ScotiabankScotia’s Jonathan Goldman raised his CCL Industries Inc. target by $1 to $85 with a “sector outperform” rating. The average is $89.80. “We hosted an NDR in Toronto last week with CCL President and CEO Geoff Martin and SVP and CFO Sean Washchuk,” he said. “The conversations centered on the near-term outlook in the Core label business; the runway in RFID; and M&A. We continue to recommend CCL as a core holding in a diversified portfolio given its defensive end-market exposure (effectively a royalty on deodorant, beer, and clothes) and high FCF generative profile ($700-million per year). We peg normalized EBITDA/share growth at 7 per cent consisting of GDP (2 per cent), growth above market, such as RFID (1 per cent), and share repurchases (4 percent). Moreover, we believe investors are getting a free option on M&A, tuck-ins and large transactions, which remains the top capital-allocation priority. The company has an active list of targets and ample dry powder (net debt to EBITDA 1.1 times), but deal flow can be lumpy given the company’s disciplined M&A approach (pays 4.5 times to 6 times for smaller deals; 6.5 times to 7.5 times for larger transactions).”