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Inside the Market's roundup of some of today's key analyst actions Bombardier Inc. (BBD.B-T) is entering "the beginning of a new era," according to Desjardins Securities analyst Benoit Poirier, who came away from its Investor Day event in Toronto on Wednesday "pleased" with its progress on both near- and long-term financial objections. "BBD reaffirmed its 2025 targets, noting that it is well on track to meet its objectives, and provided additional details on how it plans to achieve them," he said. "This should provide investors with confidence that the US$900-million FCF target is achievable—consensus (US$854-million) is currently below this threshold. BBD also introduced new long-term 2030 growth target, but most importantly, (1) they can all be achieved organically with internal resources and limited capex (see more below); and (2) are incremental and do no count on any increase in deliveries as management indicated that the 150 aircraft/year will be the new cruising altitude. "We view this as positive as BBD has in the past (previous management team) over-delivered and chased volume/sales to fund its civil investments (and investors have long memories). BBD is a much different company today with a different business plan; back in 2008-09, BBD had a significant percentage of its backlog exposed to bizjet resellers/agents/speculators with unfavourable payment terms (cancelled orders when the Great Financial Crisis hit), in addition to having exposure to the more elastic light jet market with the Learjet. Since then, BBD has cancelled all of those reseller agreements and now uses an internal sales team (no exposure in current backlog) and no longer manufactures any light jets (discontinued Learjet in 2022). We view the decision." Calling its 2030 targets "impressive," Mr. Poirier sees the company's diversified revenue streams have potential to reach 50 per cent of total revenue by 2030, noting its combined targets total US$4.5-6.5-billion of untapped organic revenue potential. He also thinks its new US$300-million capex target and management commentary should "quash investor concerns of a potential clean sheet." "Management specified that it sees interesting opportunities for derivative aircraft investments (within US$300-million capex envelope) but not a clean sheet design," he said. "We view this as positive, as it is now clear that BBD will not be announcing any large, new multi-billion-dollar capital investment programs, which was one of investors' main concerns and an overhang on the stock/investor sentiment in recent years." Mr. Poirier now thinks the Montreal-based company's potential EBITDA and free cash flow generation is "understated in today's share price" and sees a bluesky scenario of reaching US$2.0-billion of FCF in 2030. "Assuming a 22-per-cent EBITDA margin in 2030, which we believe is a fair estimate given the greater mix weighting to aftermarket, defence and pre-owned (all three of these businesses generate accretive 20-per-cent-plus EBITDA margins) and given BBD's previous 2025 EBITDA margin target was 20 per cent (an additional 200 basis points of expansion over five years does not seem like that far of a stretch), we calculate a potential EBITDA contribution of US$2.860-billion in 2030," he said. "Stripping out the capex target of US$300-million as well as a fair assumption for cash interest and working capital investment, we derive potential FCF of US$1.960-billion in 2030. This implies a 16.8% CAGR [compound annual growth rate] vs the 2025 target of US$900-million, and total potential FCF of US$7.353-billlion from 2026-30. This amount of cash can be applied to various endeavours as we explore in the paragraph below. To conclude, placing our current valuation exit multiple of 8.6 times on our 2030 EBITDA assumption, and making some conservative assumptions for leverage and share buybacks, we calculate a potential target price of C$326, which implies a seven-year CAGR vs yesterday's close of 25.2 per cent. "While this blue-sky scenario should be taken with a grain of salt, we believe it demonstrates the deep level of optionality BBD management will have for cash deployment over the coming years. We do not believe this is accurately reflected in today's share price." After raising his revenue and earnings expectations for both 2024 and 2025, Mr. Poirier raised his target for Bombardier shares by $1 to $102, keeping a "buy" recommendation. The average on the Street is $81.27, according to LSEG data. Elsewhere, CIBC's Kevin Chiang upgraded Bombardier to "outperformer" from "neutral" and raised his target to $91 from $67. "Heading into BBD's Investor Day, there were two key questions we had facing the company (and ones we often heard from investors)," said Mr. Chiang. "First, what steps could BBD take to continue to improve the resiliency of its earnings stream through a full business jet cycle? Second, did the company need to increase its capital spend post-2025? BBD's presentation directly addressed these two questions/concerns. On the former, it is positioned to generate 50 per cent of its revenue from outside of its Manufacturing segment (i.e., growth in Aftermarket, Defense, Pre-owned) versus accounting for 31 per cent of revenue in 2023. We would also note that these other revenue opportunities have a higher EBITDA margin profile (20-plus per cent). On the latter, BBD was clear that its operational capex would remain in the $300-million range per year out to 2030. The significant cumulative FCF potential over the next five to six years puts BBD in a position to pursue additional opportunities to grow, as well as return cash to shareholders while maintaining a solid balance sheet. "Net-net, BBD's strategy should result in a more predictable revenue and cash flow stream aided by a healthy business jet environment and multi-year backlog. With greater clarity on BBD's FCF profile post-2025, which we view as a de-risking event ... we are upgrading the company." Others making changes include: * BMO's Fadi Chamoun to $95 from $85 with an "outperform" rating. "Bombardier reaffirmed and expressed a high degree of visibility/conviction in its F2025 financial targets. Management presented a path to another $2-4-billion of revenue growth opportunities over the medium term, primarily in above-average margin segments, such as Defense and Services. More importantly, BBD indicated that it does not contemplate investing in a clean sheet aircraft before 2030 and that investments will focus on upgrades/derivatives based on existing platforms, which we view as an important de-risking of future cash flow," said Mr. Chamoun. * Scotia's Konark Gupta to $90 from $83 with a "sector outperform" rating. "We found this year's investor day quite different from the prior ones as it was more about margin-accretive growth through 2030 that is not dependent on deliveries and contemplates ROIC-accretive investment opportunities while preserving liquidity," said Mr. Gupta. "Clearly, the story has changed significantly since the current management team came aboard in 2020, with FCF approaching $1.0-billion (high-teen yield) and leverage ratio nearing an investment grade rating. This is not the same BBD that many investors would remember from the 2000′s and 2010′s. Today's BBD is a stable, high-margin and FCF-generating business that is ready to show resilience through cycles and even reward shareholders with buybacks or dividends. The event boosted our confidence in margin and FCF outlook, which drives our target up ... If management can drive the business toward its full 2030 potential, we could envision a fair future valuation of $170 to $285 depending on top-line growth and margin, before any accretion from potential buybacks. In a steady state, we think BBD could potentially accumulate at least $4.0-$5.0-billion in dry powder over 2026-2030 to explore capital deployment opportunities." * RBC's James McGarragle to $99 from $95 with an "outperform" rating. "Investor Day 2024 highlighted 2030 growth will be accomplished by leveraging existing higher return platforms in Aftermarket services, Defense and CPO vs production growth, leading to a resilient operating model, which we see as primed for a re-rating," said Mr. McGarragle. "Key is revenue growth beyond 2025 will likely be largely organic, with upside potential from M&A and strategic investments. The company pointed to robust FCF conversion backstopped by $12-billion in tax attributes and a plan to return cash to shareholders post-2025. Our price target increases to $99, with upside potential to our 2030 scenario. BBD remains our top investment idea." * TD Cowen's Tim James to $105 from $104 with a "buy" rating. ===== While he thinks the "mixed" second-quarter results from CGI Inc. (GIB.A-T) "validates the resiliency" of its business model, RBC Dominion Securities analyst Paul Treiber warns its management's tone "suggests limited visibility to the timing and magnitude of a rebound in near-term organic growth and the reversal of industry headwinds." Shares of the Montreal-based information technology and business consulting services firm slipped 2 per cent on Wednesday after it reported quarterly revenue of $3.74-billion, up 1 per cent year-over-year but slightly below both the analyst's $3.77-billion estimate and the consensus projection of $3.81-billion. Driven by stronger margins, adjusted earnings per share rose 8 per cent to $1.97, exceeding Mr. Treiber's forecast by 4 cents and the Street by 2 cents despite lighter-than-anticipated bookings. Mr. Treiber thinks industry headwinds continue to weigh on organic growth, noting "managed services deals are taking longer to convert to revenue and reduced short-term discretionary spending, particularly in the financial services vertical, is impacting SI&C revenue." "Even though management suggested reduced clarity to the timing of a rebound (unlike its comments last quarter), we believe that organic growth may have troughed Q2 and may incrementally improve 2H, given: 1) year-over-year organic growth comparables are 400 basis points easier Q3; 2) the timing of Easter was a 70 basis points year-over-year headwind Q2, which will be a tailwind Q3; 3) backlog less than 12 months rose 5 per cent year-over-year; 4) CGI's pipeline is up 30 per cent year-over-year; and 5) several industry peers (e.g. Accenture, Capgemini) expect stronger growth 2H/CY24," he said. "Margins surprise to the upside, illustrating the resiliency of CGI's model. Adj. EBIT margins rose 60 basis points year-over-year to a near record 16.8 per cent due to CGI's cost optimization program to reduce SG&A expenses. The company plans new investments (AI, business development, and SI&C capacity), which reduces the uplift to 20 basis points 2H/FY24. CGI's improving revenue mix and AI productivity gains are likely long-term tailwinds to sustained margin expansion. We are raising our FY24 adj. EBIT margin forecast to 16.5 per cent from 16.3 previously." Following modest reductions to his revenue and earnings projections through 2025, Mr. Treiber cut his target for CGI shares to $163 from $170, keeping an "outperform" recommendation. The average is $161. "CGI has a track record of consistently creating shareholder value over the long-term (12-per-cent 10- year adj. EPS CAGR [compound annual growth rate])," he said. "CGI is trading at 17 times NTM [next 12-month] P/E, near the mid-point of its 5-year historical range (11-24 times), despite improved margins and revenue mix. We believe a rebound in organic growth and/or M&A may help improve sentiment." "Maintain Outperform, as valuation has reset lower, while CGI's build-and-buy model enables long-term resilient earnings growth." Elsewhere, TD Cowen's Daniel Chan upgraded CGI to "buy" from "hold" with a $160 target, down from $165. Target changes include: * BMO's Thanos Moschopoulos to $160 from $170 with an "outperform" rating. "We remain Outperform rated on CGI shares and have trimmed our estimates and target price following Q2/24 results, which were a hair light on revenue and a hair above on EPS. Cost control, and a growing IP mix, are contributing to strong margins—partially offsetting the EPS impact of softer organic revenue growth. We believe valuation remains attractive versus peers given CGI's earnings resilience, margin execution, and more defensive revenue mix (given a higher mix of public sector, managed services, and IP)," he said. * CIBC's Stephanie Price to $165 from $169 with an "outperformer" rating. ===== Desjardins Securities' Chris Li thinks the first-quarter results from Loblaw Companies Ltd. (L-T) reinforce its "consistent execution and strong position, supporting high earnings visibility which should sustain outperformance in the near term." Calling the release a "good start to the year," the equity analyst sees the Brampton, Ont.-based company, which owns stores including Loblaws, No Frills, Real Canadian Superstore and Shoppers Drug Mart, "well-positioned" to achieve the high end of management's 8-10-per-cent earnings per share target. "We believe this is largely reflected in the share price, with potential upside if L can deliver low double-digit growth," said Mr. Li. "Even as food inflation continues to moderate, L has levers to drive earnings growth, including shrink improvement (approximately 20 basis points expected this year, which we estimate should boost EPS growth by 3-4 per cent), increasing profit contribution from freight as a service (more than $100-million growing by double digits this year), organizational restructuring implemented last year, etc. L is also on track to repurchase 4 per cent of shares this year, supported by strong FCF. "While still early, the new CEO's focus on further value enhancement by leveraging L's scale to have offers across the entire food and drug network ('Hit of the Month') is resonating with customers. Other pilots include revamping the general merchandise section at Superstores (three test stores this year) and small-format hard discount stores (about 10 this year). At the same time, L is focused on growing market share through accelerating new store openings in both food and drug, with 40+ stores this year (just over half being Shoppers), as well as hard discount store conversions in Québec." On Wednesday, Loblaw shares rose 1.3 per cent following the "solid" results, which included adjusted earnings per share of $1.72, up 11 per cent year over year and matching Mr. Li's projection while 2 cents higher than the consensus forecast. Food same-store sales growth of 3.4 per cent and retail gross margin of a 0.3-per-cent year-over-year increase topped his estimates (2.3 per cent and 0.1 per cent, respectively). "The strong performance was aided by strength in L's discount banners, private label brands and PC Optimum offers," he said. "Management expects food SSSG in 2Q to be lower than in 1Q as L will be lapping a tougher comp. "Industry trends remains largely unchanged and the shift to discount is expected to continue. Customers continue to look for value through trade-downs, shopping private label and shopping at discount stores. There is no notable step-up in competitive intensity, and promotional penetration remains elevated. The shift to discount is expected to continue for the next few years (trends seen globally), although at a slower pace. In 1Q, hard discount banners outperformed conventional stores although tonnage grew in both." Expecting its momentum to continue in the current fiscal year, Mr. Li raised his 2024 EPS projection by a penny to $8.50 while trimmed his 2025 target by 1 cent to $9.26. Mr. Li maintained a "hold" recommendation for Loblaw shares, pointing to a limited potential return to his $157 target. The average is $161.67. "We believe this [outperformance] is largely reflected in its premium valuation (17.2 times forward P/E vs 15.4 times/10.7 times for MRU/EMP [Metro Inc. and Empire Co. Ltd.])," he said. "We expect share price appreciation to largely track EPS growth, with upside if macros deteriorate or L can show a path to low-double-digit EPS growth. We continue to prefer WN [George Weston Ltd.] given its high holdco discount of 19 per cent vs our fair value of 10 per cent." Analysts making target adjustments include: * Scotia's George Doumet to $161 from $148.27 with a "sector perform" rating. "Loblaw reported (another) solid quarter," said Mr. Doumet. "This time around, it was driven by strong performance in food (which was a bit soft last quarter), consistent strength in Rx and modestly lower results at the front store. GM performance was better than expected, while SG&A inflation came in higher. "All, in all, a good quarter - and solid line of sight to attaining (and perhaps surpassing) the HSD EPS growth target for this year (we are looking for 10-per-cent growth in adj. EPS on 4 per cent in buybacks). That said, we see limited share price upside given valuation with shares trading at 16 times PE F25e (premium to MRU) and a 4.6-per-cent FCF yield." * CIBC's Mark Petrie to $171 from $159 with an "outperformer" rating. "Q1 marks a strong start to the year with food sales growth leading the way. SG&A was higher than expected but should normalize in the coming quarters, while sales mix and lower shrink are clear GM% tailwinds. The outlook for high-single-digit EPS growth appears increasingly conservative in light of food gains, margin discipline and pharmacy growth. We continue to believe L is the best positioned grocer and this supports multiple expansion," said Mr. Petrie. * National Bank's Vishal Shreedhar to $159 from $156 with an "outperform" rating. ===== Cameco Corp. (CCO-T) is "executing well while uranium stays favourable," according to RBC Dominion Securities analyst Andrew Wong, who sees a tight market featuring growing demand and supply-side risks. "Uranium prices remain elevated with spot hovering above $90/lb and term prices at $75-80/lb for base-escalated contracts or market-related contracts with floors and ceilings around $75/lb and more than $100/lb, respectively," he said. "We see demand growing with a recommitment to nuclear across all regions and need for increased feed into enrichment as tails assays rise. Meanwhile, supply-side risks remain with geopolitical risks in Niger, logistics constraints in Kazakhstan, ramp-up risks for re-start projects, and no significant greenfield production available within the next 3-5 years. We maintain our forecast for prices in the $80-100/lb range through 2029, and a long-term price at $75/lb with potential upside given supply-side risks. "In terms of catalysts, we expect a U.S. ban on Russian uranium imports shortly, which may add to current market tightness and raise the risk of a retaliatory Russian ban on exports to the U.S. (see our initial take and follow-up). Next, Kazakhstan producer Kazatomprom plans to provide an operations update in late August, which may see the company cut 2025 production targets due to continued challenges sourcing sulphuric acid." In a report released Thursday, a day after its shares jumped 2.8 per cent on the U.S. Senate approving a bill to ban Russian uranium imports, Mr. Wong said the Saskatoon-based company's operations continue to "execute well" and are gaining volume to its contract portfolio. "We think Cameco had an operationally strong Q1/24, with attributable production from McArthur and Cigar better than we expected and on track for nameplate production in 2024," he said. "We view the quarterly variation in deliveries and seasonality in Westinghouse as very normal, and we have high confidence that the company will meet its 2024 sales guidance. Additionally, Cameco continues to add volumes to the contract portfolio at higher prices, resulting in better price realizations long-term. Seeing its valuation as "still reasonable" and maintaining his "outperform" recommendation, he raised his target for Cameco shares to $75 from $70 after increasing his earnings expectations through 2026. The average target on the Street is $74.88. "We believe the company is well positioned to benefit from a renewed focus on nuclear energy and a tightening uranium market, especially as a Western-based producer in a market shift toward security of supply," said Mr. Wong. "Additionally, we think Cameco has the right mix of assets to meet the coming market needs: proven uranium production with upside, conversion capacity, potential long-term enrichment technology, and nuclear services through Westinghouse." "We think Cameco shares remain reasonably valued with P/NAV at 1.3 times (using our $75/lb long-term price), compared to a historical range of 0.5-2.0 times, and EV/EBITDA on 2025 consensus at 15 times, which compares well as an industrials-type valuation given that 35-40 per cent of the business is Westinghouse and Fuel Services while uranium segment sales are based on a robust contract portfolio." ===== Ahead of earnings season for Canada's technology sector, Scotia Capital analyst Kevin Krishnaratne sees Shopify Inc. (SHOP-N, SHOP-T) "benefiting from AI on both the top (new AI-based tools that can drive merchant store success and GMV higher) and bottom line (efficiencies in cost structure)." "Following a doubling in the stock in 2023, shares of SHOP are down almost 10 per cent so far in 2024," he said. "Recall how following a Q4 beat reported in February, SHOP traded lower 10 per cent on the back of Q1 guidance that called for a step down in FCF margins ('high single-digits percentage of revenue' vs. Street expectations up 10 per cent) and just modestly higher revenue growth expectations ('low-twenties' growth vs. consensus 20 per cent). We believe management's decision to step up S&M efforts to capitalize on opportunities in offline/POS are the right move, and think there could be upside to our 2024 revenue growth estimates 25 per cent (ex-SFN) and FCF margin (14 per cent) as the year progresses, all else equal. While we maintain our SP rating with the stock now trading at 15.1 times CY25 GP (more than 2 times peers), we've previously suggested SHOP is a name that should be a core holding given its position as a category leader in omnichannel Retail and that we'd be opportunistic adding to that position on pullbacks." "Within our coverage, SHOP has been of the few companies able to deliver outsized profit beats in recent quarters alongside top-line revenue surprises. We believe this is a theme that could again present itself when the company reports Q1, where we currently model 20-per-cent year-over-year GMV growth, 23-per-cent revenue growth, and FCF of $155-million (8.4-per-cent margin), all broadly in line with the Street. Retail and E-Commerce trends have remained strong and could provide a tailwind to SHOP's GMV. Recent e-Commerce trends point to strength vs. broader retail ... Our own Proprietary Spending Tracker for Canada (could provide read-throughs for U.S.) also indicated strength in e-commerce trends. Meanwhile, we see opportunities for upside to profits on disciplined spending and the leveraging of AI across its opex base. Recent media reports suggest the company has been experimenting with the use of AI within its customer support teams over the past year, which could lead to further opportunities for cost savings in 2024 and beyond" Mr. Krishnaratne raised his target for Shopify shares to US$80 to US$70, keeping a "sector perform" recommendation. The average on the Street is US$83.01. "While we are SP-rated given the valuation at 15.1 times CY25 GP (2 times peers), revenue upside on better e-commerce trends (being seen industry-wide) and a profit beat (has shown success in some recent Q's on FCF/OI) could lead shares to inch higher," the analyst said. On the sector as a whole, he said: "Recent global tech earnings results have suggested businesses exposed to the AI theme that have also demonstrated profit beats are being rewarded. While we see multiple opportunities across our Canadian Tech coverage, with many names trading at attractive valuations, we're calling out DCBO, SHOP, and OTEX as stocks that we think can outperform on the back of their March Q results given elements of AI directly impacting their businesses and their recent positive track records related to profitability metrics." ===== Touting the potential from its "dominating" land position in Saskatchewan's "prolific" Athabasca Basin, Eight Capital analyst Puneet Singh initiated coverage of Vancouver-based uranium company Atha Energy Corp. (SASK-X) with a "buy" recommendation. "Explorers with recent discoveries in the Athabasca Basin were up 60 per cent on average on the day the hole was announced, highlighting the potential for SASK to provide torque to investors through exploration," he said. "Given its commanding land position (8.1 million acres across its portfolio) and total mineral inventory (57.8Mlbs) we believe a) there isn't an actual true peer comparison for Atha and b) Atha will likely become a takeout candidate. Larger producers that have curtailed exploration budgets for years or developers looking for the next leg of growth could be possible suitors. Speaking with investors, finding a quality uranium exploration story to invest in is few and far between. SASK is unique in that it's well capitalized, has decent trading liquidity, has tangible pounds underpinning its valuation, and is well funded ($60-million in cash) to explore its properties." "There is no other explorer that compares to Atha in terms of the scale of land in the Athabasca. Atha is in the midst of finishing 17 EM surveys across its properties. Additionally, the Company owns carried interest land with NexGen (NXE-T, Buy, Target $21.00) and IsoEnergy (ISO-V, Buy, Target $7.50). Through its merger with 92 Energy, Atha acquired the Gemini project, which is an unconformity-related basement hosted uranium discovery on the eastern side of the Athabasca Basin. Due to the discovery of a parallel structure, comparisons have been drawn between the project and Cameco's (CCO-T, Buy, Target $80.00) basement-hosted past-producing (200Mlbs) Rabbit Lake project." In a report title Hunting for New Uranium Discoveries While Investors are Hunting for Quality Uranium Explorers, Mr. Singh thinks "underpinning value" for the company is its ownership of the Angilak project in Nunavut, which was acquired through its merger with Latitude Uranium. "The project is located in the same region as Agnico's (AEM-T, Buy, Target $105.00) producing gold mines in Nunavut," he said. "While less well known to investors, the Thelon Basin carries many geologic similarities to the Athabasca Basin; it just hasn't been drilled out to the same extent. Atha owns 2.9 million acres of land in the Thelon, including land surrounding Orano's (Private) Kiggavik (127Mlbs at 0.55-per-cent U3O8) deposit. Atha plans to drill 10,000 metres at Angilak beginning in Jun/24." Currently the lone analyst covering the company, he set a target of $3 per share, representing upside of 334.8 per cent from its Wednesday closing price. ===== In other analyst actions: * Raymond James' Brad Sturges lowered his Allied Properties REIT (AP.UN-T) target to $19 from $19.25 with a "market perform" rating. Other changes include: Canaccord Genuity's Mark Rothschild to $18.75 from $20.25 with a "buy" rating and Scotia's Mario Saric to $21.25 from $21.75 with a "sector outperform" rating. The average is $19.94. "Despite Allied's public confidence provided on its 1Q24 call that it believes that leasing activity has reached an inflection point, we maintain our 'wait and see' stance as it relates to how much of Allied's positive leasing indicators will ultimately translate into stabilization and a recovery in Allied's average occupancy rates," said Mr. Sturges. "While Allied remains committed to its distribution rate, we believe concerns over Allied's distribution policy may act as a near-term overhang in its unit price." * Evercore ISI's Vijay Kumar reduced his target for Bausch + Lomb Corp. (BLCO-N, BLCO-T) to US$15 from US$17 with an "in line" rating. The average is US$18.50. * CIBC's Hamir Patel reduced his Canfor Corp. (CFP-T) target by $1 to $21 with an "outperformer" rating. The average is $21.67. ".Although profitability will likely remain somewhat depressed this year given weak lumber prices and continued cost pressure in British Columbia (home to over 25 per cent of CFP's lumber capacity and 100 per cent of its pulp capacity), we believe Canfor is well positioned to benefit from favorable long-term trends for R&R," he said. * RBC's Maurice Choy cut his Capital Power Corp. (CPX-T) target to $39 from $41 with a "sector perform" rating. Other changes include: BMO's Ben Pham to $38 from $40 with a "market perform" rating, Desjardins Securities' Brent Stadler to $48 from $49 with a "buy" rating, Scotia's Robert Hope to $40 from $45 with a "sector perform" rating, National Bank's Patrick Kenny to $43 from $45 with an "outperform" rating and CIBC's Mark Jarvi to $39 from $40 with a "neutral" rating. The average is $41.91. "The milder winter and outages related to the repowering project weighed on results, with a more muted impact on cash flows as the repowerings provide favourable tax benefits," said Mr. Stadler. "After updating our model for the net impact of capex updates, we reduced our target modestly ... CPX is hosting its investor day on May 8 and we expect the focus will be on the steeper load growth curve and demand/need for reliability. We see upside to the story as we move further into the reliability era." * RBC's Greg Pardy raised his Cenovus Energy Inc. (CVE-T) target to $33 from $32 with an "outperform" rating, while TD Cowen's Menno Hulshof increased his target to $32 from $30 with a "buy" rating. The average is $33.21. "Our constructive stance towards Cenovus reflects its capable leadership team, strengthened balance sheet, improving downstream operating performance and rising shareholder returns on the horizon. The company expects to achieve its $4.0 billion net debt target sometime this summer that will unlock 100-per-cent shareholder returns," said Mr. Pardy. * CIBC's Dean Wilkinson lowered his First Capital REIT (FCR.UN-T) target to $18 from $19 with an "outperformer" rating, while RBC's Pammi Bir cut his target to $18 from $19 with an "outperform" recommendation. The average is $17.72. "Post a largely in line Q1 print, we remain constructive on FCR. In the face of a decelerating economy, we expect the REIT's everyday needs portfolio to remain operationally resilient," said Mr. Bir. "Indeed, SP NOI is off to a better-than-anticipated start, with momentum set to build through 2025 on the back of strong leasing. Layering on further expected progress on portfolio optimization, a line of sight to lower leverage, and a heavily discounted valuation, we maintain our Outperform rating." * CIBC's Mark Jarvi raised his Fortis Inc. (FTS-T) target to $57 from $56, remaining below the $57.80 average, with a "neutral" rating, while BMO's Ben Pham moved his target to $58.50 from $58 with a "market perform" recommendation. "The Q1/24 results highlight that EPS growth should sustain as regulatory lag eases and solid project execution on the $25-billion growth backlog advances. To be sure, uncertainties on interest rates and regulatory proceedings (i.e Iowa ROFR) persist, but USD/CAD F/X and capex trends are in FTS's favor. As such, we remain comfortable holding the shares especially given 99-per-cent regulated assets limiting EPS downside potential," said Mr. Pham. * Canaccord Genuity's Luke Hannan increased his target for Gildan Activewear Inc. (GIL-N, GIL-T) to US$43 from US$42 with a "buy" rating. The average is $41.36. "We came away from the [post second-quarter results] conference call incrementally positive," said Mr. Hannan. "The acceleration in POS growth in Q2/24, against a broader market that remains soft, implies Gildan continues to capture market share across key categories. Combined with continued raw material/manufacturing cost tailwinds and the resumption of share repurchases, we continue to believe Gildan remains well-positioned to deliver attractive growth over the course of our forecast period. We recognize the current boardroom drama is likely to keep investors on the sidelines over the near term; that said, we believe it nonetheless presents a compelling buying opportunity for longer-term investors, in our view." * National Bank's Gabriel Dechaine raised his Great-West Lifeco Inc. (GWO-T) target to $43 from $42 with a "sector perform" rating. The average is $44.22. * RBC's Pammi Bir cut his Morguard North American Residential REIT (MRG.UN-T) target to $19 from $20 with an "outperform" rating. The average is $20.33. * BMO's John Gibson cut his North American Construction Group Ltd. (NOA-T) to $37 from $39, below the $44 average, with an "outperform" rating. * CIBC's Sumayya Syed trimmed her Slate Grocery REIT (SGR.UN-T) target to US$9.50 from US$9.75 with a "neutral" rating, while Scotia's Himanshu Gupta lowered his target to US$9 from US$9.50 with a "sector perform" rating. The average is US$9.85. "It was yet another active quarter for SGR on the leasing front and rental spreads," said Mr. Gupta. "Fundamentals remain attractive for grocery anchored open air centers due to strong leasing demand and muted new supply. That said, we still think there's more work to be done on the balance sheet as SGR's 55 per cent of total debt is due in 2024 & 2025, and leverage remains elevated at 56 per cent. "We continue to think that management is committed to maintain the distribution in the near-term; as such, we don't expect a cut anytime soon. SGR's distribution yield is high at 10.8 per cent (highest in our coverage), albeit with a higher 2024 payout ratio of 108 per cent." * Scotia's Michael Doumet bumped his Stantec Inc. (STN-T) target to $120 from $119 with a "sector perform" rating, while Stifel's Ian Gillies moved his target to $132 from $130 with a "buy" rating.. The average is $124.36. "STN closed its third transaction so far in 2024; Following the addition of ZETCON (645 employees) and Morrison Hershfield (1,150 employees), STN announced the addition of Hydrock (950 employees)," Mr. Doumet said. "Hydrock is expected to expand STN's UK headcount by more than 30 per cent. "Collectively, we estimate STN paid $635 million for all three transactions — with the three contributing approximately 9 per cent and 8 per cent revenue and EBITDA growth vs. 2023 (pro forma). While only four months into 2024, the year is shaping up to be the busiest for M&A since 2021, when STN acquired Cardno (we note the acquired firms in 2024 added the same number of employees as Cardno). Post-close, we estimate a 2Q net debt to EBITDA of 1.7 times and believe STN can debt-fund M&A in excess of $1 billion in the NTM without exceeding the upper-end of its leverage target (of 2.0 times). We expect STN to pursue additional tuck-in transactions in 2024." * Canaccord Genuity's Mike Mueller raised his Tourmaline Oil Corp. (TOU-T) target to $73.50 from $72.50 with a "buy" rating, while CIBC's Jamie Kubik increased his target to $80 from $77.50 with an "outperformer" rating. The average is $77.34. "[Wednesday] after market, TOU reported Q1/24 results ahead of expectations and announced another increase to its base dividend alongside a special dividend. Q1/24 production of 592.1 mboe/d was in line with both our forecast and consensus at 589.2 mboe/d and 591.5 mboe/d, respectively, while CFPS of $2.48 was modestly ahead of expectations of $2.35 (CGe) and $2.38 (consensus)," said Mr. Mueller. "The company also announced it has closed on its non-core Duvernay disposition where it sold ~1,600-1,800 boe/d of current production for gross proceeds of $53.1M. Recall that TOU originally acquired these assets through its acquisition of Bonavista last November. "Following suit with its Q4 release in March, TOU announced another $0.50/share special dividend (payable May 2024) and another 7-per-cent base quarterly dividend increase to $0.32/share (1.9-per-cent yield annualized). While the size of the special dividends has decreased (following the shift in commodity prices), this demonstrates why the company went towards this model in the first place. The most recent increase to the base dividend marks the fourteenth increase since 2018 with no cuts since implementing it, providing a ratable dividend with upside via the specials."