As the end of 2023 and the beginning of 2024 on the stock market approaches, La Presse updates the ranking of analysts’ investment recommendations among companies headquartered in Quebec, which are worth 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 first classifies companies according to the opinions of analysts who recommend buying them rather than selling or keeping them in the portfolio. The second classifies 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 one year assigned to each company by the analysts who cover them specifically.
Vishal Shreedhar, National Bank Financial:
“I remain optimistic about Gildan despite the recent volatility in its operating results. I anticipate its earnings per share (EPS) to increase in 2024 given these three main factors: revenue growth with the addition of new production capacity and the completion of new [retailer] contracts. won in 2023; improving operating costs with lower raw material [cotton fabric] prices and rolling out efficiency initiatives; the continuity of share purchases by the company. As for factors that could hurt growth at Gildan, I’m mostly following the slowdown in the retail market and possible price reductions. »
Chris Li, Desjardins Capital Markets:
“The earnings outlook at Gildan remains attractive, assuming the macroeconomic environment and the basic apparel market remain adequate. I anticipate solid earnings per share growth of 16% in 2024. Gildan shares remain cheap, at a multiple of approximately 11 times forecast 2024 EPS compared to a multiple of 15 times on average among its peers. »
Frédéric Tremblay, Desjardins Capital Markets:
“I consider Savaria shares to remain significantly undervalued despite their recent rebound sparked by the announcement of third quarter results which highlighted the continued strength of its core markets in North America and Europe. I expect this market dynamic to continue in North America and intensify in Europe in 2024.”
Zachary Evershed, National Bank Financial:
“Thanks to a healthy order book and its business momentum further demonstrated in its recent quarterly results, I reiterate my “market outperformance” rating for its shares on the stock market. I’m also maintaining my target price at $18.50 per share. At the same time, I anticipate the possibility of increasing my estimates as the operational improvements planned as part of the new Savaria One business plan are rolled out. »
Konark Gupta, Scotia Capital:
“Air Canada shares have underperformed recently despite third quarter results and an updated business outlook that were better than expected. This weakness in the stock market appears to me to be due to the increase in capital investment projects which has added to the current concerns of investors with regard to Air Canada. Although I anticipate weakened demand in 2024, I believe Air Canada can continue to generate positive cash flow and reduce its debt ratio by 2025. I view Air Canada stock as very underperforming. valued on the stock market. »
Cameron Doerksen, National Bank Financial (Montreal):
“I maintain a “market outperform” rating on Air Canada shares following its recent third quarter results, which were better than expectations. I believe Air Canada’s upcoming results will continue to benefit from favorable market conditions such as continued strong traveler demand and limited capacity addition in the number of flights and available seats. »
Benoit Poirier, Desjardins Capital Markets:
“Following CAE’s strong second quarter results and updated business outlook, I maintain my Buy recommendation on its shares while slightly lowering my target price from $37 to $35 . I see potential for shareholder value gains as CAE continues to perform well in civil aviation and improve profit margins in its defense-related businesses. CAE management remains focused on these elements of its business plan despite the effects of certain variables that are beyond its control. »
Cameron Doerksen, National Bank Financial:
“Despite its recent rather mixed quarterly results, I remain optimistic about CAE’s business prospects, with a ‘market outperform’ rating for its shares. CAE is expected to experience several years of growth in civil aviation, where demand remains strong for pilot training and the delivery of flight simulators. In the military sector, I expect profit margins to improve alongside very favorable growth in military spending around the world. »
Vishal Shreedhar, National Bank Financial:
“The capital gain potential remains significant for Couche-Tard [ATD] shareholders if it achieves its five-year ambitions for 2028; the main one being the achievement of 10 billion in annual operating profit, compared to the 5.8 billion achieved in its last financial year 2023. My favorable investment opinion towards ATD is motivated by its internal growth potential arising from its initiatives to improve its distribution and store merchandising operations, as well as the potential for other acquisitions for growth and return of capital to shareholders. »
Chris Li, Desjardins Capital Markets:
“After the recent investor presentation at Couche-Tard [ATD], I adjusted my earnings estimates and raised my target share price from $79 to $82. This reflects the still attractive business outlook at ATD. There could be near-term risk to ATD’s stock value if slowing growth in in-store merchandise sales persists, due to economic pressure on consumers and additional restrictions on tobacco products. »
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. Among the companies headquartered in Quebec, which have the highest earning potential within a year, from the analysts’ point of view? La Presse used the average of the analysts’ target prices for each company and calculated the difference with the recent price of the shares listed on the stock exchange. Here is an overview of the top five companies that were not presented in the previous tab.
Benoit Poirier, Desjardins Capital Markets:
“After the recent quarterly update at Lion Electric, I am maintaining my stock target price, but adjusting my earnings estimates for 2024. Essentially, I have lowered my expectations for [electric] truck deliveries ]. I have raised my expectations for the average selling price of school buses in the United States with the impact of the government’s commercial EV purchase assistance program in the coming quarters. Increased manufacturing efficiencies resulting from capacity expansion projects at Lion Electric and the success of its school bus division support my long-term bullish sentiment for the value of its shares on the stock market. »
Rupert Merer, National Bank Financial:
“I have adjusted my earnings estimates and stock target price taking into account its reduced outlook for vehicle sales next year. Thus, despite the impact of government programs in Canada and the United States in favor of electric vehicles (EV), I have revised downwards my estimates for school bus sales in 2024. I have also reduced my forecasts electric truck deliveries. Lion Electric is not yet profitable, but I consider its financial performance to be better than that of most of its peers in the EV market. »
Hamir Patel, CIBC Capital Markets:
“After experiencing pressure on the profit margin in its packaging division, TCL is seeing a decline in the supply costs of plastic resins which should help to increase this margin in the coming quarters. In its printing business, where profit margin has been impacted recently by a reduction in demand, I anticipate that this profitability will improve soon as TCL’s cost reduction initiatives bear fruit and costs of The supply of printing paper is moderating. »
Adam Shine, National Bank Financial:
“Transcontinental (TCL) is facing pressure from investors to improve and stabilize revenue and profit growth in its packaging division, while solidifying operating profit (EBITDA) in its packaging division. impression. Like investors, I expect progress on all of this in its upcoming fiscal year 2024. TCL shares are now trading at a price and multiple of estimated 2024 earnings per share that are unusually depressed relative to peers. Based on this, I am maintaining my stock target price at $16 while upgrading its investor rating to “market outperform.” »
Don DeMarco, National Bank Financial:
“I consider Aya a top investment choice in silver mining. Aya displays an unrivaled growth profile with the continued expansion of production from its Zgounder mine in Morocco, as well as the increase in potential resources from its Boumadine mining project, also in Morocco, following the expansion of its exploration program. Its Zgounder mine expansion project is on budget and on schedule through the first quarter of 2024. Aya remains positioned to exceed the upper end of its production target range. Therefore, I am reiterating my “Market Outperform” rating and target price of $12 per share. »
John Sclodnick, Desjardins Capital Markets:
“I raised my expectations of Aya Or
Rupert Merer, National Bank Financial:
“Innergex reported revenue and operating profit (EBITDA) that were higher than expected, despite a slight reduction in its total electricity generation on an annualized basis; a reduction largely due to a drop in hydroelectric production in British Columbia and wind production in Quebec. Innergex’s near-term outlook still looks good, as energy price expectations point higher. In my opinion, Innergex’s recent results call into question the prevailing bearish sentiment among investors towards the renewable energy independent producer sector. »
Brent Stadler, Desjardins Capital Markets:
“Innergex’s recent quarterly results were strong. I continue to see good investment value in its power generation assets which have a good diversity of technologies and regions, in addition to an advantageous proportion of higher value hydroelectric assets. I maintain my Buy recommendation with a target price of $14 per share. »
Cameron Doerksen, National Bank Financial:
“Bombardier’s recent third quarter earnings and business outlook report demonstrated that business aircraft market conditions remain generally healthy. With an order backlog of US$14.7 billion, this should support the continued recovery in earnings and cash flow at Bombardier. So I’m maintaining my “market outperform” rating on Bombardier stock, with a target price of $93. »
Benoit Poirier, Desjardins Capital Markets:
“Bombardier recently announced strong third quarter results that defied gravity above expectations. After these results and management’s comments, also considering that Bombardier will benefit from favorable conditions for increasing its cash flows in the coming quarters, I have adjusted my financial estimates and increased my target price from $99 to $103 $ per share. I believe that Bombardier is not yet at the end of its turnaround, but I have confidence in the ability of its leaders to achieve and potentially exceed their main objectives for fiscal 2025.”
