Inside the Market\u2019s roundup of some of today\u2019s key analyst actions<\/p>\n
Seeing limited upside to its shares following a rally that following its April 8 announcement of a definitive agreement to be acquired<\/a> by U.S. private equity giant Francisco Partners Management LP for up to $850-million, RBC Dominion Securities analyst Paul Treiber downgraded Blackline Safety Corp. (BLN-T) to \u201csector perform\u201d from \u201coutperform\u201d previously.<\/p>\n \u201cWhile the takeout premium provides an attractive short-term return on the shares, investors lose an attractive growth story,\u201d he said.<\/p>\n In a client note released before the bell titled An early end of the BLN story, Mr. Treiber thinks the deal, which is comprised of $9.00 per share in cash on closing plus a contingent value right of up to 50 cent per share, \u201caffirms Blackline\u2019s likely average recurring revenue growth re-acceleration.\u201d <\/p>\n \u201cThe CVR provides up to a $0.50\/share cash payment if Blackline\u2019s ARR reaches $148.9-million by the end of FY27,\u201d he explained. \u201cGiven the inclusion of the CVR as part of the consideration, we believe Blackline\u2019s board views the ARR target as achievable. Based on disclosures in the information circular, the ARR targets are based on management\u2019s internal forecasts. The target ARR in the CVR is well above our estimate for $128-million ARR by the end of FY27 and implies growth of 33-per-cent CAGR [compound annual growth rate] over the next two years, accelerating from 28-per-cent year-over-year year-over-year ARR growth as of Q1\/FY26.\u201d<\/p>\n \u201cRollover shareholders imply the long-term thesis remains intact. Shareholder DAK Capital and Chairman and CEO Cody Slater are rolling over their holdings (26.8 million shares or 31 per cent of total) into equity of the purchaser. These large shareholders rolling over their equity implies that they see a compelling long-term growth opportunity for the company.\u201d<\/p>\n Mr. Treiber now thinks other takeout deals \u201cmay be catalysts for the Canadian small cap tech ecosystem\u201d moving forward.<\/p>\n \u201cWith the valuations of some Canadian small cap tech stocks near multiyear lows, we believe more companies may consider going private or selling to acquirers to maximize near-term shareholder value,\u201d he said.<\/p>\n The analyst bumped his target for Blackline shares to $9.25 from $9. The average on the Street is $9.53, according to LSEG data.<\/p>\n While Lightspeed Commerce Inc.\u2019s (LSPD-N<\/a>, LSPD-T<\/a>) fourth-quarter 2026 results were better than expected, RBC Dominion Securities analyst Daniel Perlin thinks its guidance for the first-quarter of fiscal 2027 was \u201coptically disappointing to the Street, as models were likely not calibrated for the Upserve divestiture\u2019s guidance impact, and thus is weighing on the shares.\u201d<\/p>\n \u201cNevertheless, the positive mix shift to faster growing growth markets, which now account for 75 per cent of total revenues, likely reaching 80 per cent by year-end fiscal 2027, should help drive revenue acceleration throughout the year, as FY27 guidance is F2H weighted,\u201d he added.<\/p>\n Shares of the Montreal-based sales technology provider fell 6.6 per cent on Thursday after it released guidance for its current year that includes revenue in the range of US$1.225-billion to US$1.265-billion and adjusted EBITDA of US$75-million to US$95-million. Both fell under the consensus forecast of the Street of US$1.332-billion and US$95.6-million, respectively.<\/p>\n \u201cWhat we liked: 1) LSPD\u2019s GTM [go-to-market] momentum is accelerating, with location growth within its growth engine markets accelerating to 11 per cent from 9 per cent last quarter, now inside of its 3-yearCAGR target, with management investing more into its outbound sales team; 2) Software gross margins were exceptionally higher at 87 per cent due to a cloud providers rebate, but even when normalized, were 82 per cent, with management calling out continued cost efficiencies, consolidating its cloud vendors for better terms, and using AI for support (now resolves 80 per cent of support functions); and 3) SSS came in positive in both Retail and Hospitality markets, and across core geographies, with help from FX,\u201d he said in a note.<\/p>\n \u201cWhere there is push back: 1) 1Q27 and FY27 guidance appear light relative to prior Street expectations, likely due to models not being calibrated for the Upserve divestiture; and 2) similarly due to the divestiture, the company brought down its FY28 targets, which lowered the gross profit target by 3.5 per cent at the midpoint (but lifted margin by 1 percentage point) and adj. FCF by 5 per cent.\u201d<\/p>\n After trimming his 2027 estimates and introducing his 2028 expectations, Mr. Perlin reduced his target for Lightspeed shares to US$10 from US$13, keeping an \u201coutperform\u201d rating. The average target is US$13.04.<\/p>\n \u201cOur Outperform rating reflects: 1) the company streamlining its business to focus on two large verticals, retail & hospitality, with two consolidated tech platforms; 2) increased focus on unified payments and new solutions designed to drive higher aggregate ARPU [average revenue per use]; 3) software ARPU continues to increase, driven by an increasing focus on larger more sophisticated clients and its flagship products coming with a higher percentage of software attachment; and 4) continued focus on profitability after achieving positive adj EBITDA in FY24 and accelerating meaningfully in future periods,\u201d he said.<\/p>\n Elsewhere, other analysts making target adjustments include: <\/p>\n * Stifel\u2019s Suthan Sukumar to US$10 from US$12 with a \u201chold\u201d rating.<\/p>\n \u201cNet-new business momentum in growth engine markets (North American retail, European hospitality) is sustaining, necessitating a pull-forward of growth investments, which should support a consistent outlook for double-digit location growth in these core markets and drive more stability in overall location count. As such, organic growth visibility appears to be improving, and trajectory, as per the Q1 vs full-year growth guide, implies an acceleration over the year, macro permitting. While overall top-line results will remain noisy given the moving pieces with non-core markets and the Upserve divestment, underlying KPIs appear to be trending positively. We continue to look for a re-acceleration in subscription revenue growth to a sustainable double-digit level to grow more constructive around LSPD\u2019s ability to leverage recent strategic changes\/growth investments to fuel greater market share gains and monetization,\u201d said Mr. Sukumar.<\/p>\n * BTIG\u2019s Andrew Harte to US$12 from US$15 with a \u201cbuy\u201d rating.<\/p>\n Seeing it return to a point at which it is gaining domestic market share while a \u201cinternational runway [is] visible,\u201d TD Cowen analyst Derek Lessard upgraded Decibel Cannabis Co. (DB-X<\/a>) to \u201cbuy\u201d from \u201chold\u201d previously.<\/p>\n \u201cStrong domestic execution, accelerating international growth, and a clearer path to sustained margin expansion underpin our upgrade,\u201d he said. \u201cWe view DB\u2019s refreshed product portfolio and international scaling (i.e. processing capabilities and growing extract demand) as key drivers of potential incremental growth and mix-driven margin upside.\u201d<\/p>\n In a note released before the bell, Mr. Lessard said the Calgary-based company\u2019s domestic share has \u201cstabilized\u201d with its scalable processing platform setting it up for gains elsewhere.<\/p>\n \u201cDB reported 30 basis points of market share gains during the quarter. We believe the refresh of the company\u2019s core portfolio (i.e. converted General Admission offerings to Liquid Diamond) is resonating with consumers given the availability of higher-potency SKUs, improved product innovation, and strong promotional activity,\u201d he said. \u201cWe believe the newly introduced Standard Issue brand is a key tool that should, given its value proposition and focus on the high-user segment, drive continued share gains despite the softer consumer environment.\u201d<\/p>\n \u201cWhile competition has increased due to the attractive margin profile abroad, we believe AgMedica\u2019s EU-GMP certification provides a competitive advantage. Specifically, DB can process third-party flower into EU-compliant product for a tolling fee, effectively monetizing its infrastructure beyond its own cultivation capacity. Roughly half of DB\u2019s Q1 international sales were generated by tolling\/processing and other services.\u201d<\/p>\n The analyst bumped his target to 25 cents, matching the average on the Street, from 15 cents. <\/p>\n \u201cDB holds a top-three share in the vape\/pre-roll categories and benefits from an attractive margin profile (i.e. exposure to higher-margin formats). After a period of sales pressure through 2024\/early 2025, we now see clear evidence of domestic share stabilization owing to the General Admission portfolio refresh (i.e. Liquid Diamond) and early traction with Standard Issue. Simultaneously, we believe there is a compelling international growth runway given DB\u2019s scalable AgMedica facility (which includes processing capabilities) and increasing exposure to higher-margin extracts. We also see incremental margin upside driven by greater international mix, operating leverage, and facility consolidation (i.e. Creston sale). While our fwd. target valuation multiple (1.2x) represents a premium to the broader group average (0.9 times), it remains discounted to its TD Cowen-covered LP peers. This reflects DB\u2019s venture-only listing, trading illiquidity, and lower potential for institutional ownership,\u201d he explained.<\/p>\n National Bank Financial analyst Rabi Nizami sees the close of Amex Exploration Inc.\u2019s (AMX-X<\/a>) previously announced $59-million private placement equity financing as a \u201cderisking milestone\u201d with the Montreal-based junior miner now having \u201cthe balance sheet strength to advance engineering and construction of an underground ramp and bulk sample, further advance its Phase 1 and Phase 2 mine development plans, while also conducting more aggressive drill campaigns across the district-scale portfolio of mineral claims in the northern Abitibi.\u201d<\/p>\n With a up to $22-million investment by Eldorado Gold (ELD-T), which currently owns a 27-per-cent stake in Amex, expected to close following a June 16 shareholder vote at the company\u2019s annual general meeting, Mr. Nizami thinks further exploration should continue to be a focus \u201cgiven the district-scale land package assembled over the past year.\u201d<\/p>\n \u201cWe expect AMX to apply part of the new capital to early works and long-lead items that support both the bulk sample and Phase 1 construction which could potentially include ramp development, surface preparation, site infrastructure, water management and power-related work,\u201d he added. \u201cWith a pro forma $109-million cash balance, AMX should be well positioned to execute the bulk sample and continue the Phase 1 permitting\/de-risking pathway while allocating more funds for exploration across Perron and Perron West.\u201d<\/p>\n Coming off research restriction, Mr. Nizami reiterated an \u201coutperform\u201d rating and $6.50 for Amex shares. The average on the Street is<\/p>\n \u201cWe continue to view Amex as an M&A opportunity for regional mill operators in Quebec seeking high-grade feed, particularly given the project\u2019s location in the Abitibi, its toll-milling development path, permitted 40,000-t bulk sample, and exploration potential,\u201d he said.<\/p>\n When Saputo Inc. (SAP-T<\/a>) reports its fourth-quarter fiscal 2026 results after the bell on June 4, TD Cowen analyst Michael Van Aelst expects to see \u201csolid\u201d operational gains, however he lowered his earnings before interest, taxes, depreciation and amortization (EBITDA) projection to reflect higher expected share-based compensation expenses, reflecting a 75-per-cent rise in price over the last 12 months. <\/p>\n \u201cWe believe investors will look through this and give SAP credit for the strong execution and pricing discipline driving the expected underlying 11-per-cent year-over-year EBITDA growth (ex-SBC and ARG), despite ongoing challenges in USA market factors and higher ad\/promo spend,\u201d he said.<\/p>\n Mr. Van Aelst is now forecasting continued operations adjusted EBITDA of $386-million, down from $413-million but up from $368-million during the same period a year ago. While his estimate falls below the $412-million average on the Street, he thinks approximately half of his peers\u2019 projections have not been adjusted for the divestiture of its Argentina operations and SBC considerations.<\/p>\n \u201cInvestors should look through higher SBC,\u201d he said. \u201cWith SAP shares up 75 per centin F26, we believe some catch up will be necessary … We have assumed a $23-million incremental non-cash SBC true-up in Q4, which accounts for most of the decrease in our Q4E EBITDA (with the remainder tied to updated commodity prices and forex rates). We assume SBC normalizes in F27 as it seems unlikely that the share price rises at the same pace.<\/p>\n \u201cQ4\/F26 expected to reflect strong operational performance. Excluding incremental SBC expense and Argentina, our Q4\/F26E EBITDA represents 11-per-cent year-over-year growth, with all divisions contributing despite higher ad\/promo spend (more concentrated in Q4 TY). We expect another quarter of strong execution, mix improvement and pricing discipline, with high fill rates and efficiencies maintaining the solid Q3 run rate.\u201d<\/p>\n Mr. Van Aelst emphasized a deterioration in market conditions in the United States during the quarter, which he says is reflect through butter prices, \u201ca proxy for SAP\u2019s input costs for Dairy Foods.\u201d<\/p>\n However, he kept a \u201cbuy\u201d rating and $52 target for Saputo shares. The average is<\/p>\n \u201cValuation sits at 10.8 times consensus NTM [next 12-month] EBITDA estimate, below the 10-year average of 11.1 times, despite a balance sheet that has meaningfully strengthened (leverage less than 1.8 times) and much better underlying EBITDA growth rates (we forecast 12 per cent\/8 per cent in F27\/F28), with FCF yields reaching 6.6 per cent\/7.3 per cent in F27\/F28,\u201d he said. \u201cManagement is back to executing well \u2014 pricing discipline and commercial initiatives are increasing volumes and margins in all divisions \u2014 and large capital projects (optimization and capacity expansion initiatives) of past years are delivering returns. Dairy commodity pricing remains volatile, but strong demand (domestic and export) and a moderation in milk supply growth (vs. what we have seen recently) should lead to more stable market factors over time.”<\/p>\n In other analyst actions: <\/p>\n * Barclays\u2019 Richard Garchitorena initiated coverage of Agnico Eagle Mines Ltd. (AEM-T<\/a>) with an \u201coverweight: rating and $292 target, seeing it as a low-cost gold miner with over 85 per cent of its production coming from the low-risk jurisdictions of Canada and Finland as well possessing a strong track record of share returns through acquisitions. The average target on the Street is $373.04.<\/p>\n * While Barclays remains constructive on the uranium industry, pointing to several tailwinds, it thinks further gains for investors may be limited in the near-term, leading Mr. Garchitorena to initiate coverage of Cameco Corp. (CCO-T<\/a>) with an \u201cequalweight\u201d rating and $149 target. The average is $177.10. <\/p>\n * Mr. Garchitorena also initiated coverage of these stocks: Barrick Mining Corp. (ABX-T<\/a>) with an \u201cequal-weight\u201d rating and $56 target; Hudbay Minerals Inc. (HBM-T<\/a>) with an \u201coverweight\u201d rating and $41 target and Lundin Mining Corp. (LUN-T<\/a>) with an \u201cequal-weight\u201d rating and $42 target. The averages are $79.63, $40.03 and $40.06, respectively.<\/p>\n * Emphasizing \u201clong-term visibility is more important than short-term noise\u201d following Thursday\u2019s post-market earnings release<\/a>, Scotia\u2019s Konark Gupta cut his CAE Inc. (CAE-T<\/a>) target to $50 from $56 with a \u201csector outperform\u201d rating. The average is $46.28.<\/p>\n \u201cWe maintain our SO rating while trimming our target to $50 (was $56) as we adjust our model to reflect F2027 guidance, F2030 targets, and updated definitions for certain financial metrics, said Mr. Gupta. \u201dWe have rolled forward the valuation to F2030E, discounting back two years at 10 per cent to derive our new target. Simply put, FQ4 results and F2027 guidance highlight incremental near-term weakness in Civil due to the Middle Eastern conflicts and transformation effects, while the longer-term outlook is still positive and Defense continues to beat expectations. Although the stock may trade sideways initially due to the noise in results and outlook, we believe long-term fundamental investors will be encouraged by the standardized FCF math and quantitative disclosures. Pending more details on the earnings call … we think CAE\u2019s targets imply EPS more than $2.00 in F2030 along with more than 100-per-cent FCF conversion, equating to 10-11-per-cent CAGRs. Interestingly, CAE\u2019s leverage ratio target of 2.5 times suggests that there could be $3.3-billion in potential excess liquidity by F2030, which, if unleashed fully and prudently, could generate incremental value via shareholder returns or additional investments. We remain bullish on CAE as the transformation takes shape.”<\/p>\n * Raymond James\u2019 Steven Li lowered his target for Computer Modelling Group Ltd. (CMG-T<\/a>) by $1 to $6 with an \u201coutperform\u201d rating. The average is $6.05.<\/p>\n \u201cImproved 4Q with in-line revenues and better than expected A-EBITDA margins. Based on updated management commentary, we have tweaked our model. Our revenue forecasts are little changed, but we have tweaked our model adjusted EBITDA higher. We don\u2019t factor in potential acquisitions,\u201d said Mr. Li.<\/p>\n