Monday’s analyst upgrades and downgrades

Share

Inside the Market's roundup of some of today's key analyst actions

Canadian Alt-A mortgage lenders are "down, but not out," according to CIBC World Markets analyst Marco Giurleo.

"Coming out of last April's liquidity crisis, Canada's two largest Alt-A mortgage lenders, EQB [Equitable Group Inc.] and HCG [Home Capital Group Inc.], emerged battered, bruised and yet arguably stronger," said Mr. Giurleo in a research report released Sunday.

"Balance sheets are materially de-risked, especially now that rapid flight High Interest Savings Accounts (HISAs) are no longer a significant source of funding. Liquidity and capital are stronger than they have ever been and confidence has been restored thanks no less to an investment in HCG courtesy of Berkshire Hathaway. The one caveat is that profitability has taken a hit driven in large part by measures to shore up liquidity. Our 2018 ROE [return on equity] forecasts for HCG and EQB are 7.0 per cent and 13.5 per cent, down notably from 2016 levels of 15.4 per cent and 16.9 per cent, respectively. We believe restoring profitability will be a challenge, particularly if liquid assets remain at elevated levels; and more specifically for HCG if it cannot deploy excess capital."

Mr. Giurleo emphasize a pair of significant risks for the sector moving quarter – "the ever-present concerns about a housing correction" and, more importantly, "ongoing housing regulatory reform, including the proposed B-20 changes to uninsured mortgages."

He added: "While the reforms present headwinds to mortgage growth, we believe the alternative lenders are well positioned to withstand the slowdown. On a company-specific basis, we prefer EQB over HCG as we believe EQB came through the turbulence with its business model largely intact, and is better equipped to withstand a slowdown in mortgage growth, more attractively valued and capable of delivering double-digit ROE through the cycle."

The analyst initiated coverage of Equitable Group with an "outperformer" rating and $75 target for its stock. The analyst consensus price target is currently $65.14, according to Thomson Reuters data.

Mr. Giurleo gave Home Capital Group a "neutral" rating and $17 target. Consensus is $16.88.

In justifying his ratings, he said: "We prefer Outperformer-rated EQB to Neutral-rated HCG as we believe: 1) EQB is better positioned to withstand a slowdown in housing as it has more levers it can pull to offset a slowdown in mortgage growth; 2) EQB trades at an attractive valuation (0.89 times book value versus 2018 estimated return on equity of 13.5 per cent); 3) EQB is well positioned to steal market share from HCG; and, 4) unlike HCG, EQB is capable of delivering double-digit profitability through the cycle.

"As for Neutral-rated HCG, given its struggles to grow the balance sheet since the broker fraud in 2014 (total loan book down 3 per cent since) in addition to the recent liquidity crisis, which we expect will only exacerbate this problem, we believe the deployment of excess capital will be challenging. As such, our muted outlook for asset growth and an over-capitalized balance sheet (20-per-cent CET1) are what underscore our soft profitability outlook for the firm (7.0-per-cent ROE in 2018). In terms of valuation, shares are trading at a depressed P/BV of 0.65 times, which we view as fully valued and commensurate with the firm's weakened profitability."

=====

In a research note on the metals and mining sector, Credit Suisse analysts Anita Soni, Robert Reynolds and Mark Llanes reacted to the firm's recent price forecast updates for both the loonie and copper prices by downgrading a trio of companies while raising the rating for another.

The firm's global team raised its copper estimates to $2.89 per pound in the third quarter of 2017, $2.45 in Q4/17 and $2.39 in 2018, from $2.50, $2.30 and $2.05, respectively.

"Our team expects copper prices to subside on China's industry curtailments planned for winter, and in H2/18 on its concern that infrastructure stimulus and housing construction could fade," they said.

Credit Suisse is now projecting an exchange rate $1.20 (Canadian) for $1 (U.S.) for the next 3 months and $1.15 over the next 12 months. It had previously been $1.22 and $1.32, respectively.

With the changes, the firm downgraded the following stocks:

• Centerra Gold Inc. (CG-T) to “neutral” from “outperform” with a target of $10.50 (from $9.50). Consensus is $10.01.
  
  Mr. Reynolds said: “We rate CG Neutral based on valuation as CG has appreciated 18% since the Kumtor settlement was first announced on September 5th and now trades at 1.12 times P/NAV at spot, a slight premium to mid-tier peers at 1.05x. Delivery on the Mt. Milligan ramp up and subsequent delineation of upside opportunities there, or a more attractive valuation could make us more constructive on CG. Receipt of the Oksut pastureland permit is a potential positive catalyst, but is already reflected in our NAV estimate.”
  
  
• Detour Gold Corp. (DGC-T) to “neutral” from “outperform” with a target of $16 (from $20 ). Consensus is $21.75.
  
  Ms. Soni said: “We downgrade the stock to Neutral due to the stronger CAD headwind, with target price already reflecting some operational improvement at Detour Lake.”
  
  
• Franco Nevada Corp. (FNV-N, FNV-T) to “neutral” from “outperform” with a target of $80 (U.S.), rising from $78. Consensus is $70.72.
  
  Ms. Soni said: “We downgrade FNV to Neutral based on a limited return potential to our updated target price and the valuation expansion seen in FNV's stock YTD. We raise our target price … based on a refresh of our copper and CAD price deck, commodity price MTM and minor model revisions to reflect the additional stream with First Quantum on the Cobre Panama project.”
  
  

At the same time, Ms. Soni upgraded Eldorado Gold Corp. (EGO-N, ELD-T) to "neutral" from "underperform" with a target of $2.40 (U.S.). Consensus is $3.61.

She said: "We rate EGO Neutral on attractive valuation balanced by (i) continued set-backs in Greece; (ii) re-assessment of timelines and capital plans in Greece in light of on-going challenges; and (iii) prolonged negative FCF until 2021 if Skouries is built. As these issues are alleviated we could become more constructive. Commodity prices, operations and geopolitics are the key risks."

=====

Encana Corp.'s (ECA-N, ECA-T) strategic move to focus on high margin oil and condensate production growth "has borne fruit quicker than expected," according to RBC Dominion Securities analyst Greg Pardy.

He said that success has positioned it for "self-funded growth in 2018 and beyond in a $50 WTI world."

"Production growth stories are common in the exploration & production field, but companies that offer a combination of growth and expanding margins — like Encana — are uniquely powerful, in our view," said Mr. Pardy. "Since the arrival of its new President & CEO, Doug Suttles, in 2013 Encana has left no stone unturned in its pursuit of enhanced operating efficiency. Alongside a 55-per-cent headcount reduction, Encana's strategy entailed a massive overhaul of its portfolio. These acquisition and disposition initiatives have served to reduce its debt levels and streamline its portfolio to its Big Four—the Permian (Midland) Basin, Montney, Eagle Ford and Duvernay—where it expects to deploy about 97 per cent of its planned 2017 capital program of $1.6-$1.8-billion. Encana remains committed to its multi-basin strategy, and looks upon 4-8 plays as optimal. Down to tag ends on non-core dispositions following its recent $735-million Piceance asset sale, Encana expects to make a call on whether the San Juan is core or not by the end of 2017."

Mr. Pardy said the company's per share production growth, centered on the Permian Basin and Montney, is approaching an inflection point. He projects its top and bottom-line production growth compound annual growth rate at 13 per cent from 2017 to 2021, suggesting it will be a source of discussion at the company's Oct. 18 investor open house in New York.

"Driven by relentless cost improvements and an evolving production mix towards oil and Montney condensate (which captures WTI in C$), Encana's corporate margin (cash flow/boe) is set to climb at a 6-per-cent CAGR from $10.72 per barrel of oil equivalent (boe) in 2017E to $13.53/boe in 2021 (stable $50 WTI and $3 Henry Hub)," he said.

"Encana's balance sheet is deleveraging amid growth and margin expansion. We peg the company's average net debt-to-trailing cash flow ratio at 3.0 times (versus 2.6 times for our peer group) in 2017, and 2.1 times (versus peers at 2.2 times) in 2018. The company possesses ample liquidity, and was completely undrawn on its $4.5-billion revolving credit facility as of June 30, 2017, with its earliest principal debt repayment being due in 2019 ($500-million) Encana has reset its dividend twice since 2013 due to oil market conditions and the need to retain cash flow, but dividends are likely to become a bigger component of its shareholder offering as its five year strategy unfolds."

Maintaining an "outperform" rating for Encana, Mr. Pardy raised his target price for its shares to $15 (U.S.) from $13. The analyst consensus price target is $13.09 (U.S.).

"As an execution story, Encana's principal risks revolve around achieving its production, cash flow margin and capital spending targets on a consistent basis," he said.

=====

CIBC World Markets analyst Hamir Patel said he's "moving to the sidelines" on Cascades Inc. (CAS-T), downgrading its stock to "neutral" from "outperformer."

"We are downgrading Cascades … with the death of the fall containerboard hike and our increased concerns about a potential spike in OCC costs over the next six months as China adjusts its policies on recovered paper imports," he said.

"With no follow-on price hike announcements from International Paper and WestRock since Georgia-Pacific and KapStone announced hikes on Sept. 11/13, it appears as if the fall hike attempt has fallen flat. We believe CAS' shares may come under some near-term pressure as the stock appears to have rallied the most on speculation of a successful fall hike, with CAS up 12 per cent since Sept. 11 compared to its U.S. peers which are only up an average of 0.7 per cent (with KS/WRK actually down). International Paper's announcement last week that it will convert white paper capacity at its Selma, AL mill to 450K tpy of kraftliner by mid-2019 also makes us question whether the industry will raise prices in spring 2018 (as is currently embedded in our CAS estimates)."

Mr. Patel maintained his target for the stock of $18. Consensus is $18.29.

"We had previously upgraded Cascades on Aug. 28, 2016 when the shares were trading at $9.80 due to pricing momentum in the company's core containerboard business," he said. "With Cascades having outperformed the TSX Composite by over 77 per cent since International Paper first announced the Fall 2016 price hike last August (which was followed by another hike in Spring 2017), we see limited upside remaining and …  reduce our rating to Neutral.

"Despite moving to the sidelines, we note that CAS offers Canadian investors exposure to the best segment of the forestry products industry (containerboard), a market with high barriers to entry and strong demand. At the same time, Cascades has dramatically simplified its business in recent months, through the consolidation of Greenpac, sale of its legacy investment in Boralex and advancement of the ONE Cascades initiative (margin improvement program)."

At the same time, Mr. Patel downgraded Western Forest Products Inc. (WEF-T) to "neutral" from "outperformer" based on both share price appreciation and "growing indications that a near-term resolution to the softwood lumber dispute seems unlikely."

"Trade sources indicate softwood lumber negotiations between Canada and the U.S. have soured in the last week as the U.S. has moved far off the 'handshake deal' that was initially on the table in mid-August," he said. "With Secretary Ross apparently ready to wash his hands of the entire file (given the difficulties dealing with the hardliners in the U.S. Lumber Coalition), the only deal on the table (28-per-cent hard quota phased in within three years) for Canada right now is likely unacceptable to most parties north of the border. While lumber negotiations have been continuing on a separate track to NAFTA, we believe NAFTA talks have now reached a stage where it would be very difficult to wrap up a new lumber deal while NAFTA is still being re-negotiated (and is unlikely to be concluded until 2019)."

He kept a $3 target, which is 9 cents more than the consensus.

"We had previously upgraded Western FP on June 5, 2017 when the shares were trading at $2.17 due to the company's positioning on the trade file in a strong cedar market, attractive valuation and upside to a potential new quota-based SLA (which could result in structurally higher margins for WEF). With Western now approaching our $3.00 price target, we see limited catalysts and …  reduce our rating to Neutral."

Mr. Patel also dropped Norbord Inc. (OSB-T) to "neutral" from "outperformer" on  share price appreciation.

"While NA OSB prices have likely peaked this cycle, we see earnings only peaking in 2020 when the company should still benefit from robust pricing levels while seeing full contributions from the Inverness expansion and Huguley mill re-start, as well as the likely re-start that year of Chambord," he said.

His target of $53 did not change. Consensus is $49.68.

=====

Ahead of the release of its third-quarter financial results on Wednesday, Desjardins Securities analyst Gary Ho raised his target price for shares of AGF Management Ltd. (AGF.B-T) to reflect recent news on Smith & Williamson.

On Aug. 31, AGF announced the United Kingdom financial and professional services firm, which it currently owns a 32.3-per-cent stake, is no longer in discussions with Rathbone Brothers on a possible merger.

"We are updating our S&W valuation to $254-million from $168-million previously, which accounts for the $1 bump in our target price," said Mr. Ho. "To derive this, we assumed S&W is worth GBP550 million, based on a current exchange rate of $1.67 Canadian per 1 GBP1 and AGF's ownership of 32.4 per cent. In addition, we applied a 22-per-cent tax rate on the potential capital gains on top of AGF's current book value of $1010mukkuib. To us, the monetization of S&W is a question of when and not if. We have confidence that an S&W transaction will materialize—eg the Tilney all-cash offer and potentially taking the company public."

Mr. Ho also lowered his estimates "slightly" in reaction to a projected drop in quarter-end assets under management, which he said was "negatively impacted by the stronger Canadian dollar."

"From May–August, the Canadian dollar strengthened 8 per cent versus the U.S. dollar," the analyst said. "Recall that 65 per cent of AGF's retail and institutional AUM is invested in foreign securities. Otherwise, we continue to expect improvement in retail net flows; we adjusted our 3Q net redemption estimate to $109-million from $146-million previously (and $303-million last year)."

With a "buy" rating, Mr. Ho's target rose to $8.50 from $7.50. Consensus is $8.09.

He said: "We foresee a few near/medium-term positive catalysts: (1) improving fund performance leading to 60 per cent of AUM above median over three years, (2) net retail flows improving relative to industry, (3) investors recognizing a proper valuation of S&W, (4) restoring management's credibility, and (5) all of these factors leading to better sentiment and valuation."

=====

Hardwoods Distribution Inc. (HWD-T) is a "well-run business with M&A upside potential," according to Canaccord Genuity analyst Yuri Lynk.

Noting it currently presents investors with a "favourable risk versus reward proposition," he initiated coverage of the Langley, B.C.-based company with a "buy" rating.

"Hardwoods is North America's largest distributor of architectural building products," he said. "These products include hardwood plywood and other composite panels (51 per cent of revenue), hardwood lumber (30 per cent), and related architectural-grade building products (19 per cent). Hardwoods is a key intermediary, connecting hundreds of suppliers with thousands of customers. As the largest player in its space, Hardwoods is able to leverage its significant size and scale advantage to negotiate favourable pricing from suppliers and beat its competitors on timely delivery, reliability, and consistency of product quality.

"We believe Hardwoods has less than 10-per-cent market share, affording it ample opportunity to continue to consolidate the industry. Management has compiled an enviable acquisition track record, buying six companies since 2011. The largest, by far, was the $107-million (U.S.) purchase of Rugby Architectural Building Products (Rugby) last year. This was a highly accretive deal, contributing to TTM [trailing 12-month] (the first full year to include Rugby) adjusted EPS growth of 20 per cent on just 5-per-cent organic growth. We believe there are at least a dozen large acquisition targets with revenue in the $100 - $300-million (U.S.) range. Our work suggests such an acquisition could add 8 per cent to Hardwoods' stock price."

Mr. Lynk said he likes the company's exposure to the recovering U.S. housing market, noting 85 per cent of its sales are generated south of the border and residential sales account for 52 per cent of total revenue.

"The National Association of Home Builders (NAHB) forecasts an 8-per-cent increase in U.S. housing starts in 2018 and its US Remodeling Market Index remains firmly in expansion mode," he said. "In our view, this bodes well for building products demand. We view management as solid operators with the ability to generate economic returns that belie Hardwoods' relatively low EBITDA margin profile of 5.5 per cent.

"Compensating for this is the fact Hardwoods' invested capital turnover is well above average, aided by good inventory turns (key for any distribution business) and best-inclass receivables collection. Furthermore, this is a capital-light business with TTM capex equivalent to just 0.1 per cent of revenue, allowing the Board to increase DPS at a 24-per-cent CAGR over the last six years. We see a 5-per-cent increase in DPS in each of the next two years with upside potential should management successfully complete an acquisition."

He set a price target of $23 for Hardwood shares. Consensus is $25.29.

"We see mid-single-digit organic growth driving EPS to $1.65 in 2019 from the $1.51 delivered on a trailing twelve months (TTM) basis," said Mr. Lynk. "Acquisitions, which have proven to be significantly accretive in the past, represent upside potential to our estimates. At 12.9 times our 2017 EPS, Hardwoods trades at a 33-per-cent discount to the group. We see this discount narrowing and thus set our target multiple at 14.5 times, which we apply to Q3/2018E - Q2/2019E EPS. The multiple expansion we expect reflects Hardwoods' top-quartile TTM return on average invested capital (ROIC) of 15 per cent, well below average leverage, improved trading liquidity compared to just a few years ago, and acquisition upside potential."

=====

Citing both its current valuation and notable recent insider buying, BMO Nesbitt Burns analyst Troy MacLean initiated coverage of American Hotel Income REIT LP  (HOT.UN-T) with an "outperform" rating.

"AHIP's unit price has been hurt this year, down 9 per cent in 2017 (Canadian REIT index down 1 per cent)," said Mr. MacLean. "We think the decline has been partially driven by the decline in the US$ vs. the Canadian dollar (AHIP trades in C$, but all of its revenue is in US$), as well as lower-than-expected financial results (H1/17 same-property net operating income down 10 per cent). BMO Economics is expecting the f/x rate to remain stable in 2018 (BMO forecast of 1.223 versusu  spot at 1.228).

"2017 financial results have been impacted by rail contract renewals, which should not put further downward pressure on 2018 results (rail volumes are rising and the majority of the rail contracts have been renewed). AHIP declined 7 per cent after announcing Q2/17 results (headline FFO of 23 cents per unit versus consensus at 25.4 cents, and SPNOI down 12.3 per cent, largely on rail portfolio). We think the factors that led to the miss in Q2 (decline in rail portfolio, drag from un-invested cash) are unlikely to recur in 2018, as it will be lapping weak quarters from 2017, and the contract renegotiations are already reflected in existing results."

Noting its "improved" portfolio quality and its balance sheet is in "good shape," Mr. MacLean said his positive thesis on the stock is also "supported" by recent insider buying. He noted that insiders have purchased 226,510 units in the public market (at an average cost of $9.16 per unit) since it reported second-quarter results in early August.

He set a target of $11 per unit. Consensus is $11.14.

"AHIP is trading at 9.2 times 2018 estimated AFFO [adjusted funds from operations] and a 22-per-cent discount to NAV [net asset value] (typically trades at a 14-per-cent discount to consensus NAV), which we think provides a good entry point," said Mr. MacLean. "AHIP is trading at the second-lowest AFFO multiple and second-biggest discount to NAV of our Canadian REIT coverage universe, and has a fully covered yield of 8.4 per cent. We think the combination of an above-average yield and a below-average valuation provides an attractive total return opportunity."

=====

Ahead of the third-quarter earnings season for Canadian pressure pumpers, Raymond James analyst Andrew Bradford remains bullish on the sub-sector.

"In conversations, the 'Pressure Pumping Thesis' – an investment narrative described by rising frack-intensity, reduced cost structures, higher sand loadings per well, etc. – has been widely adopted as the consensus view," he said. "And to some extent, this has borne-out through recent share price performance, most noticeably through relative price performance: CFW [Calfrac Well Services Ltd.] and TCW [Trican Well Service Ltd.] are up 41 per cent and 28 per cent respectively over the last 30- days, while the average Canadian driller is up 11 per cent."

"Canada's fracturing industry has already recovered to a greater degree than we think is generally appreciated. It's true that pricing is about 12 per cent to 15 per cent lower than 2013, and margins are similarly lower, but we calculate that annualized EBITDA per unit of fleet horsepower is already surpassing 2013 levels. This is because the equipment is being used more efficiently, is pumping more product, and cost structures have been rationalized."

In a research note previewing earnings season, Mr. Bradford maintained a "strong buy" rating for Calfrac, raising his target price to $6 from $5.85. Consensus is $5.01.

His rating for Trican remains "outperform" with a $6 target. Consensus is $5.35.

"This relative recommendation comes down to the potential flexibility embedded within TCW's balance sheet," he said. "We expect TCW will exit 2017 with 1.6 times debt/trailing EBITDA versus 5.7 times for CFW.

"That said, from a tactical perspective, we believe CFW has a greater chance to report an upside surprise in 3Q17. We are looking for $67-million EBITDA – 60 per cent above the $42-million consensus figure. In addition, CFW's greater financial leverage means its equity value should be about twice as sensitive as TCW equity to changing fundamentals or enterprise multiple. Therefore, we think energy bulls might consider CFW's higher debt levels beneficial to equity performance."

=====

BMO Nesbitt Burns analyst Gerrick Johnson raised his target price for shares of BRP Inc. (DOO-T) following its dealer meeting and analyst event last week, where it reaffirmed its goal of $6-billion in sales by fiscal 2021.

"The presentation to the investment community was brief, as it was not the focus," said Mr. Johnson. "The company is still committed to generating $6 billion in revenue by FY2021 and appeared open to entertaining the idea of acquisitions, which have not been part of the strategy thus far as a public company (we think KTM might be a good fit). If done organically, the target implies about 7.5-per-cent compound annual sales growth (should the company hit the high end of its FY2018 target), as well as upside to current earnings models. Capacity, which had previously been a risk to growth, looks to grow by 30 per cent in FY2019 for side-by-side vehicles (SSV) and 20 per cent for personal watercraft (PWC).

"The event centered on product and the reveal of model year 2018 Can-Am off-road vehicles (ORV), CanAm Spyder roadsters, and Sea-Doo PWC. In ORV, the company introduced a robust new product lineup, including several new SSVs such as the Maverick Trail, the Maverick X3 X RC Turbo, the Defender X MR. In Sea-Doo the company introduced a platform on its higher-end PWS. The company also teased a new sub-$10,000 Spyder product due out next year. The event generated a lot of buzz and excitement with the dealer base. The energy level and enthusiasm were significant higher than at the Polaris dealer event and 2018 product reveal held in Las Vegas last month."

Mr. Johnson believes the most notable announcement was the introduction of the Maverick, noting: "We believe the Trail series is important to BRP beyond being able to attack 15 per cent of the market it did not previously serve. Like the Defender did for the company in farming areas, we expect the Trail to help increase the number of dealer points as well as expand the breadth of product existing dealers will carry in areas where a trail-ready vehicle would be most popular. Thus, we expect a lift in sales of ATVs, Defenders, Commanders, and the rest of the Maverick line."

In reaction to the event, he raised his 2019 earnings per share projection to $2.90 from $2.80.

He kept an "outperform" rating for the stock, increasing his target to $50 from $46. Consensus is $44.99.

"We think BRP's brands are gaining momentum and market share due to innovation, design, and performance," the analyst said. "We believe BRP is the best positioned in the segment, with its product diversity, opportunities for margin improvement, continued earnings growth, and share price appreciation."

=====

SSR Mining Inc.'s (SSRM-T) Seabee gold operation in Saskatchewan is a "quality asset in the hands of a proven team," said RBC Dominion Securities analyst Rahul Paul.

In response to a tour of the facility last week, which includes the Seabee mill and two underground mines (Santoy and Seabee), Mr. Paul raised his target price for shares of the Vancouver-based company.

"The operation showed very well - not surprising in light of consistent outperformance over the last two years," he said.

"We consider the operation (in particular the Santoy mine) a high-quality asset with the potential to be transformational for any company. In the hands of the proven SSR team, we see significant value to be unlocked. While we expect the strong operating momentum and attractive cash flow generation to continue going forward, exploration potential is likely a bigger source of upside in light of attractive results from limited stepout drilling at Santoy and surface exploration along the Santoy shear."

Mr. Paul said he considers Santoy to be "one of the most attractive underground deposits in the sector," citing its "attractive grades and widths, as well as the geometry of the ore body that allows for productive low-cost mining methods with relatively lower development spending on development. This, in turn, should drive robust FCF margins with relatively lower capital, driving superior returns."

He added that he believes expansion of the Seabee mine is a "a relatively low-risk project."

"The Santoy mine is over two years ahead on waste development and should comfortably feed an expanded 1050 tons per day [tpd] plant (21 per cent above 870 tpd in 2016)," he said. "The plant expansion only requires modest capital. In fact, the mill has already been able to operate close to the planned 1,050 tpd and could sustain this performance with minor circuit modifications and optimization. We see further expansion potential beyond PEA targets - management plans to evaluate a further expansion to 1,200 tpd once current targets have been attained. This scenario is still being reviewed, but management is optimistic that it may be attainable with limited incremental capital. Our model assumes no contribution from any expansion beyond the planned 1,050 tpd under the PEA.

"Significant reserve/resource growth potential from a possible expansion of the mineralized footprint at Santoy and regional exploration upside along the Santoy shear. Opportunities close to existing Santoy infrastructure include the Gap hanging wall (drilling 200m in the structure returned 26.55 g/t over 2.8 m) and untapped potential at depth (very limited drilling below 750 m). In addition, regional exploration looks promising as highlighted by the Carr target and opportunities on the Fisher property, suggesting the potential for additional Santoy type deposits on the large land package."

In response to his tour, Mr. Paul raised his 2018 earnings per share estimate to a 15-cent loss from a 1-cent loss. His 2019 projection is a profit of 18 cents per share, rising from 15 cents.

Keeping a "buy" rating for the stock, his target rose to $20 from $18. Consensus is currently $16.89.

"SSR Mining currently trades at 0.65 times price/NAV, a 13-per-cent discount to its high-quality midcap producer peers (Alamos, Torex, Oceana, Endeavour)," the analyst said. "We believe the stock should command a premium given the highly prospective Seabee Gold operation, the strong cash flow generation from the Marigold mine, and management's consistency in attaining stated targets (SSR Mining has met or exceeded guidance for 5 years in a row, with a sixth year highly likely by at year-end)."

=====

In other analyst actions:

Deutsche Bank analyst Rod Lache upgraded General Motors Co. (GM-N) to "buy" from "hold" with a $51 (U.S.) target, rising from $36. Consensus is $38.70.

KeyBanc analyst Edward Yruma raised his target for Under Armour Inc. (UAA-N) to "overweight" from "sector weight" with a $20 (U.S.) target. Consensus is $19.68.

Canaccord Genuity analyst Jason Mills upgraded California-based STAAR Surgical Co. (STAA-Q) to "buy" from "hold" and raised his target to $15 (U.S.) from $11. Consensus is $12.75.

"We upgrade our rating on STAA to BUY and increase our year-end 2018 price target to $15, as we recommend small-cap investors begin to build positions in STAA ahead of accelerating growth and GM expansion, in our estimation, as we expect a resolution to the Warning Letter soon," said Mr. Mills. "We recently had the opportunity to host CEO Caren Mason and CFO Deborah Andrews for client meetings in the Bay Area, and we come away from these discussions with increased confidence in STAA's growth strategy going forward, and continue to believe the business model is on the cusp of an inflection. We think this management team has done a very good job over the past 2+ years building a stronger foundation for the firm, including a complete quality system overhaul and significant innovation and product development, laying the groundwork for accelerating top-line growth once the Warning Letter is lifted, which we believe will allow STAA to replicate its successful business model in China here in the U.S."

MORE TO COME