Defense, we nevertheless see upside optionality as significant and view progress this quarter as a positive step forward.
“Management [Tuesday] night lowered their Civil adj. operating income growth guidance to “approximately +10%” (from low double-digit) and brought down margin expectations to 22 per cent to 23 per cent (from 23 per cent). We note that the guide implies a significant uptick in growth in H2 and we therefore flag risk to the guide and brought lower our Civil operating income growth estimate to 6 per cent (from up 9 per cent). Nevertheless, the book-to-bill came in at 1.3 times, which we see as a driver of growth looking ahead. Moreover, we see margin headwinds as temporary as we expect OEM delays and pilot hiring pauses to alleviate into the end of the year. These factors set the stage in our view for solid operating income growth into next year.”
Maintaining an “outperform” rating, Mr. McGarragle trimmed his target to $27 from $30 on lower expectations for its Civil business, citing near-term headwinds related to pilot hiring and OEM delays. The average is currently $29.29.
Elsewhere, Scotia’s Konark Gupta lowered his target to $29 from $30 with a “sector perform” rating.
“FQ1 operating results missed expectations as Civil faced headwinds that were previously highlighted by CAE along with some transient challenges, while Defense margin continued to rebound,” said Mr. Gupta.” As a result, the company slightly trimmed Civil guidance but maintained Defense and EPS forecasts (FQ1 tax rate tracked below guidance). On the brighter side, Civil order activity remained strong while overall backlog increased significantly due to a recently announced 25-year long defence contract. Management noted on the call that while Civil is facing some short-term headwinds, it remains confident about long-term prospects and has taken cost initiatives to partially mitigate. Defense remains on track for a normalized 10-per-cent margin but exact timing remains unknown. With a slight reduction in our estimates, led by Civil, we are trimming our target ... We maintain our SP rating until we gain more confidence in the underlying segment drivers. Valuation remains attractive, as long as our long-term estimates don’t have material downside risk.”
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In other analyst actions:
* CIBC’s Robert Catellier lowered Superior Plus Corp. (SPB-T) to “neutral” from “outperformer” and cut his target to $10 from $14. Elsewhere, other changes include: RBC’s Nelson Ng to $11 from $13 with an “outperform” rating, ATB Capital Markets’ Nate Heywood to $12 from $13 with an “outperform” rating and National Bank’s Patrick Kenny to $9 from $10 with a “sector perform” rating. The average target on the Street is $10.59.
“Q2 results show increasing regional price competition for Certarus, which could be a long-term issue as the company adjusts its pricing strategies to retain market share,” said Mr. Catellier. “We downgrade the company to a Neutral rating from Outperformer and decrease our EV/EBITDA-based price target to $10 from $14, based on a lower multiple of 7.5 times 2025 estimated EBITDA compared to 8.5 times previously.”
* BMO’s Raj Ray initiated coverage of Montage Gold Corp. (MAU-X) with an “outperform” recommendation and $2.50 target. The average is $2.59.
“Montage is advancing the pre-construction stage Koné gold project in Côte d’Ivoire,” he said. “The attractiveness of the project is the large scale, potential for additional higher-grade resources, simple flowsheet design with relatively low processing costs and access to key infrastructure.
“The Koné project has also been significantly de-risked with mining permits in place. Backed by a strong team with significant experience in West Africa, Montage offers a scarce high-quality investment opportunity amongst gold development-stage peers.”
* CIBC’s Kevin Chiang reduced his target for Airboss of America Corp. (BOS-T) to $4 from $5.75 with an “underperformer” rating. The average is $5.81.
“BOS’s Q2 results reflected a challenging macro backdrop, though we also see some green shoots that should set the foundation for improved growth looking past 2024. That said, until we see a more sustained recovery in BOS’s results, we remain cautious on the name,” said Mr. Chiang.
* Stifel’s Ian Gillies increased his target for Algoma Steel Group Inc. (ASTL-T) to $19 from $16 with a “buy” rating, while BMO’s Katja Jancic raised her target to $15 from $13 with an “outperform” rating. The average is $17.67.
“Challenging market conditions for HRC and plate continue to pressure Algoma’s near-term financial performance,” he said. “However, we continue to believe that the focus on the stock is its EAF transformation which will allow the company to increase its production and improve its margin profile, leading to a significantly improved FCF profile (2026E FCF yield: 19.3 per cent). Our medium-term view remains unchanged as we believe the company’s FCF generation ability will be significantly improved and can be used towards share buybacks to improve shareholder returns. This is augmented by the potential for M&A as the project nears completion.”
* Canaccord Genuity’s Mike Mueller increased his Birchcliff Energy Ltd. (BIR-T) target to $6.50 from $6 with a “hold” rating. The average is $6.67.
* RBC’s Nelson Ng raised his Boralex Inc. (BLX-T) target to $38 from $26 with a “sector perform” rating. Other changes include: BMO’s Ben Pham to $39 from $37 with an “outperform” rating and Raymond James’ David Quezada to $41 from $38 with an “outperform” rating. The average is $41.20.
“Boralex is positioned well to grow and advance its development pipeline in the near term with recent bids submitted in the U.K. and New York. In addition, the benefit from the Canadian Investment Tax Credit or ITC (was not included in some project base case economics) should minimize project equity needs and significantly improve returns. We raise our price target by $2 to $38 to reflect some ITC upside that we expect the company to realize over the next several years,” said Mr. Ng.
* CIBC’s Kevin Chiang cut his Chorus Aviation Inc. (CHR-T) target to $3.25 from $3.50 with an “outperformer” rating, while National Bank’s Cameron Doerksen moved his target to $3.85 from $3.65 with an “outperform” rating. The average is $3.34.
“We maintain our Outperform rating on Chorus Aviation shares following Q2 results,” said Mr. Doerksen. “Recall that in late July, Chorus Aviation announced the sale of its Regional Aircraft Leasing segment to HPS Partners for a total value of $1.9 billion including $825 million in net cash that will be deployed to pay down essentially all of Chorus’s corporate debt and outstanding preferred shares. We reviewed the transaction and our updated investment thesis in a report published two weeks ago. We view the sale of the RAL segment positively as the transaction will simplify the business and positions Chorus to refocus its growth on the remaining businesses either organically or through M&A while supporting additional shareholder returns. We estimate Chorus can generate over $100 million in free cash flow in 2025, which would represent a 20-per-cent-plus FCF yield based on the current share price.”
* TD Cowen’s Sam Damiani raised his Dream Unlimited Corp. (DRM-T) target to $33 from $30 with a “buy” rating. The average is $36.50.
* National Bank’s Mohamed Sidibé trimmed his Lithium Americas (Argentina) Corp. (LAAC-N, LAAC-T) target to US$4.75 from US$6 with a “sector perform” rating. Other changes include: BMO’s Joel Jackson to US$3 from US$4.50 with a “market perform” rating, Stifel’s Cole McGill to US$10 from US$12 with a “buy” rating and Scotia’s Ben Isaacson to US$4.25 from US$8 with a “sector perform” rating. The average is US$6.02.
“We reiterate our BUY rating on LAAC shares, and continue to think it represents one of the better counter cyclical long-term value stories for investors seeking low-cost lithium exposure with experienced management, alongside an entrepreneurial partner paired with the right asset. LAAC continues to execute on avenues within its control, namely i) achieving 70-per-cent nameplate capacity at Cauchari in just 14 months, which is less than a third of comparable assets, and ii) near-term balance sheet relief for asset level debt. We remain constructive on the name, but note current lithium pricing, paired with an iterative ramp process to achieve both volume + value elevate balance sheet prudence, a main investor focus.,” said Mr. McGill.
* RBC’s Jimmy Shan cut his target for Minto Apartment REIT (MI.UN-T) to $21.50 from $22 with an “outperform” rating. Other changes include: Raymond James’ Brad Sturges to $19.75 from $20.25 with an “outperform” rating, Desjardins Securities’ Kyle Stanley to $21 from $21.50 with a “buy” rating and TD Cowen’s Jonathan Kelcher to $22 from $21 with a “buy” rating. The average is $20.02.
“MI reported better-than-expected 2Q24 operating results,” said Mr. Stanley. “Competitive pressures in Toronto persisted in 2Q; with elevated condo deliveries scheduled in the coming quarters, we expect that to keep a lid on occupancy gains and AMR [average monthly rent] growth in the market. Revisions to our earnings outlook were not material — notwithstanding the nearly three-cent FFOPU [funds from operations per unit] beat in 2Q, our moderated SP NOI growth outlook served as an offset.”
* CIBC’s Dean Wilkinson trimmed his Northwest Healthcare Properties REIT (NWH.UN-T) target to $5.50 from $5.75, keeping a “neutral” recommendation. The average is $5.71.
“NWH reported a slight Q2/24 miss, falling two cents short of consensus. SP-NOI grew 4 per cent driven by inflation adjusted rent, ‘rentalised capital’ spend and improved recoveries. The REIT continues to make significant headway in its non-core asset disposition program; announcing the conclusion of its strategic review and the long-awaited sale of the U.K. portfolio,” he said.
* Raymond James’ Stephen Boland hiked his Street-high Pollard Banknote Ltd. (PBL-T) target to $44 from $40.50 with an “outperform” rating. The average is $34.75.
“Pollard Banknote (PBL-TSX) reported their 2Q24 results on August 13. PBL reported revenue of $137.8 million vs RJL at $134.4 million. Adjusted EBITDA was $32.3 million vs and RJL $26.0 million,” he said. “The gross margin materially improved, which came as a surprise. Management’s outlook is more positive. Instant ticket volumes are expected to rise for the next two quarters. With the majority of contracts repriced, the margin should reflect this going forward. The outlook for the other segments — iLottery, eGaming and Charitable Gaming — remains positive. Acquisitions continue to be evaluated, with a small deal announced recently. The stock has suffered since the announcement that their JV partner has won the Michigan iLottery contract on its own, beginning in 2026. We would remind investors that not every contract contains the same requirements (having technology in place in the U.S.) and that most iLottery contracts are long-tailed. Some extend beyond 2030. This was a positive quarter, which was eagerly anticipated. We maintain our Outperform rating.”
* Desjardins Securities’ Gary Ho raise his TerraVest Industries Inc. (TVK-T) target to $100 from $95 with a “buy” rating, while National Bank’s Zachart Evershed increased his target to $104 from $89 with an “outperform” rating. The average is $101.67.
“TVK reported solid 3Q results which were well ahead of our estimates and consensus, driven by outperformance from Services, Compressed Gas and HVAC/Containment, offset by softer Processing Equipment results,” he said. “TVK’s Cowansville facility expansion is on track (timing and budget), and we expect it to begin contributing in FY25. We anticipate continuing M&A activity, with a forecast of $175-million in combined transactions over FY25/26.”
* Desjardins Securities’ John Sclodnick bumped his Wesdome Gold Mines Ltd. (WDO-T) target to $14 from $13.50 with a “hold” rating, while BMO’s Andrew Mikitchook hiked his target to $18 from $14 with an “outperform” rating. The average is $14.85.
“[Wednesday] evening, WDO reported 2Q24 financial results after previously reporting operating results and sales,” he said. “[Wednesday’]s results were positive, with an adjusted EPS and cost beat driven by a strong performance at Kiena, where costs were down more than 60 per cent quarter-over-quarter. We did not make significant estimate changes and continue to model annual production around the mid-point of guidance and AISC slightly above. We expect the shares to outperform [Thursday] on the strong financial results.”
* RBC’s Chris Dendrinos reduced his target for Westport Fuel Systems Inc. (WPRT-Q, WPRT-T) to US$8 from US$9, below the US$12.07 average, with a “sector perform” rating.
“2Q24 results came in better than expected, demonstrating continued progress with cost reduction efforts, operational efficiencies, and steps toward profitability,” he said. “WPRT was impacted by a key customer’s destocking efforts which resulted in lower sales volumes in the quarter, but we expect this to normalize in 2H24. We remain optimistic in mgmt’s efforts to right-size the business for the current environment, continued execution with Euro 6 and 7 customers, and in progress with the launch of the Volvo JV. PT to $8 on revised rating methodology following JV start.”
* TD Cowen’s Derick Ma cut his Wheaton Precious Metals Corp. (WPM-N, WPM-T) target to US$70 from US$71 with a “buy” rating. The average is US$66.66.