What to watch: Shopify, Air Canada and Canadian National

Shopify isn’t unanimous among analysts after Tuesday’s investor day. (Photo: 123RF)

What to do with Shopify, Air Canada and Canadian National titles? Here are some analyst recommendations that are likely to change prices soon. Note: the author may have a completely different opinion than the one expressed by the analysts.

Shopify (SHOP, $96.96): shares split by analysts

Despite a 22% increase in sales from its merchants during Black Friday and better-than-expected results presented in early November, Shopify is not unanimous among analysts after its investor day on Tuesday.

On the more enthusiastic side is the Royal Bank of Canada. Its analysts say the presentation by Shopify executives supports their contention that the e-commerce platform is entering a bull market period.

La Royale particularly highlights Shopify’s efforts to optimize its internal processes, which will “help it maintain its competitive edge and its ability to innovate.” RBC Capital Markets also highlights Shopify’s ability to integrate artificial intelligence into its operations and the additional revenue potential this deployment represents.

But it is mainly the overall addressable market potential that excites RBC analysts. Shopify estimates this market at $849 billion. In 2015, these estimates were 46 billion.

“This analysis is similar to the one we did in 2020 where our estimate was 800 billion. Primarily, this aligns with our long-term bullish thesis for Shopify, as the company has the opportunity to monetize a large portion of the overall retail market, such as in China,” explained the analysts, who are raising their target for the stock from $80 to $100.

On the other hand, Wedbush Securities analyst Scott Devitt is less enthusiastic. “With Shopify’s stock up almost 50% in the past month and its value really being extremely high compared to its peers, it seems like the right time to make a move. I think there will be good opportunities ahead to buy stocks at a lower price,” he said in an interview with Bloomberg. He also changed his rating on the stock from “Outperform” to “Neutral”.

Despite the consensus on Shopify’s future potential, analysts at ATB Capital and TD Cowen also indicated that they preferred to play it safe with the Canadian company’s stock.

Dominique Talbot

Air Canada (AC, $18.27): Canadian market less favorable to low-cost carriers

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