Why CIBC continues to prefer the lifecos to the banks, how price targets changed for energy companies in anticipation of second quarter earnings reports and more from The Week in Stocks.

Stock of the week: Mattr Corp.

Mattr Corp. (MATR:TSX) had a blockbuster week, rising 34.2 per cent with analysts pricing in further upside as five of the eight covering the shares hiked their 12-month price targets after the Toronto-based energy and infrastructure technology company on July 13 upgraded its preliminary second quarter projected results for revenue and adjusted earnings before interest, taxes and depreciation (EBITDA). Michael Tupholme, an analyst at TD Cowen, hiked his price target to $23 from $14, where the shares were trading prior to the company’s update. Shares closed Friday at $18.29. Mattr said it now expects second quarter revenue of $390 million to $400 million compared with consensus of $332 million and second quarter EBITDA of $60 million to $65 million versus consensus of $43.1 million. Tupholme said strength looks “broad based” though Mattr did not provide breakdowns by division. The company’s update “appears to be driven by underlying healthy demand,” the analyst said. Despite the stock’s jump, “we see value in Mattr,” he said. Mattr has a 12-month price target of $19.43 based on the calls of seven analysts, according to Bloomberg.

Keeping score

Why CIBC continues to prefer the lifecos to the banks

CIBC Capital Markets analysts led by analyst Paul Holden said they continue to prefer Canada’s top life insurers to the Big Banks as they hiked price targets across the board in the lead-up to second-quarter earnings season in the next few weeks. “The lifecos have traded better since Q1 with the discount to the banks narrowing,” the CIBC team said in a note on July 14, adding that for the second quarter they are expecting a nine per cent increase in earnings per share year over year underpinned by several factors including strong stock markets and share buybacks. Their preference is based on factors including more upside from higher interest rates and high returns on equity and share buybacks. Great-West Lifeco. Inc. (GWO:TSX) and Manulife Financial Corp. (MFC:TSX) are CIBC’s top picks. “GWO is the cleanest story,” they said, having racked up a “solid” set of consecutive results. CIBC has a price target of $93, up from $80. Shares closed Friday at $92.82. Manulife is trading at a discount to the group of four companies, but CIBC expects it to deliver in the quarter on strong sales in Asia and the analysts “like the stock ahead of results.” CIBC hiked its price target to $69 from $61. Shares closed Friday at $60.74. The analysts also hiked price targets for Sun Life Financial Inc. (SLF:TSX) to $116 from $102 and iA Financial Corp. (IAG:TSX) to $208 from $180. Shares closed Friday at $114.74 and $208.22, respectively.

Scotia Capital sets the stage for energy earnings with updated price targets

Second quarter earnings for the oil and gas sector are set to roll out in the next few weeks, and Scotia Capital Markets analysts led by Kevin Fisk have set the stage for investors with ratings and price target changes for Canada’s oilpatch players. The Scotia team is calling for prices for West Texas Intermediate and Brent crude of US$70 and US$75 a barrel in the third quarter on “depleted inventories and strategic reserves, and a heightened geopolitical supply risk premium.” They also said in a report on July 17 that they are bullish on refined oil products, but cut their price outlook for natural gas on plentiful North American supply. Scotia upgraded International Petroleum Corp. (IPCO:TSX) to sector outperform from sector perform on “its high production growth, attractive free cash flow, and reasonable valuation,” and maintained their target price of $38. Shares closed Friday at $31.00. Scotia assigned Cenovus Energy Inc. (CVE:TSX) a price target of $49 on the belief that its U.S. refinery performance is “starting to bear fruit” and that it is on track to hit its net debt target, positioning it to increase capital return to 75 per cent of free cash flow. Shares closed Friday at $39.20. Scotia said it expects Suncor Energy Inc.’s (SU:TSX) earnings to be driven by “extremely robust crack spreads” — the difference between the cost of crude oil and a refined product, such as diesel — hiking its price target to $106 from $101. Shares closed Friday at $87.53. Suncor repurchased $350 million worth of shares monthly during the second quarter and Scotia said “we see the potential for a material acceleration of buybacks utilizing excess free cash flow.”

Price target hikes and holds

• RBC Capital Markets analyst Keith Mackey maintained his price for CES Energy Solutions Corp. (CEU:TSX) of $23 after the company said it may repurchase up to 18.1 million common shares between July 2026 and July 2027. Shares closed Friday at $16.41.

• TD Cowen analyst Derek Lessard hiked his price target for Cannara Biotech Inc. (LOVE:TSX) to $4 from $3.25 after the medical cannabis company said it expanded its market outside of Quebec to Ontario and B.C. Shares closed Friday at $1.92.

• Raymond James analyst Craig Stanley hiked his price target for New Pacific Metals Corp. (NUAG:TSX) to $7.50 from $6.15 on an improved production outlook for its Carangas silver-gold project in Bolivia. Shares closed Friday at $5.74.

• Scotia Capital Markets analyst Andrew Mikitchook maintained his price target for Artemis Gold Inc. (ARTG:TSX) of $55 on strong second production that beat estimates. Shares closed Friday at $31.67.

• CIBC Capital Markets analyst Ty Collin maintained his price target for Premium Brands Holdings Corp. (PBH:TSX) of $115 on a more “conservative” assessment of the consumer and inflation headwinds they faced in the second quarter. Shares closed Friday at $89.93.

• ATB Cormark Capital Markets analyst Jeff Fenwick maintained his price target for Exchange Income Fund Corp. (EIF:TSX) of $146 on winning a $750 million contract to supply training to the Royal Canadian Air Force. Shares closed Friday at $127.70.

• Email: gmvsuhanic@postmedia.com