As we approach mid-year on the stock market, La Presse updates the ranking of analysts’ investment recommendations among companies headquartered in Quebec, which have more than 500 million in market capitalization and which are followed by at least five analysts.
This list is made up of two segments. The former ranks companies based on the opinions of analysts who recommend buying rather than selling or holding. The second ranks companies according to the expected gain in value of their shares within a year. This expected return is calculated based on the average target price within a year assigned to each company by the analysts covering them specifically.
Recent analyst reviews
Doug Young, Desjardins Capital Markets (Toronto)
“In its recent first quarter results, Industrial Alliance posted basic earnings per share (EPS) below the consensus estimate among analysts and investors. Weaker results from its merchant services in the United States and higher expenses stemming from new accounting standards regarding mortality data among policyholders were the main causes of this decline in basic EPS. This situation will probably persist for a few quarters. Therefore, I have lowered my EPS estimate and revised my target stock price to $95 from $98, but I maintain a Buy recommendation. »
Lemar Persaud, Cormark Securities (Toronto)
“I consider that Industrial Alliance’s prudent approach to financial provisioning in insurance, the growth potential of its dealer services activities in the United States, as well as its internal capacity to generate stable capital justify my outlook. positive and my recommendation to buy the shares. »
Recent analyst reviews
Zachary Evershed, National Bank Financial (Montreal)
“Savaria recently reported strong first quarter results driven by revenue outperformance from its accessibility products division and record profit margin from its patient care products division. As a result, my target Savaria share price remains unchanged at $18.50 or 10 times full year expected earnings per share. Also, I reiterate my outperformance rating on the stock market because I am confident in Savaria’s ability to increase its market share in a market supported by positive long-term momentum in accessibility and patient care products. . »
Justin Keywood, Stifel Nicolaus Canada (Toronto)
“Savaria’s recent quarterly results were generally above expectations, with healthy organic revenue growth. The company continues to show resilience and strength in the accessibility and mobility market, while price increases remain relatively difficult to implement. Savaria’s new plant in Mexico will help strengthen its supply chain, which could improve its profit margins. In this regard, Savaria aims to reach 1 billion in sales by 2025, which it is on track to achieve, with an operating profit margin of 20%. »
Recent analyst reviews
Don DeMarco, National Bank Financial (Toronto)
“Aya is a silver producer whose dominant asset is its 85% controlling interest in the important silver mine of Zgounder, Morocco. In its recent quarterly results, Aya significantly beat expectations thanks to much better than expected silver production at Zgounder. Therefore, I have updated my expectations to 2023, betting on a slight increase in production levels. I now estimate its silver production at 1.83 million ounces at a total cash cost of US$14.47 per ounce, while Aya’s forecast is in the range of 1.7 to 1, 9 million ounces at a total cash cost of US$14.40 per ounce. »
John Sclodnick, Desjardins Capital Markets (Toronto)
“Aya’s recent quarterly results exceeded expectations, highlighted by strong silver mining and production rates (at the Zgounder mine, Morocco). With her unparalleled growth profile, I expect Aya to be valued on the stock exchange at a higher level among silver producers. For the year 2023, I model its silver production at 1.87 million ounces at a cash cost of US$15.31 per ounce, while analyst consensus is 1.79 million ounces at a cost of US$14.68 per ounce. On the stock market, Aya’s shares trade at a multiple of 1.13 times net asset value, compared to 1.02 times among its silver-producing peers. I continue to set my target price at a multiple of 1.5 times its net asset value. »
Recent analyst reviews
Nicolas Dion, Cormark Securities (Toronto)
“Osisko Gold Royalties (OR) benefits from a diversified portfolio of interests in precious metal producing assets primarily located in Canada, including the significant Malartic mine [in Quebec]. I think that investors underestimate the flexibility of managing this equity portfolio according to the evolution of the development priorities of each asset. Because in addition to great development potential, the flagship assets in OR’s current portfolio, such as the Malartic mine, continue to improve. Meanwhile, on the stock market, (GOLD) stocks are trading at a multiple of approximately 1.51 times net asset value, which is far below the comparable multiple among large precious metal royalty firms. Therefore, I slightly increased my target price from $25 to $26 per share. »
Shane Nagle, National Bank Financial (Toronto)
“I reiterate my outperformance rating on Osisko (OR) as its shares trade at a multiple of 1.35x net asset value, which is below the average multiple of 2.71x among well-known royalty companies. established. GOLD remains my first choice in the precious metals royalty space given its strong growth prospects driven by expansion projects in its major producing assets, including Canadian Malartic (Quebec), Eagle (Yukon), Island Gold (Ontario) and Mantos Blancos (Chile). Furthermore, with the continued consolidation expected in the industry, I underline the attractiveness of the portfolio of assets at OR both from a quality perspective and their potential for higher valuation. »
Recent analyst reviews
Chris Li, Desjardins Capital Markets (Toronto)
“Recent quarterly earnings at Gildan were lower than expected primarily due to an unfavorable combination of uncertainties in the apparel market and reduced shipments in hoodies. Despite these near-term challenges, Gildan reiterated its outlook for 2023, supported by improving business trends at the point of sale and contract customer wins. On the stock market, I expect Gildan shares to remain under some pressure pending better business visibility with second quarter results. I maintain a positive long-term view toward Gildan’s stock. I think their recent valuation — at 11.2 times expected earnings per share versus its mid-term average of 15 to 16 times — largely reflects near-term business challenges. »
Vishal Shreedhar, National Bank Financial (Toronto)
“During its recent quarterly results, which were weaker than expected due to tight profit margins, Gildan noted continued improvement in business trends at retail outlets. As well, Gildan expects a rebound in the high-margin hoodie market as its distributors’ inventories remain in favorable balance. I believe recent adverse trends have bottomed out at Gildan, and improvements will continue through 2023. Meanwhile, its stock market valuation remains depressed, in my view. Gildan shares trade at a multiple of 10 times future earnings per share (EPS), compared to the five-year average of 16.7 times. »
When they make an investment recommendation about a company, financial analysts also establish a target price within a year for its shares on the stock market.
Of the companies headquartered in Quebec, which ones have the highest earning potential within a year, from the perspective of analysts? La Presse used the average of the analysts’ target prices for each company and calculated the spread with the recent stock price listed on the stock exchange. Here’s a look at the top five companies that weren’t featured on the previous tab.
Recent analyst reviews
David Weiss, Scotia Capital (Toronto)
“Coveo recently announced that it is adding new artificial intelligence (AI) language solutions technology for its customers, which is the ability to understand and generate human language responses similar to ChatGPT. Considering the high level of interest in applications derived from AI technology, and the considerable investments by large companies for this purpose, I believe that Coveo’s evolution towards AI solutions should help it maintain its competitive and technological advantage. This recent announcement from Coveo reinforces my confidence in its ability to follow, if not even outpace, its competitors. »
Richard Tse, National Bank Financial (Toronto)
“Coveo’s latest quarterly results and business outlook were well ahead of my expectations. I continue to like Coveo for its strong fundamentals and competitive positioning in an industry (artificial intelligence) that is enjoying a favorable push in a powerful ecosystem that advocates application integration with some of the most established and prolific in this market. Therefore, I reiterate a stock market “outperform” rating and target price of $11 per share for Coveo. »
Recent analyst reviews
Darrin Peller, Wolfe Research (New York)
“During its recent quarterly results, Nuvei reiterated its financial guidance for the full fiscal year 2023, but it lowered its short-term guidance for the second quarter. This anticipated decline in the second quarter therefore implies a reacceleration of Nuvei’s business in the second half of the year to achieve its objectives. I see this as achievable given the growth of its new customer base, the continued expansion of the service portfolio among its existing customers, as well as significant upcoming [service] implementations that could benefit the company’s revenues. second half of the year. In the meantime, I view the recent decline in Nuvei’s stock price as a buying opportunity in a company that continues to grow ahead of its peers in the fintech [financial technology] market. »
Richard Tse, National Bank Financial (Toronto)
“Despite strong first quarter results, Nuvei shares suffered a stock market decline after its management downgraded its revenue forecast for the next quarter, before growth reaccelerated in the second half of the year. ‘exercise. But from my perspective, analysis of recent earnings and outlook at Nuvei suggests that this pullback in stock prices represents an opportunity for investors. In my view, the additional market gains and synergies from recent acquisitions support the thesis of a re-acceleration in Nuvei’s growth profile. »
Recent analyst reviews
Richard Tse, National Bank Financial (Toronto)
“Lightspeed recently reported strong year-end results relative to analyst expectations. But like many fintech companies, its business forecast update fell short of expectations. Lightspeed withdrew its target of 35% to 40% annualized growth in e-commerce subscription and transaction revenue. For Lightspeed stock investors, it represents another near-term business turn that, after multiple turns in recent years, has prompted a negative review of its stock market valuation. Lightspeed’s challenge is to reassure investors about its core platform’s ability to add new merchant customers as it undertakes a push to add electronic payment systems. »
Martin Toner, ATB Capital Markets (Toronto)
“In its most recent business outlook, Lightspeed management expressed caution regarding economic conditions and its impact on consumer spending that is processed in its retail services. Lightspeed still expects to end its 2024 fiscal year which begins with a break-even adjusted operating profit (EBITDA), including costs related to the deployment of its point-of-sale and electronic payments platform. On the revenue side, Lightspeed expects renewed growth in its 2024 fiscal year. However, the benefits of greater market penetration will not be fully realized until 2025, and even beyond. For my part, if it can improve its profit margins, I expect Lightspeed to become profitable in its 2025 fiscal year.”
Recent analyst reviews
Kevin Chiang, CIBC Equity Markets (Toronto)
“Although Bombardier posted strong results in the first quarter, its share price declined due to investor concerns about a normalization cycle in the business aviation market, following two extremely strong years. In my opinion, even if the fundamentals of the business aircraft market remain healthy, the macroeconomic situation becomes more difficult for this type of cyclical market, as the global economic environment becomes more uncertain and as the strong tensions between supply and demand. Therefore, in light of Bombardier’s latest results and business outlook, my estimates remain unchanged, with a neutral investment rating and share price target of $69. »
Benoit Poirier, Desjardins Capital Markets (Montreal)
“During its first quarter results, which were in line with expectations, Bombardier management’s message on the outlook for the business jet market remained positive. Despite uncertain economic conditions, and the normalization of business jet demand from pandemic highs, I see enough tailwinds to keep the order backlog strong throughout fiscal 2023. As a result , I am confident in Bombardier’s ability to achieve its financial and business objectives for 2023. In the meantime, I view the recent negative decline in Bombardier’s stock price as a buying opportunity. »
Recent analyst reviews
Cameron Doerksen, National Bank Financial (Montreal)
“Following BRP’s recent year-end results, which were in line with my expectations, and updated new year targets that are ahead of my guidance, I maintain my ‘outperform’ investment rating. ” towards BRP shares, with a target price raised from $139 to $143 per share. In the meantime, I admit that BRP shares could be disadvantaged due to the continued economic uncertainty which could slow the powersports market in the coming quarters. But longer term, I still expect BRP to outperform its industry with continued market share gains as it continues to invest aggressively in new products and remains positioned for superior growth. »
Benoit Poirier, Desjardins Capital Markets (Montreal)
“Despite investor pessimism, the powersports market continues to show encouraging signs, as customers find ways to cope with higher interest rates, and the used vehicle market remains strong. In fact, one of the recurring themes of the past earnings season across multiple industries is that affluent consumers aren’t slowing down their spending. BRP is well positioned to take advantage of this trend as its powersports vehicle and watercraft offering includes more premium products than its competitors. In the meantime, I remain very satisfied with the management of the business plan at BRP to generate profitable growth. I consider the recent negative pressure [on BRP’s share price] to be exaggerated, and represents a buying opportunity. »
