Inside the Market’s roundup of some of today’s key analyst actions
RBC Dominion Securities analyst Walter Spracklin thinks Canadian National Railway Co.’s (CNR-T) operations have “rebounded nicely” following the late August labour disruption and its valuation is now “inexpensive relative to history, the peer group, and versus CP.”
“Moreover, we still believe CN has an attractive growth outlook, despite near-term weakness in the industrial economy, which when combined with improved network fluidity, sets the stage for significant operating leverage in our view,” he added. “Key is that with expectations having reset so low following CN’s recent guidance cut, we do not believe this opportunity is reflected in the shares at current levels.”
That led Mr. Spracklin to raise his rating for CN shares to “outperform” from “sector perform” on Thursday.
“Our prior thesis on CN was based on full valuation and several one-off items that we saw as negatively impacting sentiment,” he explained. “However, with these one-off items now in the past and indication CN’s network is running fluidly, in addition to a solid growth outlook (despite near-term headwinds that prompted the recent guidance cut), we now believe EPS growth is set to outperform and that this is not reflected in the company’s discounted valuation.”
David Berman: Buy the dip and ride the rails: The case for Canadian National Railway
The analyst said car velocity now trending higher versus July “when management issued a “starting with a 5″ back half operating ratio guide.
“While we expect Q3 to be negatively affected by a weak volume backdrop and some one-off operating challenges, recent performance metrics point to a meaningful improvement in O/R in Q4, which we believe sets the stage for EPS outperformance in 2025,” he said.
“Sentiment has turned negative and valuation is discounted. CN’s valuation relative to the group has come off recent highs with the shares now trading at a 1-per-cent discount to the peer group (from a more than 10-pr-cent premium in April 2023) reflecting several one-off items this year that impacted margins and a weaker than expected industrial backdrop that caused the company to back off its 3-year guidance last month. In addition, CN is close to the most inexpensive it has been vs. CP in the company’s history as well as inexpensive vs. its own history.”
Believing investor expectations “have been reset,” Mr. Spracklin increased his target for CN shares to $179 from $169. The average target is $175.07, according to LSEG data.
“With expectations now muted, we see an attractive entry point in CN shares at current levels. We believe improving car velocity sets the stage for solid Q4 results, which we expect to act as a near-term catalyst. Into next year, despite near-term industrial headwinds, we believe CN still has an attractive growth pipeline and we do not believe this is reflected in forward expectations.”
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Equity analysts at National Bank Financial believe the expectations for the declining interest rates support a bullish outlook for precious metals, leading the firm to reaffirm its “constructive” stance on the sector.
“With real rates declining throughout the year, continued heightened geopolitical risk and central banks remaining net purchasers of gold, we have seen gold/silver prices respond positively, up 26 per cent and 28 per cent year-to-date, respectively, and we remain bullish on the precious metals outlook going into year-end on the same basis,” they said.
In a research report released Thursday, the group updated their estimates based on metals prices and foreign exchange rates to “reflect the current price environment.” They also raised their short-term and long-term price assumptions, including their gold assumptions for 2024 (to US$2,409 per ounce from US$2,280) as well as the long term (to US$2,200 from US$1,700).
“We have modified our calculation methodology for the LT gold price to factor in cost inflation in the mining industry out to our LT forecast year, by inflating the LTM [last 12-month] production-weighted average fully baked All-In Sustaining Cost (AISC) of the Top 10 global gold producers and adding 15 per cent to this future AISC projection to determine where gold needs to be to see investment in the sector,” they explained. Our analysis results in a new LT gold price of US$2,200/oz (prev. US$1,700/oz), while we have increased our LT silver price to US$27.00/oz (prev. US$21.00/oz) to keep our gold/silver ratio unchanged at 81 timed, in line with long-term averages. Our LT prices now begin in 2030 (prev. 2029). We also apply 3 per cent per annum of inflation to our medium-term cost forecasts (2025-2030) for opex and capex which is aligned with the average inflation the sector has realized over the past decade.”
Ahead of quarterly earnings season, the analysts also emphasized a number of companies in their coverage universe “successfully completed growth projects earlier this year and are focused on ramping up to commercial production during 2H24.”
“We would also note that several companies are guiding to a back-half weighted production year (especially Q4), which we expect to drive strong FCF growth quarter-over-quarter and also thanks to the gold price continuing to set new all-time highs,” they said.
With their adjustments, the analysts made five rating changes to stocks in their coverage universe.
These four companies received upgrades:
* Calibre Mining Corp. (CXB-T) to “outperform” from “sector perform” with a $4 target, up $2.85 and above the $3.17 average.
Analyst Don DeMarco: “We are upgrading to Outperform (was Sector Perform) after revising our gold price deck with a materially higher long-term gold price ... in a catch-up to the constructive precious metals’ environment. This adjustment lends favourably to our Valentine project NAV estimate (58 per cent of our NAV) given production of 195k oz/year over an extended 12-year mine life (FS 2022).
“Our upgrade also considers that Valentine mine development is in the homestretch, first pour approaching iNQ2/25 and de-risking advanced, with capex normalized, a site visit showing well and led by a strong management team with a track record of success. We highlight visibility for a valuation re-rate to reflect increased production in Tier 1 jurisdiction.
* Iamgold Corp. (IMG-T) to “outperform” from “sector perform” with a $11 target, up from $8.50 and above the $8.24 average.
Analyst Mike Parkin: “We are upgrading IAMGOLD to Outperform (prev. Sector Perform) on the back of our metal price update and the incremental de-risking of the Côté mine in northern Ontario. We believe that a large portion of the ramp-up challenges at Côté are now likely in the rearview mirror after the company completed a planned multi-day shutdown in September to address the long-term availability of the plant, while it expects to complete a second major shutdown in October which is aimed at addressing the bulk of what was not addressed in the September shutdown. Given the two major shutdowns, we believe Côté is now in a good position to ramp up to nameplate capacity in the coming months. Q3 for Côté could prove to be mixed, but we expect to get more colour on this from the site tour next week (Oct 16th), however, we anticipate management will be able to communicate a stronger operational outlook going forward for the new mine, which we expect will be the main focus of the market.”
* Torex Gold Resources Inc. (TXG-T) to “outperform” from “sector perform” with a $37.75 target, up from $31.25 and above the $32.90 average.
Mr. DeMarco: “We are upgrading to Outperform (was Sector Perform) after revising our gold price deck with a materially higher long-term gold price ... in a catch-up to the constructive precious metals’ environment. This adjustment lends favourably to our Morelos Complex NAV estimate and long-lived production outlook for more than 450k oz/year through 2030, potentially longer on Reserve conversion.
“Our upgrade also considers the quality of TXG’s assets, including de-risked production and FCF outlook with the EPO PFS; sizable endowment of 5.5 mln oz Reserves and 10 mln oz total Resources and high ROI brownfield opportunities on exploration success from a prospective land package.”
* Wheaton Precious Metals Corp. (WPM-T) to “outperform” from “sector perform” with a $105 target, up from $90 and above the $96.21 average.
Analyst Shane Nagle: “We have incorporated revised commodity price assumptions as part of our Precious Metals Price Update piece. Higher long-term precious metal prices has led to an improved valuation for WPM relative to peers. We also highlight that shifts in the recent market environment continue to make accretive acquisitions more challenging, providing an advantage to WPM’s portfolio with US$1.75-billlion of capital commitments in place driving 6-per-cent top-line growth over the next three years on deals secured over the past few years.”
Conversely, Mr. DeMarco downgraded i-80 Gold Corp. (IAU-T) to “sector perform” from “outperform” with a $2.25 target, down from $3.50 and below the $3.48 average.
“We are downgrading to Sector Perform (was Outperform) following a period of share price outperformance (last one month up 11.3 per cent vs. S&P TSX Gold Index up 3.5 per cent), and as we normalize our expectations for asset development in light of the company balance sheet and existing obligations, which offsets our favourable view of new leadership and the company’s quality assets in a Tier 1 jurisdiction,” he said.
“We recently expressed our encouragement for the appointment of Richard Young as CEO and Director, who brings strong experience in Nevada including operational positions with Barrick Gold (TSX: ABX) at its Goldstrike Mine, founder and CEO of Teranga Gold Corp transforming the company from a single-asset producer into a mid-tier gold producer ultimately acquired by Endeavour Mining (TSX: EDV) in 2021 for $2.5-billion, and more recently, President and CEO of Argonaut Gold which was sold to Alamos Gold Inc. in July 2024.”
After adjustments to target prices for stocks, the analysts also named their “top picks” across the sector:
Seniors
- Kinross Gold Corp. (K-T) with an “outperform” rating and $19 target, up from $17. The average is $15.60.
Intermediates/Juniors
- Aya Gold & Silver Inc. (AYA-T) with an “outperform” rating and $24 target, up from $21.75. Average: $21.25.
- Calibre Mining Corp. (CXB-T) with an “outperform” rating and $4 target, up from $2.85. Average: $3.17.
- G Mining Ventures Corp. (GMIN-T) with an “outperform” rating and $15.75 target, up from $14. Average: $15.53.
- OceanaGold Corp. (OGC-T) with an “outperform” rating and $6 target, up from $5. Average: $5.08.
Royalty Companies
- Osisko Gold Royalties Ltd. (OR-T) with an “outperform” rating an $33.50 target, up from $28. Average: $28.79.
Developers
- Artemis Gold Inc. (ARTG-X) with an “outperform” rating an $20 target, up from $16. Average: $16.67.
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In a research report released Thursday titled Muddling Through with 2025 Now in Focus, RBC Dominion Securities analyst Drew McReynolds said he’s heading into third-quarter earnings season for Canadian telecommunications companies “awaiting more evidence of a trough.”
“Last quarter heading into Q2/24 results, we believed the sector was poised for a bounce given the notable year-to-date underperformance,” he said. “The sector did indeed bounce in Q3/24 (albeit modestly) driven by what we believe were a further easing of interest rate expectations and initial signs of a stabilization in wireless pricing. With a focus on evidence that overall industry revenue growth is at, or is close to, a year-over-year trough, unfortunately we are unconvinced such evidence will emerge with Q3/24 results generally showing further sequential deterioration in wireless ARPU [average revenue per user] and network revenue growth for the Big 3 and with what is likely to be a challenge for management teams in calling a trough ahead of the promotionally intense Black Friday/Cyber Monday and holiday periods in Q4/24.
“Company-wise for Q3/24, we expect: (i) Cogeco’s Canadian Broadband to lead on core telecom revenue growth at 2.2 per cent year-over-year followed by TELUS at up 0.5 per cent, Rogers at 0.1 per cent, BCE at down 0.6 per cent and Quebecor at down 0.8 per cent; (ii) Rogers to again lead on wireless net additions (+182k) and wireless network revenue growth (2.4 per cent); (iii) sequential deterioration of up to down 100 basis points on year-over-year wireless ARPU growth for each of the Big 3; and (iv) BCE and TELUS to maintain Internet loading leadership but with some further sequential cableco improvement.”
Mr. McReynolds predicts downward revisions to 2024 revenue guidance are “likely” with his projections for the Big 3 already below the respective guidance ranges.
“While we believed heading into Q2/24 results downward revisions to 2024 revenue guidance were possible, downward revisions with Q3/24 results now look likely to us in the absence of more notable pricing discipline, macro improvement and/or higher wireless equipment revenue in Q4/24 (TELUS acknowledged with Q2/24 results that service revenue and adjusted EBITDA growth was tracking to the lower-end of the guidance ranges),” he said. “Although our 2024 adjusted EBITDA forecasts for the Big 3 are slightly below the respective guidance ranges, we believe the ongoing realization of cost-efficiencies from all operators and what could be a stabilization in revenue growth in Q4/24 may still provide paths to meeting the low-end of adjusted EBITDA guidance.”
For investors, he thinks additional upside in the sector requires “more evidence that overall industry revenue growth is at, or is close to, a year-over-year trough along with better visibility on what a revenue recovery for the industry could look like in 2025.”
“Year-to-date, the S&P/TSX Telecom Index has generated a total return of negative 5 per cent compared to [a gain of] 18 per cent for the S&P/TSX Composite Index,” he said. “Under our base case assumptions for competition, growth, regulation, and capital returns we continue to expect competitive intensity to stabilize, the final TPIA framework and specifically final access rates to be balanced enough, more moderate industry revenue growth but with growth remaining positive, and dividends to be sustained. We continue to believe the key fundamental catalyst for the sector given current valuations will be visibility on the ability for the Canadian telecom industry to deliver 3-per-cent revenue growth, which in our view, will require sustained pricing discipline and an overall stabilization in telecom pricing, moderating but still decent market expansion, and a small but growing bucket of new revenue streams. Against this more subdued fundamental backdrop and with the group trading at an average FTM [forward 12-month] EV/EBITDA of 6.9 times (versus a recent historical range of 6.7-8.5 times), we characterize current valuations as reasonable - neither cheap nor expensive - provided an economic hard landing and/or another leg-up in bond yields is avoided.”
Following revisions to his forecasts, Mr. McReynolds made a trio of target price adjustments:
- BCE Inc. (BCE-T, “sector perform”) to $52 from $53. The average on the Street is $49.83.
- Cogeco Communications Inc. (CCA-T, “sector perform”) to $79 from $76. Average: $71.65.
- Quebecor Inc. (QBR.B-T, “sector perform”) to $38 from $36. Average: $38.25.
He maintained his targets for Rogers Communications Inc. (RCI.B-T, “outperform) of $66 and Telus Corp. (T-T, “outperform”) of $25. The averages are $68.04 and $24.46, respectively.
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Scotia Capital analyst Maher Yaghi emphasized financial pressure “persists” for telecommunications companies heading into earnings season.
“Industry financial results will likely show poor earnings growth due to continued pricing pressure, however some companies will fare better than others depending on their cost-cutting efforts,” he said. “We expect Rogers and TELUS to likely show the best telecom EBITDA growth, followed by Cogeco, Bell and Quebecor. Quebecor could positively surprise on wireless loading but our earnings estimates are below consensus. Industry wireless pre/post split likely tilted much more toward prepaid pushing ARPU levels down with them. Our new industry ARPU estimates reflect, as we’ve discussed last week, a longer period to a return to positive growth, having pushed out the recovery by 6 months until late 2025. We continue to believe that asset disposition (towers as example) remain a potential opportunity that the industry should pursue to improve the decline in ROIC of the past few years.”
Based on its recent share price performance, Mr. Yaghi downgraded Quebecor Inc. (QBR.B-T) to “sector perform” from “sector outperform” with a $38 target (unchanged), which is 25 cents under the consensus on the Street.
“We believe QBR could surprise positively on wireless loading in Q3; however, financial pressure from not raising plan pricing on the cable side coupled with lower wireless ARPU and continued price competition from BCE is likely going to lead to weak year-over-year,” he said. “EBITDA performance. In recent quarters, the company has been able to load between 20 per cent and 30 per cent of net new wireless adds; we don’t think this quarter will be any different. While we continue to expect QBR to maintain a strong trend in wireless customer loading, the company needs to find a way to improve financial performance both in wireless and cable. The stock has significantly outperformed peers year-to-date and valuations are now in fair value range hence our call today to lower the rating down to sector perform. We remain positive about the long term prospects for QBR, however valuations do not offer the same upside potential as it did since our upgrade in January. We could review our rating if valuations become more attractive.”
The analyst also made these target changes:
* BCE Inc. (BCE-T, “sector perform”) to $50.50 from $53. The average on the Street is $49.83.
Analyst: “Q3 results at BCE will likely continue to show weak topline growth and without a significant decline in the cost structure yet, EBITDA growth should be minimal and highly driven by growth of the media business/M&A and not the more important telecom business. Pricing pressures both in wireless and wireline remain significant, and we anticipate sequential degradation in wireless ARPU and lower performance on loading vs prior quarters. While we are within company guidance on EBITDA and FCF, we are lower on revenues and continue to forecast no dividend growth in 2025 ... The stock’s multiple has declined, and the dividend yield looks attractive; however, we await the CRTC’s decision on FTTH rates coming out later this year before reviewing our rating as this decision could have a significant impact on the long-term prospects of the wireline assets.”
* Rogers Communications Inc. (RCI.B-T, “sector outperform”) to $71.50 from $72. Average: $68.04.
Analyst: “We expect Rogers to continue to show strong momentum in EBITDA, supported by topline growth in wireless combined with cost improvements. As for other wireless incumbents, the split of prepaid vs post paid loading likely veered more towards prepaid in Q3, but we expect costs to have also been lowered enough to lead to improved y/y margins. Similarly, in cable we expect margins to be close to or at a record for the company. From a stock perspective, we continue to view valuations as attractive. The key to unlocking this upside, in our view, is deleveraging of the balance sheet as leverage remains the number one issue investors continue to cite as a reason not to invest in the stock.”
Mr. Yaghi kept targets of $73 for Cogeco Communications Inc. (CCA-T, “sector perform”) and $24 for Telus Corp. (T-T, “sector perform”). The averages are $71.68 and $24.46, respectively.
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Desjardins Securities analyst Doug Young expects Canadian insurance companies to see a 6-per-cent year-over-year increase in core earnings per share for the third quarter with several sector-wide catalysts on the horizon.
“There are several themes we’ll be watching for with 3Q24 results,” he said in a research note. “First, core EPS should benefit from higher average equity markets, a depreciating Canadian dollar and share buybacks on a year-over-year basis. Second, reported EPS will likely be below core EPS for the group due to several factors, including commercial real estate (CRE) returns falling short of expectations. Third, on a company basis, the main focus will be on (1) the actuarial review impact for SLF, MFC and GWO; (2) US group results for SLF; (3) Asia trends for MFC and SLF; (4) US extended vehicle warranty trends for IAG; and (5) Empower for GWO.”
“We expect MFC’s and SLF’s Asia businesses to show improvements in sales and earnings,” he said. “The wealth businesses should benefit from higher equity markets and lower interest rates. The US dollar, British pound and euro appreciated vs the Canadian dollar on an average basis, which should benefit results (the US dollar is relevant for all lifecos, while the British pound and euro are relevant for GWO). The yen depreciated vs the Canadian dollar (relevant for MFC).”
Increasing his target prices for the four stocks in his coverage universe, the analyst emphasized several earnings growth drivers over the next 2–3 years, pointing to “(1) Higher equity markets should benefit core earnings; (2) SLF—growth in the U.S. group (in 2025), Asia and SLC Management, in addition to stock buybacks and capital deployment; (3) MFC—a turnaround in Asia and buybacks; (4) IAG—a non-recurrence of various items that had a negative impact in 2023 (higher mortality, corporate expenses, higher-than-normal strain in group insurance and yield curve inversion), potential turnaround in U.S. auto sales/U.S. extended vehicle warranty business, organic growth, digital initiatives, buybacks and leveraging distribution domestically; and (5) GWO—Empower.”
Maintaining his “pecking order” of companies, his targets are now:
- Sun Life Financial Inc. (SLF-T, “buy”) with a $84 target, up from $77. The average on the Street is $77.23.
- Manulife Financial Corp. (MFC-T, “buy”) with a $44 target, up from $41. Average: $39.30.
- IA Financial Corp. Inc. (IAG-T, “hold”) with a $115 target, up from $98. Average: $109.38.
- Great-West Lifeco Inc. (GWO-T, “hold”) with a $46 target, up from $43. Average: $44.60.
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National Bank Financial analyst Cameron Doerksen thinks Bombardier Inc.’s (BBD.B-T) valuation “remains attractive” ahead of the No. 7 release of its third-quarter financial report, which he predicts will reveal “solid” delivery results and “supportive” end markets.
“Based on data sources we track, we estimate that Bombardier delivered 31 planes in Q3 versus our prior forecast for 29 deliveries with the delivery mix more skewed to larger jets than our prior forecast,” he said. “While our data has generally proven to be fairly accurate, it is often the case that our estimates are off by a handful of planes, but we nevertheless remain confident that the company can meet its full-year aircraft delivery guidance of 150-155 jets.
“According to business aviation data provider WingX, global business jet flying activity in the first nine months of the year was down 1.4 per cent compared to the same period a year ago but up 29.9 per cent versus 2019. Interestingly, WingX notes that Bombardier is one of the few OEMs that is seeing its business jets’ flying activity up year-over-year so far in 2024 with total flights up 3.1 per cent (and up 33.4 per cent versus 2019).”
Maintaining his “outperform” rating, Mr. Doerksen raised his target to $128 from $117, citing “end market dynamics remaining positive and [a] growing confidence that Bombardier can generate solid FCF over a multi-year period.” The average on the Street is $114.21.
He also reaffirmed Bombardier as one of his top picks.
“Although the stock has been a significant out-performer within our coverage universe so far this year, we see further upside as the market gains more confidence in the sustainability of strong free cash flow generation to the end of the decade,” he said.
He added: “Bombardier shares have enjoyed a very strong performance up more than 100 per cent so far in 2024 (versus TSX up 15 per cent), but we still see a compelling argument for valuation multiple upside. Based on the company’s 2025 target of just over $1.6 billion in EBITDA, the stock is trading at just 7.8 times EV/EBITDA, which is a discount to the airframer OEM peer group average of 10 times based on 2025 forecasts (aerospace supplier peers trade at 12 times plus).”
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In other analyst actions:
* Following its Investor Day event on Wednesday, National Bank Financial’s Maxim Sytchev hiked his Bird Construction Inc. (BDT-T) target to $28 from $23 with a “sector perform” rating. Other changes include: BMO’s John Gibson to $35 from $30 with an “outperform” rating, CIBC’s Jacob Bout to $31 from $26 with a “neutral” rating, Canaccord Genuity’s Yuri Lynk to $36 from $28 with a “buy” rating, Raymond James’ Frederic Bastien to $35 from $30 with an “outperform” rating, ATB Capital Markets’ Chris Murray to $35 from $33 with an “outperform” rating, TD Cowen’s Michael Tupholme to $36 from $31 with a “buy” rating and Stifel’s Ian Gillies to $37 from $34 with a “buy” rating. The average on the Street is $32.88.
“We have been wrong on the name since Jan 2024 when we stepped away from it as we have under-appreciated the positive earnings revisions that have led to a doubling in EPS from 2022 levels,” Mr. Sytchev said. “According to the math ... 2027 EBITDA guidance implies a $40.00 NAV (vs. current share price of $30.00). This imputes a sustained positive macro backdrop, continued margin improvements and unchanged government spending priorities. To us, it feels a bit like peak expectations on peak multiples, leading therefore to buying BDT shares at a 2.4-per-cent 2024 FCF yield – for a construction company – lower than a typical metric investors would find acceptable for an engineering consulting entity (for the bulls, on 2027 projections, FCF yield works out to approximately 6 per cent assuming 25-per-cent EBITDA to FCF conversion). Bird management has done a wonderful job - shares have responded accordingly - but we find limited margin of safety at these trading levels. Note that while ROE has indeed rebounded from abysmal 2018 levels, we are back to early 2010′s and at the time shares commanded a 4-5 times EV/EBITDA multiple. If one subscribes to the ‘this time is different’ thesis (it certainly could be the case), we missed the entry point in the low-$20s in early Sep 2024 but perhaps there will be another opening. We reiterate our Sector Perform rating on the shares but boost the target price.”
* National Bank Financial’s Adam Shine bumped his CCL Industries Inc. (CCL.B-T) target to $90 from $87 with an “outperform” rating. The average is $88.10.
“CCL provided an optimistic outlook with its 4Q while being cautious of global macro trends (e.g., interest rates, regional conflicts, and supply chain issues). The momentum continues across all the Company’s segments further supported by M&A and ongoing investments,” he said.
* Predicting its third-quarter results were “hampered by severe weather events,” Raymond James’ Stephen Boland cut his Definity Financial Corp. (DFY-T) target to $53 from $55 with an “outperform” rating. The average is $53.70.
“With a portfolio fully exposed to the Canadian market, we expect DFY to experience sustained operating weakness in 2H24 as 3Q24 catastrophe losses will be materially above our original expectation,” he sai. “We have meaningfully increased (5.0 times) our CAT loss ratio assumptions given the conditions and lowered forecasted net operating income per share for 3Q24 to negative $0.19 (from $0.78).
“The Company had stated in their 2Q24 earnings release that they were expecting firm market conditions over the next 12 months. We believe that pricing will remain firm due to the trend of elevated losses.”
* With the same rationale, Mr. Boland also lowered his Intact Financial Corp. (IFC-T) target by $5 to $264 with an “outperform” rating. The average is currently $268.67.
“On August 24, Intact (IFC) provided an estimate of the impact arising from catastrophe events in the quarter. Summer 2024 in Canada was record-breaking for the industry, as four catastrophic weather events caused a combined total of over $7 billion in insured losses,” he said. “The total loss figure is nearly $1 billion more costly than the next most devastating year in history and reflects a 406-per-cent increase in claims compared to the 20-year average. Notably, two months (July and August) drove the total and materially increased the historical trend ... As a result, we are increasing our total expected catastrophe losses for 3Q24 to $1.1 billion (from $226 million) after the company revised guidance. Positively, the company has not updated the revision since, as they indicated they would if other significant catastrophe losses occurred or if the amount of losses materially differed from this estimate.”
* JP Morgan’s Patrick Jones raised his First Quantum Minerals Ltd. (FM-T) target to $20 from $18 with a “neutral” rating. The average on the Street is $20.46.
* BMO’s Michael Markidis bumped his NorthWest Healthcare Properties REIT (NWH.UN-T) target to $5.50 from $5.25, remaining below the $5.88 average, with a “market perform” rating.
“[CEO] Craig Mitchell has been a stabilizing presence during a difficult period for NWH investors, in our view,” he said. “While we were surprised by the timing of his decision to retire, we take comfort in the nine-month period that has been provided to the Board to effect this CEO transition. Reflecting more recent improvements that have been made to the REIT’s capital structure, we are bumping our target price to $5.50.”
* BMO’s Étienne Ricard raised his TMX Group Ltd. (X-T) target to $46 from $44, exceeding the $43.94 average, with an “outperform” rating.
“TMX has accustomed investors to superior performance across its higher-growth businesses,” he said. “Q3 is no exception with record Montréal Exchange volumes and an estimated 6-per-cent net flows into VettaFi indices. TMX is our top pick within our Canadian Diversified Financials coverage underpinned by rising organic growth prospects at a (still) reasonable valuation.”