Analyst Recommendations for Investing in Cascades, Boralex, and Quebecor: What to Do with Their Securities for Maximum Returns

2023-11-14 03:20:14

(Photo: The Canadian Press)

What to do with the securities of Cascades, Boralex and Quebecor? Here are some analyst recommendations likely to move prices soon. Note: the author may have an opinion completely different from that expressed.

Cascades (CAS, $11.81): Good results in 3Q, but some caution is required for the next period

Although saddened by the death of one of its founders, Bernard Lemaire, the management of the Quebec paper company specializing in packaging, hygiene and recovery solutions proceeded to disclose the results of its third quarter last Thursday in 2023. And they were good.

Sales totaled $1.198 million compared to $1.174 million in the corresponding quarter of the previous year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $161M compared to $111M and net earnings per share were $0.34 versus $0.22 last year.

Frederic Tremblay, analyst at Securities Securities Desjardins, is delighted that EBITDA for the third quarter turned out to be higher than expected. According to him, this reflects the progress made following certain important initiatives put forward by the company, mainly in the tissue paper sector, as well as the start-up of its containerboard mill on Bear Island in Virginia.

That said, the analyst says he sees certain factors encouraging him to still be cautious about the outlook. First, he fears some softness in the containerboard sector in the fourth quarter, given certain uncertainties regarding demand, as well as prices and margins at the start of 2024. He also thinks that a stabilization in the tissue sector in the fourth quarter could cause some pressure on margins in 2024.

These factors lead the analyst to maintain his recommendation to Hold the stock, as well as his target price of $14.00.

The higher-than-expected EBITDA in the third quarter is mainly attributable to the tissue paper sector, whose profitability has increased in each of the last five quarters, notes the analyst. The firm’s initiatives, along with lower costs for raw materials, logistics and energy, have combined to enable these results.