Tuesday’s analyst upgrades and downgrades

Inside the Market’s roundup of some of today’s key analyst actions

National Bank Financial’s Patrick Kenny sees several tailwinds likely to propel Canadian utility, pipeline and energy infrastructure stocks in 2024, predicting “robust cash flow per share growth as the M&A landscape continues to unravel.”

In a research report released Tuesday titled Show me the money!, the analyst raised his target prices for equities in his coverage universe by an average of 3 per cent after introducing his financial estimates for fiscal 2025 that include adjusted funds from operations per share growth of 6 per cent with dividends up 4 per cent on average.

“Our top picks continue to be screened using a multi-pronged approach: 1) Double-digit free cash flow (AFFO) yield; 2) healthy balance sheet metrics; 3) attractive per share growth; and 4) strong catalyst potential,” he said.

“Our catalyst potential for 2024 largely relates to executing on asset sales/partnerships to improve balance sheets and share buyback capabilities, combined with asset contracting opportunities to improve cash flow quality profiles, supporting valuation rerate momentum. Overall, we recommend overweighting high-quality, double-digit FCF yields poised for valuation upside. Our top picks for 2024 include ALA, CPX, GEI, SES and TRP.”

While Mr. Kenny thinks commodity prices and market access will a “mixed impact” on the sector, he pointed to three factors likely to lead performance for the year ahead:

* M&A activity

“Our coverage universe announced or closed nearly $40-billion worth of transactions through 2023, expanding value chains and organic growth backlogs on the buy side, while enhancing liquidity positions and improving credit ratios on the sell side,” he said. “We highlight that the market penalized the ‘net buyers’ and rewarded the ‘net sellers’, a trend we expect to continue as investors gravitate towards those companies building dry powder for share buybacks / organic growth. For 2024, we expect several companies to announce additional divestitures including ALA ($0.7-billion), EMA ($1.3-billion), ENB ($2.0-billion) and TRP ($3.0-billion-plus).”

* “Energy Trilemma”

“Despite President Biden’s pause on approving new LNG export licenses ahead of the November U.S. election, we highlight 26 bcf/d [billion cubic feet per day] of projects already pre-approved/under construction, set to triple current U.S. capacity by 2030. Meanwhile, anticipation of TMX and Westcoast Canadian LNG underpins our 5-per-cent annual production growth forecast, while supporting contracting opportunities across various infrastructure assets (ALA, GEI, KEY, PPL, BIP) and also driving further expansions along existing pipeline routes (ENB, TRP).”

* Interest rates and yield spread

”On top of potential interest rate cut tailwinds through 2024, we highlight certain dividend yield spreads sitting above historical average spreads, suggesting further upside (all else equal) from mean reversion (TRP, ENB, SPB),” he said. “Meanwhile, certain Utilities continue to screen as most exposed to valuation downside risk with current dividend yield spreads sitting 70 bps tighter than the five-year average (BIP, FTS, H).”

The analyst made one rating change on Tuesday, downgrading Brookfield Infrastructure Partners L.P. (BIP-N, BIP.UN-T) to “sector perform” from “outperform” based on its relative outperformance.

“With over US$3.50-billion of liquidity through the end of 2023 and a record US$6.7-billion capital backlog, primarily underpinned by the Data segment’s US$4.4-billion of growth projects including BIP’s partnership with Intel for the Arizona-based semiconductor manufacturing facility (net US$3.6-billion BIP investments), we have conservatively assumed US$1.6-billion of growth capital deployed through 2024,” said Mr. Kenny. “Overall, we forecast 2027 estimated AFFO/sh of US$2.55, representing a five-year CAGR [compound annual growth rate] of 6 per cent before considering any upside from M&A activity.”

“With geopolitical/macroeconomic headwinds expected to persist through 2024, we expect BIP to continue building out its global footprint through deploying capital in higher growth platforms while divesting mature assets on favourable terms. Elsewhere, we await a potential FID on NorthRiver Midstream’s proposed NEBC Connector project recently approved by the Federal government and IPL’s HPC complex ramping up to full commercial operations.””

His target for Brookfield Infrastructure’s U.S.-listed shares remains US$32. The average on the Street is US$37.59, according to Refinitiv.

“Rolling our valuation forward to 2025, our US$32 target (unchanged) is based on a risk-adjusted dividend yield of 5.0 per cent (unchanged) applied to our 2025 estimated dividend of US$1.72, a 15.0 times multiple of our 2025e Free-EBITDA (was 14.5 times on 2024 estimated Free-EBITDA) and our DCF/sh valuation of US$31 (was US$32.50),” he concluded. “Combined with the stock rebounding 20 per cent since upgrading the name in October, and a SOTP valuation of US$30, we are moving our rating back to Sector Perform based on relative price performance in conjunction with our 2024 Outlook report.”

Mr. Kenny raised his targets for these equities:

• AltaGas Ltd. (ALA-T, “outperform”) to $33 from $31. Average: $32.67.
• Enbridge Inc. (ENB-T, “sector perform”) to $52 from $49. Average: $53.31.
• Fortis Inc. (FTS-T, “sector perform”) to $55 from $52. Average: $57.88.
• Gibson Energy Inc. (GEI-T, “outperform”) to $25 from $24. Average: $24.75.
• Hydro One Ltd. (H-T, “sector perform”) to $38 from $35. Average: $39.21.
• Keyera Corp. (KEY-T, “sector perform”) to $34 from $33. Average: $35.69.
• Pembina Pipeline Corp. (PPL-T, “sector perform”) to $50 from $46. Average: $52.
• Secure Energy Services Inc. (SES-T, “outperform”) to $12 from $10. Average: $11
• TC Energy Corp. (TRP-T, “outperform”) to $58 from $54. Average: $53.94.

Mr. Kenny reduced his targets for these stocks:

• Emera Inc. (EMA-T, “sector perform”) to $50 from $51. Average: $54.75.
• TransAlta Corp. (TA-T, “outperform”) to $13 from $14. Average: $15.28.
• Tidewater Midstream and Infrastructure Ltd. (TWM-T, “sector perform”) to $1.10 from $1.25.

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Elsewhere, analysts at RBC Dominion Securities expect investors in the Canadian Energy Infrastructure industry to “focus even more than normal on press release outlook statements and conference call commentary rather than the results themselves.”

“Specifically, we think funding (especially in light of lower interest rates) and capital allocation will be the most topical subjects across all companies,” they said. “While we think that there is generally investor appetite for well-contracted small to medium-sized growth projects, we believe the market will take a much more cautious approach to larger initiatives.

In a research report released Tuesday, the analysts said they continue to prefer Midstream stocks “ut keep an eye on renewable power.”

“Given favourable relative valuations, attractive financial setups (e.g., payout ratios; debt/ EBITDA), elevated commodity prices and our expectation for growth in Western Canadian oil and gas production, we continue to like Midstream stocks within Canadian Energy Infrastructure,” they said. “Following a rough 2023 and against a backdrop of moderating interest rates along with improved pricing that reflects the higher cost of capital environment, we would particularly keep an eye on well-capitalized renewable power developers. As part of our Global Power, Utilities & Infrastructure 2024 Outlook, our best Canadian stock ideas are Pembina and AltaGas (for Midstream), Northland Power (for Renewable IPPs), and Emera and TransAlta (Canadian Power and Utilities).”

While making modest forecast adjustments, the firm maintained its ratings and target prices for stocks in their coverage universe.

For their top picks, they are:

• Pembina Pipeline Corp. (PPL-T) with an “outperform” rating and $58 target. Average: $52.
• AltaGas Ltd. (ALA-T) with an “outperform” rating and $32 target. Average: $32.67.
• Northland Power Inc. (NPI-T) with an “outperform” rating and $28 target. Average: $32.
• Emera Inc. (EMA-T) with an “outperform” rating and $62 target. Average: $54.75.
• TransAlta Corp. (TA-T) with an “outperform” rating and $15 target. Average: $15.28.

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Pointing to “high visibility earnings growth,” Scotia Capital analyst Michael Doumet predicts the 2023 “success” of “much beloved” Canadian engineering and construction firms is likely to continue this year.

“Share price performance for the group was stellar in 2023: shares of ATRL, STN, and WSP rose 79 per cent, 64 per cent, and 18 per cent,” he said. “Multiple expansion played a major role in the share price appreciation. We don’t think there’s a need to over-complicate our thinking for 2024: when the industry is ‘hot’ (as it is), multiple expansion is often the path of least resistance. To us, given ATRL is arguably the only ‘cheap’ name in the group, we think it naturally has the most room for outperformance, particularly as we see several catalysts playing out in 2024/25 (i.e. margin expansion, FCF normalization, and asset divestitures). In 2023, WSP lost its premium multiple to STN; we think WSP will need to accelerate organic growth to get it back. For STN to keep it, we believe it will need to accelerate M&A. We rank our preference ATRL, WSP, and STN — and believe investors should remain overweight the sector.”

In a Tuesday research report titled In Full Swing, Mr. Doumet touted visibility on high-single digits organic growth as well as margin expansion, which could extend into 2025 “driven by the infrastructure renaissance, the energy transition, and re-shoring trends.”

“For the group, we forecast 2024 organic growth of 7 per cent to 9 per cent (we believe ATRL/STN has most organic upside),” he said. “The U.S. remains the region with the most compelling growth prospects; IIJA funding is set to accelerate through 2024 and into 2025 (of the $1.2-trillion earmarked, $400-billion funding has been announced; IIJA spend expected to peak late-2024/2025). We see little political risk to the IIJA. In 2023, Canada proved out to be more esilient/higher-growth, and we believe that will follow-through into 2024. EMEA (especially Europe) may be a little slower growth-wise. In terms of project margins, they were in an uptrend in 2023 for the group, and we expect continued momentum in 2024 as we think backlogs carry higher embedded margins. We believe ATRL/WSP have the best prospects for margin expansion in 2024.”

“In our view, industry tailwinds remain robust such that ATRL, STN, and WSP can set an initial 2024 guide in-line with consensus — and beat it. This is what we believe to be the potential sources of upside for each of the names: for ATRL, we believe ATRL Services organic growth can exceed double-digit and EBIT margins can expand approximately 100 basis point; for STN, we think organic growth can exceed expectations — and so can M&A as we view STN as being in the ‘sweet spot’ (it can ‘move the needle’ without having to pay high multiples for larger deals); for WSP, while we believe an organic acceleration would help it regain its premium multiple, we believe the area of upside surprise is more likely to be faster margin expansion.”

Mr. Doumet raised his targets for stocks in the industry. His changes are:

* AtkinsRéalis (ATRL-T, “sector outperform”) to $57 from $52. Average: $51.58.

“We believe ATRL will maintain its superior organic growth, while also improving margins and normalizing its FCF profile. We also believe the monetization of its non-core assets (namely the H407) will act as a catalyst for a re-rate, enabling it to effectively repay its debt and ramp M&A and return of capital,” he said.

* Stantec Inc. (STN-T, “sector perform”) to $116 from $110. Average: $117.55.

“STN trades at 14.7 times EV/EBITDA on our 2024 estimates, reflecting a 1.3 times premium to WSP,” he said. “We believe STN can maintain its premium so long as it generates superior organic growth (its end-market exposure should enable it to, but we do expect organic growth to converge between STN and WSP in 2024) and can accelerate M&A.”

* WSP Global Inc. (WSP-T, “sector outperform”) to $233 from $217. Average: $212.79.

“We believe ATRL will maintain its superior organic growth, while also improving margins and normalizing its FCF profile. We also believe the monetization of its non-core assets (namely the H407) will act as a catalyst for a re-rate, enabling it to effectively repay its debt and ramp M&A and return of capital,” he said.

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Desjardins Securities analyst Jerome Dubreuil thinks the fourth quarter of fiscal 2023 could be “the bottom” for Canadian information technology service providers, emphasizing “growth is decelerating but forward guidance is becoming more optimistic.”

“Global peers’ results so far this earnings season signal further challenges in revenue growth for IT services companies under our coverage given the ongoing challenges of prolonged sales cycles and difficulties in converting pipelines into actual sales,” he said. “Despite this, large-cap IT services companies are breaking 52-week highs, likely due to the general expectation among companies that have reported thus far that revenue growth has now bottomed. We expect companies to continue discussing their respective generative AI monetization opportunities as investors still assess the size of this opportunity. We continue to like the sector’s attractive attributes and we find current valuations reasonable.”

In a report released Tuesday, Mr. Dubreuil said investors are currently “paying for solid business models.”

“The largest global peers in the IT services sector currently trade at 0.5 times below the sector’s EV/FY2 EBITDA spread vs the S&P 500,” he said. “Amid uncertain macroeconomic conditions, we like the sector’s defensive attributes as companies seeking cost optimization often rely on technology investments. Moreover, the sector’s nimble business models and robust free cash flow generation add to its attractiveness. We believe an improvement in companies’ growth prospects could serve as a key catalyst for the sector’s valuation to revert to its historical average spread with the S&P 500.”

He named Converge Technology Solutions Corp. (CTS-T) as his “top pick” ahead of earnings season.

“The stock has risen more than 20 per cent since 3Q earnings (vs 7 per cent for the S&P/TSX Index), and we believe the company is on the right track in terms of asset integration initiatives and earnings visibility,” he said.

Maintaining a “buy” recommendation, Mr. Dubreuil raised his target for the Toronto-based company by $1 to $6. The average is $5.85.

He also raised his target for CGI Inc. (GIB.A-T, “buy”) to $163 from $154. The average is $152.64.

“Our forecast is now slightly below the Street’s estimate as we believe organic growth should continue to slow in light of recent results from global peers,” he said. “However, GIB’s relatively small exposure to consulting (which is more discretionary), large exposure to the government vertical and recent strong bookings should help protect its results from the industry-wide headwinds.”

Mr. Dubreuil maintained his targets for these stocks:

* Quisitive Technology Solutions Inc. (QUIS-X, “buy”) at 70 cents. Average: 72 cents.

“Investors’ focus is likely to remain on strategic initiatives as synergies between the payments and cloud businesses are not as obvious following the PayIQ divestiture. We believe QUIS represents a good 2024 takeout candidate given how markets consistently undervalue the name,” he said.

* Alithya Group Inc. (ALYA-T, “buy”) at $2.70. Average: $2.66.

“We believe more patience is required before we see a material improvement in the company’s top line given we have not noticed an improvement in spending patterns from the financial services sector, which has been a source of challenges for ALYA recently. However, recent focus on efficiency should help profitability,” he said.

Elsewhere, Stifel’s Suthan Sukumar hiked his CGI target to $170 from $160 with a “buy” rating ahead of its Wednesday earnings release.

“Discretionary spend pressures and slower client decisions remain a sector headwind, driving limited visibility on growth, keeping us cautious near-term, while recent bookings momentum and record backlog continues to signal H2-weighted strength, keeping us constructive on the longer-term picture,” he said. “As such, we are not expecting any surprises with the print. Our estimates sit generally in-line with the Street, reflecting expectations for moderating growth alongside further margin expansion as CGI executes on their new cost optimization program. We expect continued bookings performance reflecting CGI’s differentiated positioning with end-to-end capabilities, particularly in managed services and IP, which cater well to shifting client priorities to cost takeouts, boding well for further share gains and stronger growth prospects ahead, in our view, with upside from an improving M&A environment.”

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Ahead of quarterly earnings season in Canada’s real estate sector, Raymond James analyst Brad Sturges thinks improved year-over-year adjusted funds from operations could “act as a possible positive catalyst.”

“We highlight Primaris REIT as a potential stock that could be positioned to deliver a positive earnings surprise, in our view, while we are relatively more cautious on StorageVault’s near-term outlook in meeting our and consensus SP-NOI and AFFO/share growth expectations,” he said. “We also expect the potential for exploring and executing non-core asset sales and capital recycling activities to generally remain a major theme during 4Q23 reporting.”

In a report released Tuesday, he upgraded Flagship Communities REIT (MHC.U-T) to “strong buy” from “outperform” with a US$20.50 target, exceeding the average on the Street of US$20.31.

“We believe Flagship offers a very compelling combination of value as highlighted by its 19-per-cent NAV discount, and low 15 times 2024 estimated P/AFFO multiple valuation, combined with above-average growth expectations for the REIT to generate low double-digit 2024 AFFO/unit growth year-over-year that is mainly driven by our forecast this year for mid-to-high single-digit organic growth year-over-year,” said Mr. Sturges.

“In addition, over the past few months, there have been 2 large US MHC portfolio transactions completed by Capstone (Moore Portfolio sale) and Brookfield (BAM, Brookfield MHC portfolio sale) at going-in cap rates in the 4.5-5.0-per-cent range, highlighting strong institutional demand for core U.S. MHC real estate. While not a perfect comp for Flagship’s U.S. Mid-West MHC portfolio that is weighted towards value-add MHCs, we believe Flagship’s implied 7.0-per-cent cap rate is quite attractive in the context of recent core U.S. MHC portfolio valuations.”

Predicting further sector consolidation could come in 2024 following Blackstone’s deal for Tricon Residential (TCN-T) and NexLiving Communities Inc.’s (NXLV-X) “transformational” acquisition of a multi-family residence portfolio from DevCore Group Inc., Mr. Sturges made these target changes:

• BSR REIT (HOM.U-T, “outperform”) to US$14 from US$14.75. The average on the Street is US$15.32.
• Dream Residential REIT (DRR.U-T, “outperform”) to US$9 from US$8. Average: US$9.31.
• Killam Apartment REIT (KMP.UN-T, “outperform”) to $22 from $21.50. Average: $21.40.
• Minto Apartment REIT (MI.UN-T, “outperform”) to $20.25 from $19.25. Average: $18.70.
• NexLiving Communities Inc. (NXLV-X, “outperform”) to $3 from $2.50. Average: $2.92.
• PRO REIT (PRV.UN-T, “outperform”) to $6.25 from $6. Average: $6.03.
• Slate Grocery REIT (SGR.U-T, “market perform”) to US$10.25 from US$9.75. Average: US$10.17.
• StorageVault Canada Inc. (SVI-T, “market perform”) to $6 from $5.75. Average: $6.03.
• True North Commercial REIT (TNT.UN-T, “market perform”) to $11.25 from $11.50. Average: $9.32.

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Heading into fourth-quarter 2023 earnings season in the precious metals sector, Desjardins Securities analysts John Sclodnick and Jonathan Egilo are “hopeful that more M&A activity could provide equity valuations with a boost, particularly in the gold developer space.

“Developer valuations are trading at historical lows,” they said. “Concurrently, many producers are largely through a deleveraging cycle after reducing investment in exploration. With these realities and higher gold prices set to bolster treasuries, the scene appears ideal for an increase in M&A activity. We are hopeful that some acquisitions with continued meaningful premiums over depressed multiples could see a return to more normalized developer valuations.”

They added: “While we previously lamented the divergence of gold prices and gold equity valuations, we are now wondering whether increased M&A activity with a return of some premiums paid for development assets could incite a broader sector re-rate. We continue to see a historic opportunity for patient investors in the gold developer space, which has been roundly ignored by investors. Based on consensus P/NAV estimates, gold developers are currently averaging 0.29 times NAV, which is, incredibly, below the 0.30 times hit in March 2020 during the pandemic stock market crash. Over the past 10 years, developers have hit peak P/NAV multiples of 0.81 times, so the current level is 64 per cent below that; the midpoint over the past 10 years is 0.52 times, so the current level is 44 per cent below that. With senior and intermediate producers currently trading at consensus P/NAV averages of 1.08 times and 0.70 times, respectively (11 per cent and 24 per cent below their respective midpoints over the past 10 years), it sets a highly accretive and historic opportunity for these companies to bolster their reserves and growth pipelines; it appears they have noticed and are beginning to act on this.”

In a report released Tuesday, the analysts updated their metals price deck and foreign exchange assumptions, leading to a series of target price adjustments.

“Our copper developers benefited from a stronger assumed copper price, while our nickel developers experienced the opposite,” they said. “We would also flag a potential upcoming theme of higher AISC with 2024 guidance vs the Street, which could more than offset any potential appreciation from 4Q earnings beats. Targets increased for AGI, ALDE, ATX, AYA, EQX, K, KRR, LUG, OGC, SKE, VGCX and WDO, declined for GGD, ITR, LGD, NICU, ODV, SIL, SLVR, SSRM and USA, and were unchanged for the remainder.”

“We are releasing our preview early and see far more potential for beats/ misses or for consensus estimates to adjust. We see potential for AR to miss on higher costs, and for CG, SIL, VGCX and WDO to beat on 4Q adjusted EPS. We currently forecast an adjusted EPS miss for SSRM but believe consensus could fall closer to our figure as the Street factors in sales lagging production.”

Mr. Sclodnick upgraded Equinox Gold Corp. (EQX-T) to a “buy” recommendation from “hold” previously, citing “a potential return to target of more than 30 per cent, greater comfort with the balance sheet and that it is now through the heavy investment period with the potential for deleveraging later this year.”

His target rose to $7.75 from $7.25. The average on the Street is currently $8.75.

The analysts also reaffirmed their three top picks in the sector:

* OceanaGold Corp. (OGC-T) with a “buy” rating and $4 target, up from $3.50. Average: $4.06.

* Skeena Resources Ltd. (SKE-T) with a “buy” rating and $19.75 target, up from $18.25. Average: $15.32.

* ATEX Resources Inc. (ATX-X) with a “buy” rating and $2.30 target, up from $2.20. Average: $2.35.

“We like OGC and believe the company is now at an inflection point, transitioning to substantial FCF and exiting an investment cycle as Haile UG ramps up,” they said. “SKE is our top developer pick and is the preeminent developer project, ticking all of the boxes that a producer would look for—average annual production above 300koz Aueq, AISC below US$500/oz and located in a safe jurisdiction. ATX remains our top explorer pick—alongside ATX having what we would consider peer-leading prospectivity due to the early-stage nature of the discovery, we also see a compelling valuation on the current resource.”

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Eight Capital analyst Adhir Kadve thinks WonderFi Technologies Inc. (WNDR-T) is the “best way to gain crypto exposure in Canada.”

He initiated coverage of the Vancouver-based company with a “buy” recommendation on Tuesday, touting the “significant scale” of its platform and believing its “dominant market position and a massive user base represent low-hanging fruit for monetization.”

“With more than 1.6 million registered users, the significant scale which WonderFi has assembled both through M&A and organic means gives the company a dominant position in the Canadian crypto landscape and positions the company well to continue to grow wallet share against both large and smaller competitors,” said Mr. Kadve. “While crypto platforms have come under regulatory scrutiny due to the publicized failure and subsequent loss of user assets from exchanges such as FTX and Celsius, WonderFi’s prioritization of regulatory compliance should provide some level of comfort to users that their assets are safe on the platform and a competitive advantage over other platforms.”

“WonderFi’s vast 1.6 million registered users, several of whom do not currently transact on the platform, represent low-hanging fruit for monetization. Further, with initiatives such as growth in OTC volumes, on-going commercialization of SmartPay, and greater staking monetization, we see several ways in which WonderFi can achieve growth, irrespective of the broader industry.”

He set a target of 50 cents per share, matching the average.

“In our view, WonderFi offers investors pure-play exposure to the growth of the digital asset ecosystem,” said Mr. Kadve. “While we acknowledge that volatility in the price action of broader digital assets will likely impact WonderFi’s financial results, we also see a compelling set of business initiatives which can also contribute to the company’s growth trajectory. These include better monetization of the company’s 1.6 million users, growth in OTC trading volumes, product development and M&A optionality.”

“WonderFi currently trades at 1.8 times fiscal 2025 estimated EV/Sales vs. a group of crypto trading platforms who trade at 5.3x, and industry bellwether Coinbase Global Inc. (COIN-N, Not Rated), who trades at 8.2 times, and Consumer Fintech companies with exposure to crypto currencies who trade at 3.0 times. Our $0.50/share target price is based on 5.0 times, a discount to COIN, on account of the company’s early days of execution and smaller scale. That said, we see the valuation gap narrowing with the focused execution of key initiatives laid out in this report. Key risks to our target include volatility in the crypto markets, regulatory changes, protocol updates and the competitive environment.”

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In other analyst actions:

* Canaccord Genuity’s Katie Lachapelle initiated coverage of Global Atomic Corp. (GLO-T) with a “speculative buy” recommendation and $4.75 target, exceeding the $4.43 average.

* Scotia’s Mario Saric trimmed his Allied Properties REIT (AP.UN-T) target to $24.25 from $25 with a “sector outperform” recommendation ahead of the Wednesday release of its fourth-quarter results. The average is $22.33.

“Overall, AP is up 44 per cent since Q3 results (vs. 17 per cent for CAD REITs and 55 per cent for U.S. Office REITs), eating into some of the significant upside we saw and creating a more balanced risk-reward heading into Wednesday, in our view,” he said. “That said, we’re keeping our SO rating based on what we still believe is a very discounted valuation (implied $325/sf), including a highly attractive (and we think sustainable) 9-per-cent distribution yield, which is a reasonable minimum total return CAGR through 2025 (upside = 300bp+ occupancy gains, capital allocation targeting immense residential value, M&A or a ‘soft landing’).”

* Jefferies’ Dushyant Ailani lowered his Ballard Power Systems Inc. (BLDP-Q, BLDP-T) target to US$3.50 from US$4 with a “hold” rating. The average is US$5.06.

* CIBC’s Allison Carson raised her target for Snowline Gold Corp. (SGD-X) to $8.50 from $7.50 with an “outperformer” rating. The average is $9.83.

“Snowline released the final set of drill results from its 2023 exploration program at its flagship Valley deposit. Drilling continues to demonstrate broad intervals of consistent, multi-gram gold starting from surface. Based on the 2023 program, we continue to see expansion potential to the northeast and at depth for the Valley deposit,” she said.

* CIBC’s Mark Petrie cut his Saputo Inc. (SAP-T) target to $36 from $37, remaining above the $34.17 average, with an “outperformer” rating.

“We have updated our model for FQ3 and unfavourable market updates in the U.S. and Europe segments. Our FQ3E EPS falls to $0.39 (was $0.44), and this flows through to a $2.00 EPS for F2025E (was $2.05). We continue to expect operational improvement in F2025, but commodity markets remain a headwind. Our price target moves to $36 (was $37). Though near-term issues persist, we expect better market balance in H2/24 and F2025,” he said.