EYE ON EQUITIES

ROYAL BANK OF CANADA ( RY-TSX) CLOSE $ 127.22, UP 33¢

CIBC World Markets analyst Paul Holden is expecting “another set of strong results” for Canadian banks during the quickly approaching second-quarter earnings season. However, he says an economic slowdown is “increasingly being priced in” and headline results “might not matter all that much.”

Target: He cut his target for Royal Bank of Canada shares to $146 from $149 with an “outperformer” rating. The consensus on the Street is $148.17.

EMERA ( EMA-TSX) CLOSE $ 63.34, UP 66¢

Emera Inc. is “doing exactly what defensive-minded investors would expect a regulated utility company to do,” RBC Dominion Securities analyst Maurice Choy said following in-line results and a reaffirmation of its outlook. “We also find both the stock’s relative valuation (2.0-2.5 times price-toearnings discount to its closest peer) and 4.0-4.5 per cent dividend yield attractive,” he said. Target: With an “outperform” rating, his target rose to $72 from $66. Consensus is $65.37.

PRECISION DRILLING ( PD-TSX) CLOSE $ 94.35, UP $ 6.84

Expecting a sustained jump in dayrates alongside rising rig counts, Raymond James analyst Andrew Bradford sees increased profitability for North American contract drillers. He views the Street’s estimates for Canadian drillers as “too conservatively biased,” particularly from the third quarter as “contracts begin rolling into current market pricing at accelerated rates.”

Target: Mr. Bradford upgraded Precision Drilling Corp. to “strong buy” from “outperform” with a $130 target, up from $115. Consensus is $120.12.

GUARDIAN CAPITAL GROUP (GCG-TSX) CLOSE $ 33.50, UP $ 2.14

With its valuation discount now at its widest since March, 2020, Scotia Capital analyst Phil Hardie sees an “attractive entry point” into Guardian Capital Group Ltd. after weaker-than-anticipated first-quarter results. “We believe the current valuation discount is too steep to ignore and that Guardian’s stock can outperform its peers in both bull and bear scenarios,” he said.

Target: Mr. Hardie trimmed his target to $45 from $50 with a “sector outperform” rating. Consensus is $42.

EXCHANGE I NCOME ( EIF-TSX) CLOSE $ 46.16, UP $ 1.98

RBC Dominion Securities analyst James McGarragle sees Exchange Income Corp.’s “proven resiliency and upside from investment” creating a “compelling” investment opportunity. He reiterated the firm’s “positive view” on the company’s shares upon assuming coverage with an “outperform” recommendation, calling it a “rare opportunity to own both a value and a growth story.” Target: His target for Exchange Income shares increased to $62 from $52, exceeding the $58.50 consensus.