Morning News Call Canada

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Canada Edition Tuesday, February 9, 2021

TOP NEWS • Cenovus Energy misses estimates on uneven demand, weak refinery operations Canada's Cenovus Energy posted a bigger-than-expected loss, hit by uneven demand for fuel due to renewed COVID-19 travel restrictions and weaker refinery operations.

• Cannabis producer Canopy Growth narrows loss in third quarter Canopy Growth's aggressive cost-cutting measures and increased demand for cannabis products during the pandemic-led lockdowns helped the world's largest pot producer report a smaller third-quarter adjusted loss.

• Bitcoin powers towards $50K as Tesla takes it mainstream Bitcoin was fast approaching the $50,000 mark as the afterglow of Elon Musk-led Tesla's investment in the cryptocurrency had investors reckoning it may become a mainstream asset class for both corporations and money managers.

• DuPont signals strong 2021 on demand from smartphone makers, auto rebound Industrial materials maker DuPont forecast full-year profit and revenue above Wall Street expectations on the back of robust demand from smartphone makers launching 5G handsets and a recovery in global auto sales.

• Makeup demand slump wipes millions off Coty's revenue Coty posted a 16% drop in second-quarter revenue, hurt by weak demand for makeup products as shoppers stayed at home due to fresh COVID-19 restrictions.

BEFORE THE BELL Futures for Canada's main stock index slipped as oil prices eased from session highs. U.S. stock index futures edged up ahead of earnings reports from companies including Cisco and Mattel and as investors looked for signs of progress on a proposed $1.9 trillion stimulus package. European shares dipped as hopes of a swifter global economic recovery and vaccine roll-outs cooled down, while Asian equities ended in the green. The U.S. dollar was down, while gold prices jumped to a one-week high and platinum prices climbed to its highest in more than four years.

STOCKS TO WATCH • Canopy Growth Corp: The company's aggressive cost-cutting measures and increased demand for cannabis products during the pandemic-led lockdowns helped the world's largest pot producer report a smaller third-quarter adjusted loss. The company said it will turn profitable by the second half of its next fiscal year and achieve positive operating cash flow in fiscal 2023. Canopy's targets could help placate investors as profits have remained elusive due to oversupply that has crimped sales in Canada. Most producers have also been burning cash on foiled big bets in other countries. Canopy's U.S.-listed shares rose 2% in premarket trading on the Nasdaq. The company posted an adjusted loss before interest, taxation, depreciation and amortization of C$68.4 million for the three months ended Dec. 31, compared with C$97 million, a year earlier.

• Cenovus Energy Inc: Canada's Cenovus Energy posted a bigger-than-expected loss, hit by uneven demand for fuel due to renewed COVID-19 travel restrictions and weaker refinery operations. Cenovus' fourth-quarter crude utilization was 68%, down from 77% in the third quarter, while refined products fell nearly 12% to 350,000 barrels

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DATA IS JUST 1 THE BEGINNING ~ MORNING NEWS CALL - CANADIAN EDITION Februa 9, 2021 per day (bpd) from the prior quarter. Last month, Cenovus forecasted higher production and spending for 2021 after its purchase of rival Husky Energy, but stressed its focus on cutting debt as the oil industry recovers from the pandemic. Net loss narrowed to 12 Canadian cents per share in the fourth quarter, from 16 Canadian cents per share in the third quarter. On an adjusted basis, Cenovus posted a loss of 45 Canadian cents per share, while analysts had expected a loss of 10 Canadian cents per share.

• TMX Group Ltd: the company’s fourth-quarter profit rose from a year ago, driven by increased equities and fixed income trading revenue and capital formation activity, which helped offset declines in derivatives trading and clearing business, it said. The operator of the Toronto Stock Exchange posted adjusted earnings of C$1.43 per share, compared with C$1.31 per share, a year earlier. Analysts had expected C$1.45 per share. Net income was C$1.26 a share, versus 84 Canadian cents, a year ago.

FOCUS JPMorgan's board rejects switch to stakeholder-focused entity JPMorgan Chase CEO Jamie Dimon has led calls for companies to consider the needs of workers, communities and customers as well as those of shareholders. But now it is clear: investors come first.

ANALYSTS' RECOMMENDATION • AG Growth International Inc: Scotiabank raises target price to C$40 from C$33, citing the company's improving sales momentum and margin performance in international market.

• TMX Group Ltd: RBC raises target price to C$151 from C$148, citing better-than-expected results in fourth quarter and strong trading volumes.

• Well Health Technologies Corp: Canaccord Genuity raises target price to C$12 from C$9, stating the company's improved revenue estimates and EBITDA forecast following its acquisition of CRH Medical.

ECONOMIC EVENTS No economic indicators are scheduled for release.

COMPANIES REPORTING RESULTS February 9: Canopy Growth Corp: Expected Q3 loss of 35 Canadian cents per share Finning International Inc: Expected Q4 earnings of 37 Canadian cents per share FirstService Corp: Expected Q4 earnings of 80 cents per share Intact Financial Corp: Expected Q4 earnings of C$2.36 per share

February 10: Cameco Corp: Expected Q4 loss of 4 Canadian cents per share Great-West Lifeco Inc: Expected Q4 earnings of 75 Canadian cents per share Keyera Corp: Expected Q4 earnings of 27 Canadian cents per share Kinross Gold Corp: Expected Q4 earnings of 22 cents per share Manulife Financial Corp: Expected Q4 earnings of 72 Canadian cents per share Mullen Group Ltd: Expected Q4 earnings of 15 Canadian cents per share Russel Metals Inc: Expected Q4 earnings of 22 Canadian cents per share Sun Life Financial Inc: Expected Q4 earnings of C$1.39 per share Toromont Industries Ltd: Expected Q4 earnings of C$1.05 per share

CORPORATE EVENTS (All timings in U.S. Eastern Time) 0800 TMX Group Ltd: Q4 earnings conference call 0830 PrairieSky Royalty Ltd: Q4 earnings conference call 1000 Canopy Growth Corp: Q3 earnings conference call 1100 FirstService Corp: Q4 earnings conference call

EX-DIVIDENDS There are no major exdivs for the day.

(All analysts' estimates are according to I/B/E/S Refinitiv data.)

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DATA IS JUST 2 THE BEGINNING ~ MORNING NEWS CALL - CANADIAN EDITION Februa 9, 2021

PICTURE OF THE DAY

The Kraken house float, on Memphis St., in Lakeview, is one of thousands in the New Orleans area decorated in celebration of Mardi Gras in Louisiana, U.S., February 7. REUTERS/Kathleen Flynn

(Compiled by Pranay Prakash and Siddharth Athreya V in Bengaluru) Refinitiv 3 Times Square, New York, NY 10036 To subscribe for The Morning Newscall newsletter click here Please visit: Refinitiv for more information. For questions or comments about this report, contact: [email protected] Privacy statement

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DATA IS JUST 3 THE BEGINNING ~