ATB Capital Markets' 11th Annual Institutional Investor Conference

• Leading analysts to provide critical insights from Western Canada’s perspective
• Inflationary pressure and moderate economic slowdown to persist in 2023
• Transportation, Travel, E-commerce and Exploration & Production sectors to resume growth 

Calgary and Toronto — ATB Capital Markets Inc., the capital markets arm of ATB Financial, launches its 11th Annual Institutional Investor Conference in Toronto tomorrow, with management teams from multiple sectors presenting over three days. The insights of these business leaders, alongside the perspective of ATB Capital Markets’ research analysts, will provide an outlook on the challenges and opportunities to expect in 2023.

“As one of the leading Canadian financial institutions headquartered in the West, ATB Capital Markets can provide a unique perspective on what 2023 means for Canadian businesses,” said Darren Eurich, CEO of ATB Capital Markets. “Increased interest rates, supply chain issues, and geopolitical risks will continue to impact our economy, forcing companies to revise strategies, carefully manage balance sheets, and identify fresh opportunities in existing and new markets. Despite these challenges, Canada’s position as a leader in the energy sector, its track record of innovation in life sciences and technology, and solid diversified industries have the potential to deliver growth for investors.” 

“Moving into 2023, inflation is expected to continue at current levels and Canada is forecasted to experience an economic slow down with GDP growth of approximately 0.5%. At the same time, bolstered by high energy and agricultural commodity prices, Alberta is well-positioned to withstand the economic pressures with an estimated 2.8% GDP growth,” added Mr. Eurich. “It is an important year for Alberta to capitalise on its key strengths and in the rest of Canada, an opportunity for growth in the transportation and infrastructure sectors.”

Diversified Industries Outlook  

• Transportation: anticipate a rebound in air travel and tourism based on the removal of COVID-related restrictions and the return of business travel. 
• Engineering and Construction: supply chain issues, inflationary pressure and labour availability have impacted the sector. However, material supply and strong bookings are supportive of 2023 earnings growth.
• Diversified Manufacturing and Services: improvements in global supply chains are expected to support production recoveries across several industries. With strong pent-up demand for several consumer and industrial sectors, we see 2023 extending the post-COVID recovery as supply and demand normalise. 

“While many of the companies in our coverage universe will continue to face macroeconomic challenges in 2023, we see growth opportunities as management teams realign their businesses and seek new ways to enhance value,” said Chris Murray, Managing Director, Institutional Research, Diversified Industries. 

Growth and Innovation Outlook

• E-Commerce: online spending will resume strong growth, as the industry lapses the epicly, tough, COVID-19 comparable period.
• SaaS: In a difficult macroeconomic environment, we believe the SaaS companies under our coverage will prove the resilience of their recurring revenue business model. 

“We believe the Canadian tech sector will continue to blossom, supported by talent, capital and secular growth trends,” stated Martin Toner, Director, Institutional Research, Growth and Innovation. “Most publicly traded companies are considerably off all-time highs, and current multiples look attractive.”

Energy Outlook

• E&P Companies: continued strong medium and long term investment appeal, with markets navigating the impacts of macroeconomic and recessionary challenges in the near term; those near term challenges see our 2023 forecasts for industry margins and returns on capital modestly lower than 2022, but still well above the long term industry average.  2023 will most likely create an opportunity for investors to focus on those producers with the highest quality operations and upstream inventory depth.
• Energy Services: 2023 will be the year for cash harvesting and shareholder friendly capital allocation, as EBITDA growth sharply outpaces capital spending increases. 

“E&P and energy service companies have been among the best performers on the TSX over the past two years,” said Patrick O’Rourke, Managing Director, Institutional Equity Research (E&P). “We expect this trend to continue in 2023, with near term volatility creating an opportunity for investors to focus on owning the highest quality operators and assets.”

“The lack of adequate investment in global oil and gas supply capacity since 2014 should lead to a multiyear upcycle in the Energy Services sector, despite near-term macroeconomic headwinds,” added Waqar Syed, Managing Director, Energy Technology & Services and Head of Research. “Over the medium term we also expect to see investment growth in low carbon energy like renewable fuels and carbon capture, utilisation and storage.” 

Life Sciences Outlook 

• U.S. Cannabis Market: While a number of regulatory related headwinds weighed on growth and pummelled sentiment, the legal U.S. cannabis market (US$26.8 billion) continued to generate solid growth in 2022. Moving into 2023, it is expected the regulatory obstacles will ease as key regulatory reforms (including the SAFE Banking Act) will be passed, and adult use will begin in recently legalised markets. This will support an acceleration of growth and markedly improved investor sentiment.
• Canadian Cannabis Market: The highly fragmented legal Canadian cannabis market ($4.9 billion) in 2022, which remains burdened by both excess capacity and regulations, appears poised for accelerated consolidation through 2023. It is forecasted that the emerging leaders will leverage their more disciplined execution and stronger balance sheets, to drive a healthy reset on sentiment around the Canadian cannabis market. 

“The North American cannabis sector through 2022 was challenging for investors on both sides of the border. While difficult, we believe that key anticipated changes in both the regulatory backdrop and competitive dynamics create a very appealing risk reward scenario through 2023," said Kenric Tyghe, Managing Director, Equity Research. “Furthermore, in 2023, we expect a more constructive narrative in both Canada and the U.S.A. to support a reset in valuations."

The conference will take place in person and virtually, with institutional investors connecting with management teams in one-on-one meetings, fireside chats, and panel presentations. This will be complemented by insights from ATB Capital Markets’ research analysts with deep company and sector expertise. Over 70 companies will present during the three-day conference, with each day devoted to a different sector.  

About ATB Capital Markets
ATB Capital Markets offers holistic corporate and capital markets advice, combined with customised financial solutions to help businesses thrive. We’re a full-service investment dealer for key industries on the cusp of a new era. Established in 2020, ATB Capital Markets helps clients with services that include investment and corporate banking, sales and trading, institutional research, and risk management.

ATB Capital Markets is Broker/Dealer #03 on the Toronto Stock Exchange.

About ATB Financial
With $59.1 billion in assets, ATB Financial is an Alberta-built financial institution that is a catalyst for economic growth in our province. We got started in 1938 to help Albertans through tough economic times. Today, ATB Financial’s more than 5,000 team members love to deliver exceptional experiences to over 800,000 clients through our many branches and agencies, our 24-hour Client Care Centre, four entrepreneur centres, and our digital banking options. ATB powers possibilities for our clients, Alberta and beyond.