Inside the Market’s roundup of some of today’s key analyst actions
Scotia Capital analyst Ben Isaacson thinks a pair of executive orders signed over the weekend by U.S. president Donald Trump could “ravage” Canada’s forestry industry.
“Over the weekend, U.S. President Trump signed two Executive Orders (EOs) that could put more pressure on the Canadian lumber industry than it has ever faced,” he said. “In short, Trump has now made lumber imports (more than 80 per cent come from Canada) a national security issue, to be solved by: (1) rapidly opening up timber for sale on federal land; (2) removing obstacles that unnecessarily delay any associated regulatory approvals; and (3) the possible implementation of actions to mitigate these ‘national security threats’, such as tariffs, export controls etc. This includes downstream derivative wood products, which likely means OSB, pulp, paper etc.”
“In our view, this is a precursor move to the 25-per-cent lumber import tariff Trump threatened two weeks ago, and which would be stacked on top of a 25% tariff on the U.S. import of all Canadian goods due to start [Tuesday], and which would also be stacked on top of what will soon be punishing softwood lumber duties for most players later this year.”
Canadian homebuilders say U.S. tariffs on steel and aluminum would hurt more than they did in 2018
In a note released Monday, Mr. Issacson emphasized “it’s hard to see how parts of the Canadian Paper & Forestry Products sector aren’t ravaged” if all the taxes are implemented.
“As we’ve seen first-hand over the past two years, lumber demand is far from inelastic,” he explained. “While some level of tariffs can be passed down to the consumer via the home-builder, demand is already fragile and likely to weaken now on rising inflationary risk that is only going to accelerate with tariffs on Canada, Mexico, Europe, and of course, China already. Accordingly, it’s unlikely that lumber taxes of up to 85 per cent (25-per-cent lumber + 25-per-cent Canada + up to 35-per-cent duties near the end of the year) will be accepted on a dollar for dollar basis through the channel by a weaker consumer facing even higher housing prices. It’s also hard to see how SPF demand isn’t at risk - both from the U.S. and from Canada, as downstream domestic demand will weaken too with reduced import demand from the U.S. Rapid inventory build through the channel could see domestic prices once again drop below the marginal cost of production.”
With that view, the analyst downgraded his recommendation for shares of Interfor Corp. (IFP-T) to “sector perform” from “sector outperform” previously.
“Simply put, lumber producers in general no longer have the B/S flexibility to allow their mills to bleed financially like in the past; we’re no longer coming off the peak cycle like in mid ‘22,” he said. “This is especially true for IFP, which has been hanging on to a 35-per-cent to 36-per-cent net debt to invested capital ratio for several quarters, mostly through sourcing non-operational cash inflow one-offs, although with recent support from improved lumber margins. If all of these U.S. taxes move forward, going concern risk will inevitably rise for marginal mills in Canada. While IFP’s mills are at no greater risk than any of its peers, B/S risk will undoubtedly rise in this scenario. It has to. This matters more for our IFP investment thesis than for others within our coverage universe, given an elevated starting point of leverage. In the past, we wrote that we could look past a stretched B/S when a market recovery was imminent; this is clearly no longer the case if Trump implements anything close to what he is threatening.
“IFP remains our preferred way for investors to gain lumber torque. The management team continues to prudently operate the assets and allocate capital to high-grading the portfolio. While the mid-term value proposition for IFP hasn’t changed (i.e., why no change to our PT), near-term share price outperformance is at risk if/when investors price-in higher B/S risk to the company.”
His Street-low one-year target for Interfor shares remains $22.50. The average is $27.82, according to LSEG data.
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ATB Capital Markets analyst Martin Toner thinks the sharp selloff that followed the release of “mixed” fourth-quarter 2024 financial results for Docebo Inc. (DCBO-T) was “unwarranted,” emphasizing “adequate” 2025 guidance, its growth runway, potential gains from artificial intelligence and “expanding” profitability.
Accordingly, he upgraded his rating for the online training software vendor to “outperform” from “sector perform” previously.
“We see an attractive risk/reward at these levels with 62-per-cent upside, as the stock trades at 2025 EV/EBITDA of 30 times, relative to our DCF-implied valuation of 36 times,” he said.
On Friday, TSX-listed shares of Docebo plummeted 13.8 per cent after it reported quarterly consolidated revenue of $57-million, up 15.7 per cent year-over-year and above the Street’s expectation of$56.2-million. Adjusted EBITDA of $9.5-million also topped the consensus forecast ($9.1-million), however the company’s annual recurring revenue (ARR) of $219.70-million (a gain of 13.1 per cent year-over-year) represented he fifth consecutive sequential deceleration in growth. Incremental ARR of $5.6-million was down from $12.5-million in the fourth quarter of 2023.
For the current fiscal year, management guided for total revenue growth of 11-12 per cent, missing analysts’ projection of 13.8 per cent. Its adjusted EBITDA margin forecast of 18-19 per cent was largely in line with expectations (18.4 per cent).
“DCBO’s FY25 guidance was relatively in-line, which could cushion the impact of the mixed results,” said Mr. Toner. “On the call, management highlighted the potential impact of AI on the business longer-term; the Company is continuing to integrate AI onto its platform, which management believes can expand its revenue streams and increase DCBO’s stickiness. "
“We believe Friday’s stock move was an overreaction. We have considered risks around the renewal cycle and pressure from customers, especially U.S. government customers, which Docebo has targeted to be a key growth driver. We suspect Docebo’s learning technology, which can save costs, like travel and maximize human resources, could benefit from US government budget restraint. We remain constructive on DCBO’s growth prospects given the underlying momentum seen in high-value verticals. In our view, DCBO’s growing FCF profile and continued operating leverage through G&A expense control, the company will continuously reinvest money into its enterprise go-to-market motions and government expansion initiatives, which will help accelerate growth as the Company increases the velocity of large deals.”
In justifying his more bullish view, Mr. Toner said he thinks Docebo is now “becoming an AI play.”
“DCBO continues to build on its AI strategy, both from a product integration standpoint and corporate standpoint,” he explained. “According to management, DCBO has built their own proprietary AI platform as a service, and believe that agentic AI will enable customers to personalize learning experiences. Longer-term, the vision is to become a hub for an AI learning experience, enabling customers to execute both complex and simple tasks within the platform. Management believes that AI will allow DCBO to expand its revenue streams and increase stickiness of platform, while also enabling the Company to reduce costs internally and improve margins. Specifically, management sees opportunities to use AI for pipeline generation, sales ops and R&D to enhance operating leverage.”
While he cut his first-quarter revenue forecast to account for the miss, Mr. Toner maintained a target price of $75 for Docebo shares. The average target on the Street is $72.17.
Elsewhere, analysts making target changes include:
* National Bank’s Richard Tse to US$50 from US$55 with an “outperform” rating.
“While the results were solid, Docebo did point to continuing macro challenges and some (continued) slowing in underlying metrics like Net Dollar Retention (NDR), Customer Count additions and Average Contract Value (ACV),” said Mr. Tse. “That said, while there is slowing in the above metrics, we also don’t think those metrics are entirely comparable (and fully representative of the underlying business) .... At the same time, those metrics are also exacerbated by a large renewal cycle across FQ4′24 / FQ1′25 in a cautious macro backdrop. Our view is that continued execution on its large enterprise market under growing operating leverage will have the name re-rating higher with that execution.
“Bottom line, we continue to like Docebo. In our view, we see this as a disruptive player that’s validated by an expanding marquee (enterprise) customer base against incumbent players. Under [Friday’s] pullback, the reset valuation at 3.5 times EV/Sales on FY25E is approaching the post-pandemic trough of 3.0 times. We like the risk-to-reward profile - Outperform. We are trimming our price target to US$50 (from US$55) based on our revised forecasts.”
* Stifel’s Suthan Sukumar to US$52 from US$60 with a “buy” rating.
“In our view, beyond the FX, Docebo’s lighter-than-expected F25 guide suggests incremental conservatism around timing of sales pipeline conversion (given current macro/tariff noise) and a peak renewal cycle in Q1 (risk of higher non-core SMB churn),” he said. “That said, sustaining underlying momentum with new record pipeline generation, inflecting ACVs and new product attach-rates, alongside scaling partner engagement supports our thesis for Docebo’s competitive differentiation and growing enterprise penetration. We think growth ahead will prove to be durable and continue to see prospects for upside, namely from larger enterprise wins, U.S. FedRAMP deals, and M&A, none of which are reflected in the current guide. We lower our target to $52 (was $60) on lower estimates. We see the pullback as an attractive entry point.”
* Canaccord Genuity’s Robert Young to US$48 from US$57 with a “buy” rating.
“Following Friday’s selloff, Docebo trades at 3.7 times calendar 2025 estimated EV/Sales, which we believe is an attractive entry point for a ‘Rule of 30′ company,” he said. “We also note that the Inspire conference in April is a positive catalyst. We have made downward revisions to our estimates to reflect the Q1 and F2025 guidance. That said, we think the bad news is behind DCBO and remain BUY rated.”
* CIBC’s Stephanie Price to US$48 from US$60 with an “outperformer” rating.
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While units of Chartwell Retirement Residences (CSH.UN-T) have jumped over 36 per cent over the past 12 months, including a gain of more than 12 per cent thus far in 2025, Desjardins Securities analyst Lorne Kalmar thinks it is not time to sell, seeing “still a long runway of growth ahead.”
“CSH reported 38-per-cent FFOPU [funds from operations per unit] growth in 2024 and is poised to deliver average annual FFOPU growth of 17 per cent through 2025/26,” he said. “While the past several years have benefited from occupancy and margin recoveries, we highlight that we have yet to see any material change in rent growth. We expect market rent growth to begin accelerating in 2026 as portfolio occupancy reaches stabilized levels. This dynamic should underpin outsized FFOPU growth in 2027 and beyond.”
After the bell on Thursday, Mississauga-based Chartwell reported FFOPU of 21 cents for its fourth quarter of fiscal 2024, up 30 per cent year-over-year and a penny above the 20-cent estimate of Mr. Kalmar and the Street. The beat came alongside same-property net operating income growth of 14.4 per cent and same-property occupancy of 90.1 per cent, rising 5.1 per cent year-over-year.
“Management noted that a key reason it expects rent growth in the 4-per-cent range for 2025, which is largely consistent with what was achieved over the past decade, is that it is still using incentives at some homes to drive occupancy,” said Mr. Kalmar. “As the portfolio stabilizes over the course of 2025 and 2026, we expect to see the use of incentives decline. In combination with the stabilization of the broader market, we expect an acceleration in market rent growth in the coming years. Management noted that homes where occupancy has fully stabilized are achieving turnover lifts in the high single to low double digits, while renewal spreads are 4–5 per cent. If we assume one-third turnover, that equates to 6–7-per-cent blended rent growth. As demand continues to accelerate and new supply remains constrained, we believe market rent growth will accelerate further and translate into higher blended leasing spreads in the medium term. If we take 6–7-per-cent NOI growth (assumes no improvement in occupancy/margins) and layer on CSH’s operating leverage, we get 10-per-cent FFOPU growth, which does not account for the impact of any acquisitions or developments.”
After modest increases to his 2025 and 2026 estimates, Mr. Kalmar raised his target for Chartwell units to $20 from $18, keeping a “buy” rating. The average on the Street is $18.91.
Elsewhere, others making target changes include:
* RBC’s Pammi Bir to $19 from $18 with an “outperform” rating.
“As we flip to 2025, we expect an encore year of double-digit SP NOI growth from the effects of CSH’s substantial operational advances, demographic support, and a new supply pipeline that has shrunk to nineyear lows,” said Mr. Bir. “As well, by leveraging its significantly improved cost of capital, we expect CSH to continue high grading the portfolio through acquisitions that support stronger long-term earnings and NAV upside. Coupled with its sector-best growth profile, we reiterate Outperform.”
* Scotia’s Himanshu Gupta to $19 from $18 with a “sector outperform” rating.
“Given the run-up in stock, more scrutiny on valuation. CSH still has one of the lowest PEG [price/earnings to growth] ratio of 1.1 times vs sector average of 2.2 times,” said Mr. Gupta. “CSH could look expensive on P/NAV at 14-per-cent premium to NAV. However, we note that large U.S. peers are trading at 60 per cent to 130-per-cent premium. We think, market is looking at NAV growth potential in coming years as occupancies & margins stabilize.
* TD Cowen’s Jonathan Kelcher to $20 from $19 with a “buy” rating.
“Chartwell delivered a strong finish to the year with robust retirement fundamentals expected to carry into 2025. With a clear sight to reaching mgmt’s 95-per-cent same-property occupancy target by year-end, we believe accelerating market rents should support further growth. Despite Chartwell’s unit price up 11 per cent year-to-date, current valuations remains significantly discounted relative to U.S. peers, which we view as unwarranted,” said Mr. Kelcher.
* CIBC’s Dean Wilkinson to $20 from $19 with an “outperformer” rating.
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After a “good Q4 finish,” RBC Dominion Securities analyst Pammi Bir thinks Granite Real Estate Investment Trust (GRT.UN-T) remains “well-positioned to navigate an environment of elevated macro uncertainty, particularly around U.S. trade policies.”
“Admittedly, we would have preferred a more robust occupancy outlook for the year ahead,” he added. “That said, 2025 organic NOI growth guidance is strong nonetheless, with solid renewal leasing traction already made. As well, FX tailwinds are providing a decent boost. Combined with a balance sheet that creates plenty of optionality and valuation that seems excessively discounted, reiterate Outperform.”
Last Wednesday, the Toronto-based REIT, which focuses on logistics, warehouse and industrial properties in North America and Europe, reported funds from operations per unit of $1.47, up 16 per cent year-over-year and topping both Mr. Bir’s $1.38 estimate and the consensus projection of $1.37.
“Our overall read on the print is largely neutral. The Q4 beat versus us was mainly from lower G&A costs ($0.02), higher interest income ($0.03), lower current taxes ($0.03), and favourable foreign exchange moves,” he said. “Excluding the net positive impact of some lower visibility amounts (i.e., a realized FX gain, tax provision reversal, capital tax credit, and minority interest adjustment), Q4/24 FFOPU would have been $1.41. Operationally, the quarter finished strong with occupancy rising as telegraphed and solid organic NOI growth. Unit repurchases also accelerated, developments advanced, and the IFRS NAV increased (partly aided by FX).”
“SP NOI rose 6.3 per cent year-over-year (up 4.2 per cent year-to-date), mainly from higher rents, with Canada leading (up 12.6 per cent year-over-year), followed by the U.S. (up 6.5 per cent), and Europe (up 3 per cent). In-place occupancy improved to 94.9 per cent (up 60 basis points quarter-over-quarter) on U.S. gains, while leasing spreads were healthy at up 14 per cent (up 15 per cent year-to-date). For 2025, GRT sees quarterly average SP NOI growth of 4.5-6 per cent, supported by solid leasing spreads (30-35 per cent) and modest 2H/25 occupancy gains (to 95.5-96 per cent) after some slippage in 1H/25. We think investors were looking for stronger occupancy traction. Yet considering lower-than-usual macro visibility, we view the guide as decent and within reach. GRT noted its outlook reflects progress to date and conservative assumptions, rather than a specific call on US tariffs. Encouragingly, 66 per cent of 2025 lease expiries are already renewed at robust 43-per-cent spreads. Management also cited minimal impact on leasing velocity from tariff-related concerns, while USD strength is providing an earnings and NAV tailwind. Interest on its larger U.S. availabilities has also picked-up.”
Seeing Granite’s “solid growth profile intact,” Mr. Bir also emphasized its “stellar” balance sheet.
“GRT announced a new build-to-suit project in Houston where it signed a 392K sf lease with a consumer food product company,” he said. “Estimated costs are US$50-million, with an attractive 7.5-per-cent yield. While acquisitions remain quiet, GRT’s low leverage and high levels of retained cash provide ample flexibility to pursue opportunistic deals or buyback units. Indeed, buybacks accelerated postQ4 to $32-million ($68.75/unit). Given the attractive implied cap rate, makes sense (and cents!) in our view; we wouldn’t be surprised to see more.”
Citing “heightened macro uncertainty,” the analyst trimmed his target for Granite units to $86 from $91, keeping an “outperform” rating. The average is $87.
“While better visibility would likely lift sentiment, valuation screens attractive to us,” he said. “Assuming reversion to its historical P/NAV (down 4 per cent), we estimate current levels imply 15-per-cent NOI erosion or 100 basis points of cap rate expansion (or mix thereof), which seems excessive.”
Elsewhere, Desjardins Securities’ Kyle Stanley lowered his target to $85 from $90 with a “buy” rating.
“Though our FFOPU outlook improved by 1 per cent through 2026, the lower target reflects heightened trade-related uncertainty and a compressed target multiple,” said Mr. Stanley. While its 50-per-cent U.S. portfolio exposure mitigates the Canadian tariff risk, its more than 25-per-cent exposure to the auto sector (as a percentage of revenue) adds a layer of uncertainty. That said, we see GRT offering a 7-per-cent two-year earnings CAGR at a 4-times discount to LTA [long-term average] P/FFO.”
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While the impact of U.S. tariffs remains “an overhang” for Chemtrade Logistics Income Fund (CHE.UN-T), National Bank Financial analyst Zachary Evershed thinks its direct exposure is “structurally supportive” of passing a significant portion of any increased costs on to U.S. customers.
“Chemtrade also benefits from a weaker Canadian dollar as 60 per cent of its sales come from the U.S.,” he added.
That view led him to reaffirm the Toronto-based company as one of his top picks for 2025 following last week’s release of better-than-expected fourth-quarter results.
“Having been in continued discussions with customers over the past 45-60 days, though the situation is fluid, management remains confident in passing through a significant portion of potential tariff costs,” he said.
“Additionally, given CHE’s 60-per-cent U.S. sales exposure, each $0.01 weakening in the CAD (relative to USD) lifts EBITDA by $4 million. Customers are not currently pulling purchases forward, as notably many lack meaningful storage to do so.”
On Thursday, Chemtrade reported quarterly revenue of $446.5-million, up 5.8 per cent year-over-year and above both Mr. Evershed’s estimate of $423.2-million and the consensus of $419.1-million. Adjusted EBITDA of $108.6-million on 24.3-per-cent margins “easily” topped his forecast of $95.6-million forecast on 22.6-per-cent margins and the Street’s call of $95.7-million, while earnings per unit of 9 cents missed expectations (18 cents and 17 cents, respectively) due, in part, to an impairment charge related to its joint venture with Kanto Group in Arizona.
“The $3.8 million JV impairment related to Casa Grande, which remains on hold, was more year-end accounting cleanup than a change in commercial outlook,” the analyst said. “Cairo is ramping up saleable product (merchant acid), and will push purity up over time to eventually qualify with ultra-pure acid customers, with UPA sales anticipated in 2026. Thus far, only TSMC has finished construction of their U.S. fab, but multiple customers will begin their qualification processes soon (sampling), a number are already auditing Cairo’s quality processes. Despite funding and construction delays, management believes that NA UPA capacity will ultimately be scarce three years out with only one other producer ramping capacity.”
After revising his estimates to account for revisit the results, the latest macro data points, commodity price movements, and management remarks, Mr. Evershed increased his target for Chemtrade units by $1 to $16.50/. The average target is $14.14.
“Given the broadly positive outlook on supply/demand and management alignment on addressing compressed valuation through the NCIB, we reiterate our Outperform rating,” he said.
Elsewhere, Scotia’s Ben Isaacson increased his target to $13.25 from $12.50 with a “sector perform” rating.
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In a separate report, despite its 2025 financial guidance falling short of his forecast, Mr. Evershed thinks Jamieson Wellness Inc. (JWEL-T) “continues to deliver on ambitious growth plans.”
Shares of the Toronto-based vitamin company slid 5.5 per cent on Friday after it reported fourth-quarter revenue of $244.8-million, up 11.1 per cent year-over-year but below both the analyst’s $254.3-million estimate and the consensus projection of $254.0-million. Adjusted EBITDA of $59.4-million on 24.3-per-cent margins came in largely in line with expectations ($59.7-million and 23.5 per cent and $58.7-million and 23.1 per cent, respectively). Adjusted earnings per share of 80 cent matched forecasts.
Investors expressed concern after Jamieson trimmed its adjusted EBITDA expectations for the current fiscal year to $157-163-million from $155-165 million (versus the consensus estimate of $161.5-million). Adjusted EPS guidance of $1.82-1.93 was below the Street’s $2 projection, leading Mr. Evershed to lower his forecast.
“While growth by country was mostly as expected, with 11.4 per cent year-over-year in Canada (NBF: 13.5 per cent), 38.9 per cent in China (NBF: 42.0 per cent), and 14.2 per cent in International (NBF: 10 per cent), Youtheory in the U.S. was weaker due to the timing of promotional purchases in traditional distribution, although its international, new distribution and e-commerce increased more than 25 per cent year-over-year,” said Mr. Evershed. “Separately, YT’s new e-commerce partnership resulted in a change to revenue recognition this quarter, on the balance shaving 4-6 per cent off FY25 growth expectations (2025 guidance: 5-15 per cent vs. long-term outlook: 10-20-per-cent CAGR). Profitability on a dollar basis should remain the same or improve however, and this should be an accounting drag only in 2025 as the change is annualized.”
“Management reiterated that based on the latest tariff announcements, they don’t expect material pressure on costs, and that with their global supply chain, the business has the flexibility to protect margins come what may. One potential point of exposure, however, is in a few U.S.-based Strategic Partners customers, though likely non-material as the entirety of SP averages only 8 per cent of consolidated EBITDA.”
Reiterating his “outperform” recommendation, Mr. Evershed reduced his target to $39.50 from $42 with his lower estimates. The average is $41.07.
Elsewhere, calling it “a defensive growth stock that is flying under the radar,” TD Cowen’s Derek Lessard reiterated a “buy” rating and $42 target, while Canaccord Genuity’s Tania Armstrong-Whitworth raised her target to $43 from $39.75 with a “buy” rating.
“JWEL shares are down 19 per cent year-to-date, which we think could be tied to investor preference towards large caps under economic uncertainty and unwarranted tariff fears (JWEL has less than 10-per-cent revenue exposure),” Mr. Lessard said. “Given the strong consumption trends and solid execution around its two main growth drivers, our positive long-term view is unchanged, which we believe makes the stock pullback an attractive buying opportunity.”
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In other analyst actions:
* Predicting North American airlines may be hurt by difficult macroeconomic conditions for consumers moving forward, JP Morgan’s Jamie Baker downgraded Air Canada (AC-T) to “neutral” from “overweight” with a $24 target, falling from $34. The average on the Street is $24.85.
“Investor consternation has crescendoed once again, focused primarily on the consumer, domestic capacity, and the impact of reduced government travel,” Mr. Baker said. “As a result, share price momentum in 2025 has eased considerably (for most) from the torrid pace witnessed in last year’s final months.”
* Raymond James’ Daniel Magder reduced his Boralex Inc. (BLX-T) target to $39 from $41 with an “outperform” rating. The average is $40.10.
“Despite challenging weather negatively affecting BLX’s results for 4Q24, we continue to affirm our view of the company as a high-quality renewable IPP with exposure to attractive markets,” said Mr. Magder. “With the stock trading near historical lows, management has instituted an NCIB for up to 10 per cent of the public float. With the news this week of CDPQ’s acquisition of Innergex, we believe there may be renewed interest from private equity in Canadian IPPs, including Boralex.”
* Stifel’s Daryl Young raised his target for shares of Boyd Group Services Inc. (BYD-T) to $285 from $275 with a “buy” rating. The average on the Street is $272.
“We are updating our model for the company’s new five-year plan (2024-2029) announced February 26,” he said. “While the collision repair industry remains challenged by depressed claims activity, we think there are reasons to be optimistic on improving performance in 2025 and beyond (moderating insurance costs, stabilizing used car prices/total loss rates, normalized weather patterns, and easier comps). Moreover, as part of Boyd’s new five-year plan, management is taking a tactical approach to right-sizing costs to match the current market dynamics with Project 360 targeting $100-million of savings. Also, we think management’s introduction of more prescriptive modeling inputs in the 5-year plan (i.e. organic growth, margin progression, shop counts, etc.), will reduce forecast risk and related share price volatility. In our view, Boyd is poised for a return to delivering stable, predictable earnings and potentially an “under promise, over deliver” dynamic.”
* Stifel’s Ian Gillies cut his Doman Building Materials Group Ltd. (DBM-T) to $9 from $11.50 with a “buy” rating. The average is $11.08.
“Doman posted a solid 4Q24 with EBITDA beating consensus and Stifel by 5.3 per cent and 5.4 per cent, respectively,” he said. “However, we are cautious on the outlook for the sector given 1) elevated interest rate resulted in tepid new housing starts and low R&R activity and 2) potential tariffs causing uncertainty for consumers. We have taken a conservative approach to revise the company’s 2025E EBITDA 12.3 per cent lower to $230-million and 2026E EBITDA 14.8 per cent lower to $235-million. As a result, we are reducing our TP to $9.00 (prior: $11.50) while maintaining our BUY rating. We remain constructive on the medium-term prospects for the company given the chronic undersupply of housing in the U.S. and Canada. The company’s leverage also creates significant torque for the equity value if a home building recovery occurs.”
* Resuming coverage following a $59.15-million secondary private placement by Dominion Lending Centres Inc.’s (DLCG-T) co-founders, Desjardins Securities’ Gary Ho increased his target for its shares to $9 from $8.50 with a “buy” rating. The average is $9.42.
“Post-offering, they continue to own more than 50 per cent of the shares outstanding,” he said. “We increased our estimates following 4Q preliminary results; we like the continued momentum for DLCG with the housing market recovery and upcoming refi wall. We also see organic and inorganic growth opportunities that have the potential to drive the share price materially higher.”
* TD Cowen’s Jonathan Kelcher increased his Extendicare Inc. (EXE-T) target to $13 from $10.50 with a “hold” rating, while Canaccord Genuity’s Tania Armstrong-Whitworth raised her target by $1 to $14 with a “buy” rating. The average is $13.13.
“EXE is starting to see the benefit from all three business segments performing well. We expect Home Health Care to be the main earnings driver going forward, largely on demand growth - which EXE can now keep pace with. Our estimates, NAV and TP all rise on higher NOI estimates, however we are maintaining our HOLD rating as the return to our TP does not justify a BUY,” said Mr. Kelcher.
* Desjardins Securities’ Doug Young cut his Laurentian Bank of Canada (LB-T) target to $27 from $29 with a “sell” rating, , while Raymond James’ lowered his target to $27 from $29 with a “market perform” rating. The average is $27.82.
“Cash EPS was slightly above our estimate and consensus; however, this was driven by lower PCLs. Adjusted pre-tax, pre-provision (PTPP) earnings were 5 per cent below our forecast (down 9 per cent year-over-year), driven by higher expenses. At the end of the day, FY25 is a transition year for LB, with management focused on executing its strategic plan,” he said.
* Raymond James’ Michael Barth bumped his Pembina Pipeline Corp. (PPL-T) target to $63 from $62 with an “outperform” rating. The average is $61.69.
“We continue to see good value in the stock at these levels given: results this quarter were strong, FY25 guidance strikes us as conservative, new growth and contracting momentum was announced with this release, commentary around Alliance rate discussions was positive, and ‘data center optionality’ now exists,” he said. “PPL is trading at a 10-per-cent DCF yield on our 2025 estimates, has a great balance sheet, and plenty of long-term optionality that we don’t believe the market is paying for today. This remains one of the best ways to gain exposure to the theme of rising natural gas/NGL production. For all these reasons, we reiterate our Outperform rating.”