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Thursday's analysts innovations and downsides



Some of today's major analyst's activities are summarized in the internal market

There may be another year ahead of the strategy Alimentation Couche-Tard Inc.According to Keith Howlett, an analyst at Desyardin's Securities analyst Keith Howlett, the planned duplication of transactions over the next five years is becoming apparent to investors who expect the strategy to include further acquisitions and organic growth.

Based on his 2019 fiscal calculations, Mr. Howlett plans to increase the adjusted EBITDA by $ 2 billion in the Quebec-based company in April from 2014 to 2019 for the fiscal year.

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"Now it's one of the three most important convenience / fuel stores in the US and Canada, along with" 7 Eleven "and" Marathon Petroleum, "he said. "It's part of the global rebranding program, including the new Circle K logo and admission (colors and design), transforming all of the convenience stores outside Quebec to Circ Circle (excluding automated refueling stations in Europe, non-convenience stores and no employees). A significant part of the site is Also, the fuel labeled "Circle K" (and in some markets with the Miles subcategory).

"The last stage of growth is based on seven successful acquisitions and integration, with results in Europe and Canada dropping significantly in local currency versus the United States dollar (Couche-Tard reporting currency), with FY19 forecasting 20 percent over five years."

On Wednesday before the opening of the market, Couche-Tard reported that adjusted adjusted earnings per share in the second quarter were 84 US cents, exceeding both Howlett (83 US cents) and Street (82 US cents) projections. The analyst said that sales in one store were good in all markets, rising by 4.4 percent in the US, 4.6 percent in Europe, and 5.1 percent in Canada.

"For the first five weeks of the third to the first half of the 19th century fuel gains have been at an extraordinary level," Mr Howlett said. "The average weekly fuel price level in the country is $ 36.9, which is well above our previous forecast of $ 18.5 per cents a quarter (quarterly 16 weeks). Over the past three quarters, Couche-Tard has reported an average fuel profit of US $ It is 17.95 US dollars. If fuel gains averaged US $ 18.5 in the last 11 weeks, the average fuel earnings in the quarter will be US $ 24. We have revised our forecast to 23.5 US Cents, the EPS is $ 0.25. We have chosen to exclude what we consider to be "surplus fuel revenues" by setting our target price. We do not expect the stock to recur. "

The analyst upgraded his 2019 EPS estimate to $ 3.36 from $ 3.07 to take into account changes in fuel profits. His 2020 forecast is still at $ 3.40.

Keeping the stock "buy", he increased his target price for company shares to $ 77 from $ 74. According to Thomson Reuters Eikon, the average street value is $ 80.51.

"Couche-Tard management is continuously operating in its stores at a higher level than competition in a highly complex industry," said Mr Howlett. "It was a case when it was a small and emerging business organization and it's still in place today. It has maintained its culture even when it hit the top of the North American goods store industry. Management is now trying to raise it again by trying to accept some of the leading CPG companies the rigor of research, while starting to use the new technological tools available to improve decision making and reduce costs. Convenience Shops are generally behind the rest of the retailers on this journey. The page and cash flow will continue to support the acquisition. "

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In the rest of the CIBC World Markets, Mark Petrie increased his target to $ 80 from $ 75 with an "outright" rating (unchanged).

Mr Petrie said: "Couche-Tarda's strong Q2 results show their excellent impetus to the United States both in terms of fuel and goods. The company benefits from beneficial macroeconomic, brand-new and tobacco-based growth, with further opportunities for improving and increasing catering services."

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Raymond James analyst Kenic Tyghe slightly upgraded his financial expectations before releasing financial results for the third quarter on December 6 before opening the market. Dollarama Inc. (DOL-T).

Tighe predicts that 7.1 percent of the annual increase will increase to $ 868 million, which is slightly lower than the $ 873 million expected consensus. An estimate of 2.9 percent for his own store sales growth is "based on a strong increase in expected tickets, partly offset by a slight decrease in traffic."

His EBITDA estimate of $ 214.2 million is also narrowly under consensus at $ 220.8 million, while his earnings per share are $ 42.

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"The change of Halloween time is a significant quarterly wind direction, but it supports a strong expected F4Q19 SSS of 5.8 percent, while the 2019 fiscal estimate of SSS is 3.5 percent," he said. "We expect that the combination of a strong gross profit compass, a less positive blend effect (for a Halloween shift), and a potential contribution to the value proposition (concentrated at $ 3.50 and $ 4.00 price points) to convert to gross margin squeeze 71 base points is 39, 4 percent. Our EBITDA margin of 89 bp reaches 24.7 percent (EBITDA 214.2 million USD), reflects total earnings positions that are compounded by excessive loss of profits and losses, and remuneration pressures are more than offset by cost cutting initiatives. "

Tyghe raised EPS forecasts for 2019, 2020, and 2021 to $ 1.69, $ 1.98 and $ 2.21 respectively from $ 1.66, $ 1.90, and $ 2.21 respectively.

He maintained a "buyable" rating and a $ 50 goal that exceeds the average of $ 47.21 in the street.

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Although not surprised Vermilion Energy Inc.Vietnamese securities analyst Kristopher Zack on Tuesday (Toronto, Vietnam) presented the Investor's Day presentation, although his "financial project" has grown "modest", retaining his "positive view of his disciplined business strategy and significant diversification of goods towards peers."

He said: "Let's remind you that almost 50 percent of the cash flows from 2019 come from property directly exposed to more favorable prices for Brent oil and gas in Europe," he said, emphasizing his considerable commodity price diversification. "We also note the difference in price advantage over peers with most of VET Canadian light oil selling to LSB (ie Cromer), which continues to trade with a premium for waste collection and storage. Growth in Germany, the CAE and the Netherlands should help to preserve Europe's exposure over the next five years:

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"The company emphasized that its first priority was to protect the balance, then maintaining a dividend yield of 8.4 percent, which is one of the most attractive in our coverage list, and we believe it is critical to ensure the current valuation stability. We estimate the profit margin of 110% , indicating that the cash flow (US $ 845 million) would still have to exceed maintenance costs and current dividends (a total of USD 800 million). It should also be noted that the company also emphasized that we believe that current efforts to achieve environmental sustainability (which include in particular emissions and intensity reductions) as part of its HSE practice, becoming increasingly critical for oil and gas producers. "

Mr Zack increased his 2018 and 2019 cash flows to equity estimates to $ 6.04 and $ 7.99, respectively, from $ 5.99 and $ 7.03, respectively.

"The net effect is that our 2019 CFPS forecast is only 2 percent, a minor change that does not affect our positive deviation from inventories at the current level," he said. "Our assessment may be somewhat conservative to the extent that the company can make further improvements in the cost structure, especially in Canada after the active integration of SPE. Our debt level is slightly increasing as the bottled river basin has been bought in the third quarter."

He continues to appreciate Vermilion's "buy" target of $ 50. The street is an average of $ 51.20.

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RBC Dominion Securities analyst Brian Tunick downgraded third-quarter earnings and dropped quarter-quarter management Chico FAS Inc. (CHS-N) to "outsource" the industry, expecting the back pressure to continue in 2019 because of the downside of the comps and omnichannel "pressure".

On Wednesday, the stock of Florida women's clothing retailer fell 34.6 percent after weaker than expected results. The company reported that the yield per share was 5 US cents, which fell from 13 US cents a year ago and 3 US cents less than street expectations.

"Our original overwhelming rating was based on our belief that cost savings programs bought company time to achieve volatility in the CHS portfolio by adding TSR kicker with dividends and redemption," Tunics said. "After 3Q and 4Q downlink (the RBC estimate now has a 9 per cent loss) compared to a consensus of $ 0.17, it is difficult to ignore the upper and lower line uncertainty. Although the fashion brand and marketing mistakes (50% of the sales volatility), instability after the brand's resumption of 2018 in a strong consumer environment speaks of something deeper, especially considering the female counterparts Francesca Holdings Corp., J.Jill Inc. and Ascena Retail Group Inc. Although the brand improvement is scheduled for 2019 In spring, the necessary turnarounds for fashion management often require time and can see road crashes. In addition to being negatively compact, it is unlikely that omnipresence efforts will continue in 2019, as costs will decrease, an association endeavoring to end against the CHS 2.6 percent EBIT margin. Although we believe that the balance can finance the turnover and dividends in the medium term, no great transparency about the sweat and reserves next year we are moving in half. "

Mr Tunick reduced his target for Chico shares to $ 4.50 from $ 10. The average is $ 6.90.

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Looking at the perspective of improved raw materials for 2019 and considering it as the main beneficiary of sector consolidation, another analyst P.J. Juvekaram was upgraded PPG Industries Inc. (PPG-N) to "buy" from "neutral".

"Rapidly decreasing oil prices are ready to reduce some of the intensive commodity inflationary pressures on the company," he said. "We think that PPG accelerates the deployment of M & A with stock redemption as a reserve option, which we believe could be considered positive. In addition, with the more active involvement of investors, we think that the concentration of PPG enforcement has increased and should also help stocks surpass. "

Mr Juvekar has hit his target PPG shares at USD 123 from USD 103. Street average is $ 111.96.

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Beacon Securities analyst Gabriel Leung began coating Quorum Information Technologies Inc. (QIS-X), a Calgary-based company focused on car buyers in Canada and the United States with a "buyer" rating.

"In North America, we believe that there are 22,165 Cubic-addressed concession roofs, which annually repossess $ 700 million in revenue (based on monthly ARPU 2500 USD [average revenue per sure] on the Quorum-based platform), "he said." If we include other add-on modules, we believe that the monthly ARPU could reach $ 4,500, which means an $ 1.2 billion annual recurring income opportunity.

"Competition Market DMS [dealers management system] The products are interesting because it is dominated by a number of larger players, such as Reynolds & Reynolds (private), CDK Global (CDK-N), the ADP (ADP-N) and DealerTrack outcomes Private Company Cox Automotive (private) for US $ 4 billion dollars in 2015. In addition to these big three companies, there are several smaller players, of which, in our opinion, Quorum is one of the biggest (in terms of revenue and OEM achievement), which could make it an attractive way up the road. "

Mr Leung set a target price of $ 1.25 per share, based on its "attractive" business model and entry point, based on its leverage effect and "strong" revenues base.

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In other analysts' activities:

TD Securities analyst Tim James raised AirBoss of America Corp. (BOS-T) to buy from Hold for $ 12.50, which is from $ 13.50. The average street target is $ 12.60.

UBS upgraded Emera Inc. (EMA-T) to "buy" from "neutral" with a target of $ 51, rising from $ 42. The average is $ 46.57.


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