Monday's analyst upgrades and downhairs


Within the market's roundup of some of today's key analyst activities

Altria Group Inc.(MO-N) $ 2.4-billion equity investment Cronos Group Inc. (CRON-T) provides "overall legitimacy" to the Cannabis industry, according to Canakanord Genuity Analyst Matt Bottomley, which seeks to deal with a positive catalyst for this sector.

"As Constellation's investment in Canopy, the management of Kronos has indicated that Ultra's solution will be utilized to accelerate its global growth initiatives, including its distribution slot, sorting and R & D / product formulation," said Mr. Bottomless. "The company also believes that Ultra will deliver its expertise with large-scale manufacturing, automation and supply chain management.

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"As a society that is operational in the highly regulated tobacco industry, we believe Altria has a valuable regulatory and compliance experience that could end up being a key competitive advantage for cronos, as it competes with other LPs for what seems to be a growing trend of international Opportunities. "

Mentioning a "stop" rating for Cronos shares, Mr. Bottlley attracted his target price to $ 17 out of $ 9. The average target on the street was $ 15.92, according to Bloomberg data.

"Cronos currently trades at 32.2 times our revised calendar 2020 enterprise value-to-EBDDDA compared with its peers at 12.6 times and canopy growth corps at 21.3 times (Canada's largest LP, which also secured a significant capital injection of a global strategic player) , "He said. "Although we believe the trade following Cements The favorable positioning of the industry, based on a sizeable gap in its relative valuation over its peers, we would stay on the sidelines at the current level and maintain our stop recommendation.

Otherwise, Cormark Securities analyst Jesse Pytlak upgraded Cronos to "speculative buy" from "market perform" with a target of $ 17, up from $ 10.


Though BRP Inc. (DOO-T) held its earnings guidance despite slightly higher sales growth, Citi analyst Gregory Badishkanian thinks the recreational vehicle manufacturer's underlying momentum appears solid.

"BRP has reported another strong quarter and has increased its full-year outlook," he said in a research paper released Monday. "Retail sales momentum slowed a bit but was still very strong (up 6 per cent overall or 16 percent of ex-snowmobiles) as the company gained share in almost every category. [side-by-side] The performance was particularly strong and increased in 20 weeks by the industry's up to one-digit digits (from August to October). "

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Despite the market strength and rising its earnings estimates for Fiscal 2020 and 2021, Mr. Batikanian lower its target price for Shares of Quebec-based BRP to $ 48 from $ 67 based on a change to his valuation. The average target is $ 66.46.

"We believe valuation based on a relative P / E compared to conference companies is applicable to DOO," he said. "Over the last five years, the other conference companies have traded, in average, between 10.6 times and 19.6 times with a median p / e of 15.9 times .We think BRP deserves to trade in a 15-per-cent premium to be peered (Earlier 50 per cent) We reduce our premiums because of questions about the sustainability of the latest moment, year-to-year comparisons (avoiding growth of 16 percent over the last 3 kV), raising inventory levels that increase the pressure on the retailer, Demand to materialize (up 9 percent year-over-year In F & # 39; k and up 7 per cent yo in 2k) and concerns about late cycle economics .One is also seeing some increased competition of competitors who are rolling out new products that could threaten the capability of the The company has also stopped increased execution risk following recent acquisitions in the boat segment and they are considerably increasing their SCS capacity. Applying a 15-per-cent premium to the current peers group of 11.5 times yields a target of 13.2 times (before 18.8 times). "

He considered a "buy" rating.


The macro set-up for Canadian energy companies has improved, according to analysts at Tudor Pickering, who shifted to terrorist attacks for large Copper Producers.

Analyst Matthew Murphy upgraded Cenovus Energy Inc. (CVE-T, CVE-N) to "buy" from "stop." The firm has designated the company's top pick in this sector.

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Aaron Swanson raised ARC Resources Ltd. (ARX-T) to "buy" from "stop."

Conversely, Mr. Murphy downgraded Imperial Oil Ltd. (IMO-T) to "stop" from "buy," while Mr. Swanson lowered Paramount Resources Ltd. (POU-T) to "stop" from "buy."


Following his meeting with his team last week, Citi analyst Wendy Nicholson thinks Procter & Gamble Co. (PG-N) is now "in a better place today than it was in years."

With the "strong and stable" management team, the end of the negative impact of product line exits and a "stronger" portfolio following "meaningful" divestitures, Ms. Nikolson said: "We also believe that PG has settled in a set of more Regular and much improved innovation, more disciplined spending, and more effective marketing. Or we think this is not a single home run product or two (as was the case in the past), but by many singles and doubles, Manifested generation L The fact that nine of PG's reportable segments increased year-over-year in Fiscal 1Q19. All in all, we believe that PG is now a more focused, more balanced and overall strong company today, and our confidence in both the broad and the quality of the drivers of PG's growth is high. "

"Bottom line, we really expect 1K to present a high-water market for PG in 2019, and we expect organic sales growth to slow in 2k given a hundred year-over-year comp, and we fear the competitive environment may aggravate In Financial 2H19 (especially in Grooming), we also fear that there may be some lumpiness in PG's growth on a quarter-to-quarter basis based on the price increases that PG is implementing its business (both developed and emerging Markets), as some retailers are / Or consumers' buying overalls involves the price increase, or as PG can leave some market share if competitors do not follow the PG's lead. Sales), we think it is prudent to predict total organic sales growth for FY 19 at 2.6 per cent, basically at the midpoint of PG's predicted range. That is, as Ziy margin comps actually get easier, and as PG benefits from both some low commodity costs and the boost of some price increases, we expect the balance of PG's earnings to improve as the fiscal year goes on.

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With a "buy" rating for the stock, she has her goal to US. It. $ 104 from US $ It. $ 99. The average on the street is $ 89.30.


Previewing its 2019 Financial and Operational Outlook Call, which is scheduled for Thursday, Industrial Alliance Securities Analyst Elias Foscola has he expects AltaGas Ltd.(ALA-T) dividend to be reduced by 30-50 per cent.

"The upcoming Dividend reduction is based on Q3 results," he said. "We believe the intelligence of the dividend reduction is primarily driven by reducing dilution caused by the DRIP plans and less driven by a method to fund growth rates and reduce debt." The reason for our previous statement is that the net extracts from the current dividend And DRIP design (regular and premium) as opposed to a reduced dividend and regular drip design is not material (outflow difference at $ 50 million a year).

Mr. Foscolos also shows the sale of its 55-centimeter stake in NW hydro for $ 1,4-billion, followed by divestiture of other non-high growth assets in the first half of 2019. He also designed Total Growth Capital for 2019 of $ 1.5-billion with EBITDA guidance of $ 1,3-billion.

After adjusting its financial model for the company, Mr. Foscolos seized his target by a lotion to $ 21, or 4 cents less than the consensus, with a "buy" rating (unchanged).


Echelon Wealth Partners Analyst Amr Ezzat Initiated Coverage Of Alithya Group Inc. (ALYA-T), a Toronto-based IT company that started trading on the cats on November. 2 After the completion of a reverse control of Edgewater Technology Inc. With a "buy" rating.

"The IT Services industry is in the midst of a paradigm shift, and we believe that digital transformation (DX) provides a significant opportunity for the services of the digital cycle services (cloud, application services, mobility, great data analysis, Security) All industries and digital disruptors are forcing incumbents to adapt or face the risk of getting ammonia, "he said. "We also believe that smaller, more nimble players with specialized offerings are able to benefit more than their largest counterparts in providing technology-driven innovation and capitalization on the conversion of traditional to digital solutions, speed and agility are increasingly becoming key success factors For service providers according to DXC Technology (DXC-US, NR), next-generation solutions are growing at a CAGR of 20% + by 2021 (versus flat growth for traditional solutions).

"In addition to the possible inorganic growth opportunities, ALYA has multiple levers to draw the best-in-class organic peak line growth: We expect the Company to provide the above-average sales growth based on its above-mentioned world trends and Cross-selling opportunities with its recently closed acquirer acquisition. Namely, we expect the Company to grow sales at a 5-year custard of 18.5 per cent by our forecast period. "

Mr. Azzat has set a goal of $ 7 per share, which exceeds the censorship by 12 cents.


In other analysts' actions:

TD Securities Analyst Mario Mendonka upgraded Royal Bank of Canada (RY-T, RY-N) to "buy" from "stop" with a goal of $ 115. The average goal on the street is $ 110.48.

National Bank Financial Analyst Dan Penh Downgraded Bonterra Energy Corp. (BNE-T) to "make the sector" of "outperform" and lower its target to $ 10.25 from $ 21. The average is $ 13.66.

National Bank's Travis Wood upgraded ARC Resources Ltd. (ARX-T) to "outperform" from "Sector Perform" with a $ 11 target, down from $ 13.50 and lower than the Consensus of $ 16.25.

Cormark Securities initiated coverage of Strad Energy Services Ltd. (SDY-T) with a "buy" rating and $ 2.50 target. The average is $ 2.18.

Cormark also initiated coverage of Prairie Provident Resources Inc. (PPR-H) with a "buy" rating and target of 60 cents. The average is $ 1.08.

More to come

With files from Bloomberg News

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