Inside the Market’s roundup of some of today’s key analyst actions
TD Cowen analyst Tim James continues to have a “positive view” of Canada’s defence industry, touting “greater chances of positive vs negative catalysts going forward, earnings growth and upside from M&A.”
“We believe thematic appeal will continue to be more important for share prices/multiples than actual long-term economic value opportunities,” he added.
In a client report released before the bell, Mr. James updated his valuation multiples across his coverage universe, seeing the outlook being “very positive through decade-end.”
“Canadian companies with exposure to Canadian defence spending and government services have attracted incremental investor interest over the past 12 months due to plans for much higher-than-normal increases in defence spending and Canada’s position as an alternative to U.S. sourcing for other NATO and allied countries,” he explained.
“Canada plans to increase defence spending 12 per cent in F2026-27, including 33 per cent for capital expenditures. Long-term NATO targets imply a spending CAGR [compound annual growth rate] for Canada of 9 per cent through 2035. Canada’s Industrial Strategy calls for an 11.5-per-cent CAGR in Canadian-based defence industry revenue through F2034-35. We estimate Canada’s spending plans and strategy could increase the percentage of consolidated revenue for Canadian companies from Canadian defence by an average of approximately 50 per cent over the next 10-years (i.e. 10 per cent of revenue to 15 per cent).”
Given that bullish long-term view, Mr. James made these target price adjustments to stocks in his coverage universe:
* AirBoss of America Corp. (BOS-T, “buy”) to $10 from $9. The average target on the Street is $9, according to LSEG data.
Analyst: “Increasing our target multiples on MAL, EIF and BOS as we believe upside potential remains based on comp valuations, business momentum and our view that the risk of negative catalysts in the next 12-months is low.”
* Bombardier Inc. (BBD.B-T, “hold”) to $292 from $284. Average: $314.44.
Analyst: “We view the BBD business and outlook very positively, but consider recent strength and the valuation (14.4 times forward EBITDA) as appropriately discounting high quality of the business, balance sheet improvement, growth outlook, defence opportunities and other positive investment attributes. ”
* Exchange Income Corp. (EIF-T, “buy”) to $142 from $125. Average: $124.80.
* Magellan Aerospace Corp. (MAL-T, “buy”) to $37 from $30. Average: $38.
Following Saputo Inc.’s (SAP-T) release of largely in-line financial results, Ventum Capital analyst George Doumet thinks the quarter “reinforced a shift in the investment narrative from harvesting the benefits of network optimization toward investing for the next leg of growth.”
"Management signaled increased spending across both capex (ingredients, cottage cheese) and opex (A&P) to support volume growth,“ he added. ”While this may modestly temper near-term margin expansion/ FCF conversion, it should strengthen the Company’s longer-term earnings trajectory. M&A remains an important catalyst, with management emphasizing strategic fit over size. We believe bolt-on acquisitions in branded, value-added dairy categories (cottage cheese) would likely be well received, while ingredients-related opportunities may face a higher bar despite attractive growth prospects."
On June 4, the Montreal-based dairy giant reported revenue of $4.173-billion, down 5 per cent year-over-year and below both Mr. Doumet’s $4.446-billion estimate and the consensus forecast of $4.35-billion. Earnings per share rose 21 per cent to 41 cents, exceeding expectations (37 cents and 39 cents, respectively) as margins topped projections “driven by improved mix and benefits from the network optimization.”
“FY27 CapEx is set to rise to $550-million, up from $339-million in F26 and our previous expectation of ‘$400-million-plus’,” he said “Spend is disciplined and high-return, concentrated in the fastest-growing dairy segments, with capacity and efficiency benefits phased to execution. The bulk of the associated revenue contribution lands in F29.
“ ... but FCF generation to remain strong. For F27 and F28, we model FCF of $770-million and $816-million, respectively, reflecting the shift to an investment-for-growth posture. This translates to a still-healthy FCF conversion of 45 per cent (vs. 55 per cent previously modeled and 67% in F26).”
Mr. Doumet “modestly” lowered his financial projections through fiscal 2028 in response to higher A&P spending and stock-based compensation.
“Inflation remains manageable, with energy and fuel cost pressures broadly consistent across geographies,” he said. “To date, these headwinds have been mitigated through operational efficiencies, logistics optimization, and customer engagement. Pricing viewed as a tool of last resort.
“The commodity tide turning? U.S. dairy markets are becoming more constructive, with commodity volatility moderating from the extreme levels seen between 2020 and 2025. Commodity prices remain near cyclical lows, while milk production growth is expected to slow materially from last year’s 2–4-per-cent pace, tightening supply-demand balances through 2026 and into H1/27. In our view, this should support a gradual recovery in commodity markets from current levels.”
Maintaining his “buy” rating for Saputo shares, he bumped his target to $48 from $47. The average target on the Street is $47.83.
Elsewhere, other analysts making changes include:
* TD Cowen’s Michael Van Aelst to $51 from $52 with a “buy” rating.
“Q4 demonstrated structurally improving margins and mix-led growth, with volume, protein/ ingredients, and execution driving earnings despite some commodity headwinds. Incremental capex and ad/promo spend should support higher-value growth, though capex returns skew to F28+. Capital allocation favors dividends/NCIB and organic investment, with the potential for selective, bolt-on M&A,” said Mr. Van Aelst.
* CIBC’s Mark Petrie to $49 from $47 with an “outperformer” rating.
“Saputo is making strong progress towards re-shaping its organization with a more commercial mindset that should support a runway of improving margins. Weak cheese prices remain a near-term headwind, but exceptionally strong by-product demand and prices could shift commodities to a net – and material - tailwind. Our target multiple ticks up to 22 times to account for the underemployed balance sheet capacity and margin upside," said Mr. Petrie.
Desjardins Securities analyst Benoit Poirier has “increased confidence” in MDA Space Ltd. (MDA-T) after hosting a group of investors for a tour of its Montreal facility and a discussion with its leadership team, believing “the current stock price does not fully reflect the company’s growth potential.”
“What a time to have one of the world’s largest and most advanced satellite facilities,” he said in a client note. “The global space market is expected to grow from roughly US$636-billion in 2025 to US$1.8-trillion by 2035, while lower launch costs should help support the 40,000–50,000 satellite launches over 2025–34. Against this backdrop, MDA’s addressable opportunity has expanded meaningfully, with its five-year bidding pipeline doubling to C$40-billion-plus. Meanwhile, rising defence budgets across the globe, combined with programs such as Golden Dome, Germany’s next-generation satellites and SSA initiatives, Korea’s K-LEO opportunity, and MDA’s SHIELD qualification, reinforce our positive view."
Mr. Poirier sees MDA’s Aurora platform as “a key differentiator” moving forward.
“It offers software-defined capabilities, digital beamforming, in-house ASIC chips, strong anti-jamming functionality and among the lowest estimated costs per sellable bit,” he explained. With competitors unlikely to deliver comparable technology for a few years, MDA appears well-positioned to capture demand from nations seeking sovereign space infrastructure with urgency. Following the recent pullback in space stocks, we view MDA’s current setup as a great opportunity, supported by a clean balance sheet and its ability to convert large C$1-billion-plus constellation opportunities."
Believing its current valuation does not properly recognize its “competitive advantages,” Mr. Poirier increased his target for its shares to $66 from $55, keeping a “buy” rating. The average is $62.51.
“The tour reinforced our view that MDA is well positioned to capture the high-growth constellation cycle, given its differentiated technology and new manufacturing capacity. As a result, we believe MDA deserves to trade at a sweet spot between established space/defense peers and new space technology peers. Our target is derived from the average of three valuation methods: (1) 38 times our 2027 estimated EPS (was 32 times); (2) 22 times our 2027 estimated EBITDA (was 17.5 times); and (3) DCF of $68.68,” he said.
After “positive first impressions” of Equinox Gold Corp.’s (EQX-A, EQX-T) $7-billion, all-stock offer for Orla Mining Ltd. (OLA-T), RBC Dominion Securities analyst Josh Wolfson says his view is “now more balanced.”
“We see mixed valuation implications, while high growth is maintained at a now larger scale.”,” he said in a report titled Building critical mass at a slight cost.
“We calculate the deal is 5-per-cent dilutive to NAVPS. On a near-term operating basis, the deal is accretive over 2027–30 2 per cent production per share, 4 per cent cash flow per share, and 2-per-cent EBITDA/EV, although this reverses longer-term from OLA’s proportionally lower growth. A complementary FCF profile is the most positive valuation aspect of the deal—OLA provides front-loaded FCF when EQX growth capex is elevated, while EQX’s development pipeline provides higher growth and FCF upside long-term. RBC FCF forecasts are below pro forma consensus, which we believe reflects the full inclusion of EQX-OLA’s extensive instruments (convertible debt issues, warrants, gold payables, streams), plus pro forma high forecast G&A, exploration, capex, and cash taxes. Key potential upside to our forecasts beyond gold prices relates to successful project execution, plus exploration success beyond our base case expectations."
Due to lower estimates and “modestly lower target multiples to reflect integration uncertainty,” Mr. Wolfson reduced his target for Equinox shares to US$14 from US$17, maintaining an “outperform” rating. The average is US$20.75.
At current valuation at spot gold, EQX-OLA screens fairly vs. peers,“ he said. ”Shares trade at a P/NAV of 1.02 times, and 2027-28E EV/EBITDA of 4.5 times, P/CF of 5.4 times, and FCF yield of 6.8 per cent, while operating valuation successively improves over time as growth upside is realized. Pro forma, EQX-OLA retains the highest torque to gold across peers. In a deeper correction, valuation would be disproportionately negatively impacted, although we see limited business risks unless gold prices decline to $3,000/oz. In our view, execution remains a key ongoing focus point, including across ramp-ups (Greenstone, Valentine) and upcoming projects (Valentine II, S Railroad, Castle Mtn II)."
While deeming its second-quarter financial results as “mixed,” RBC Dominion Securities analyst Drew McReynolds continues to expect a “solid” second half of 2026 for Transcontinental Inc. (TCL.A-T).
“Despite adjusted EBITDA being down 3.8 per cent year-over-year in H1/26, F2026 guidance of stable adjusted EBITDA was reiterated with the improved H2/26 outlook driven by: (i) low single-digit organic revenue growth for ISM (versus flat in Q2/26); (ii) initial traction from the national rollout of raddar beginning the week of June 15 (11.6 million copies reaching 3 of 4 Canadians across 537 zones); (iii) the renewal of newspaper outsourcing contracts (Postmedia, Glacier Media) adding more than $5-million in additional revenues through F2026; (iv) a strengthening new sales pipeline with book printing helping to mitigate a tough F2025 comparable; (v) strong educational publishing seasonality in the back half; and (vi) ongoing cost efficiencies with the reduction in corporate costs following the sale of Packaging on track to hit the targeted run-rate within 6-12 months as the ProAmpac services agreement tapers off,” he said.
Mr. McReynolds emphasized a return to growth remains the primary catalyst for the Montreal-based printing company from an investing perspective.
“Following the sale of Packaging, the focus has shifted to the extent to which the remaining asset mix (Retail Services and Printing, Books and Education) can return to sustained positive revenue and EBITDA growth, which in our view, remains the primary potential re-rating catalyst for the stock,” he explained. “While the timing of any inflection point on growth remains unclear to us, we would not rule out F2027 or F2028 reflecting the likelihood of additional growth-accretive tuck-in acquisitions within In-Store Marketing (ISM), the absence of Canada Post strike impacts, the realization of corporate cost reductions following the sale of Packaging, and other pockets of growth (raddar, educational publishing, book printing). In the meantime, we expect investors to continue to benefit from ongoing capital returns (dividends, share repurchases) building upon what have been two special dividends amounting to $21/share paid over the F2024-F2026 period (including a reduction of stated capital).”
While touting “a healthy FCF and capital return set-up,” the analyst lowered his target for Transcontinental shares by $1 to $8, remaining above the $7 average, after “factoring in a slightly lower revenue growth trajectory for Retail Services and Printing (and a related trimming of our target multiple.”
He kept an “outperform” rating.
“Management continues to expect strong FCF generation for F2026 (reiterating $55-$60-million in capex with some reversal to the H1/26 working capital drag) with net debt/EBITDA expected to be 1.75 times at year-end (versus 2.14x at Q2/26, or slightly less than 2.0 times proforma the $35-million sale of the Boucherville facility),” said Mr. McReynolds. “With the Board declaring a $0.05/share quarterly dividend, a targeted leverage range of 1.0-2.0 times and two pending noncore asset sales (Saint-Hyacinthe, Tomah) remaining in the pipeline, management continues to look for tuck-in acquisition opportunities (particularly within ISM).”
In other analyst actions:
* Seeing “more room to run,” BMO’s John Gibson upgraded Badger Infrastructure Solutions Ltd. (BDGI-T) to “outperform” from “market perform” and increased his target to $110 from $75. The average is $92.99.
“Despite its strong run (which we have admittedly been on the sidelines for), we believe BDGI’s runway for earnings growth remains very strong, as demand across its core U.S. markets continues to grow,” he said. “Further, data center work appears to be soaking up excess capacity.
“Based on this trajectory, we see the company conservatively doubling its business over the next decade.”
* Citing lower near-term cash flow, BMO’s Alexander Pearce lowered Champion Iron Ltd. (CIA-T) to “market perform” from “outperform” with a $4.50 target, down from $5.50. The average is $5.97.
“Following Champion’s recent FQ4/26 results, we’ve slowed the ramp up and price realizations for its DRPF product, reflecting expectations of lower near-term market appetite for this new, higher quality iron ore, as well as incorporating increased cost pressures,” he said. “While we recognize there are a number of positive catalysts over the next 12 months, our lower FY27/28 EBITDA (down 14/18 per cent, EV/EBITDA 6.0/5.7 times) and lower near-term dividends (less than 2-per-cent yield) mean the stock now appears reasonably priced.”
* Ahead of the release of its first-quarter results on June 12, TD Cowen’s Brian Morrison, who is currently the lone analyst covering Roots Corp. (ROOT-T), raised his target to $4.50 from $4.25 with a “hold” rating.
“We forecast modest DTC-led growth in Q1/F26 from strength in core products/new lines sustaining brand momentum. While near-term growth remains modest, flat-to-lower marketing spend year-over-year should support gradual profitability improvement through F2026. With shares currently in our ‘fair-value’ range, we believe expectations for a potential monetization event are increasingly priced in,” said Mr. Morrison.