Inside the Market’s roundup of some of today’s key analyst actions
National Bank Financial analyst Patrick Kenny thinks Capital Power Corp. (CPX-T) is “validating U.S. recontracting upside” with a new long-term contract with improved economic terms for its Midland Cogeneration Venture with Consumers Energy in Michigan.
Under the deal announced Thursday, the Edmonton-based company extended the agreement for MCV, which is the largest natural gas-fired combined electric and steam generated facility in the U.S., to 2040, providing 10 years of incremental contracted revenue. The contract is expected to generate a gross increase in full year adjusted EBITDA for the facility of approximately US$100-million annually, which points to a 85-per-cent increase over current contract pricing.
“Overall, the recontracting success reinforces our value proposition thesis for the company’s fleet of natural gas-fired power generation as the MCV facility maintains grid reliability operating in the MISO region,” said Mr. Payne.
“Incorporating the recently inked long-term contract as part of its key strategic priorities, our 2026 estimated AFFO/sh [adjusted funds from operations per share] and D/EBITDA remain unchanged while our long-term AFFO/sh estimates (2030+) increase 5 per cent as the company validates upside related to re-contracting/extending further U.S. flexible generation assets, underpinning optimization and brownfield expansion opportunities across its fleet.”
With the agreement falling in line with the increase to his long-term estimates, Mr. Payne raised his target for Capital Power shares by $3 to $66, keeping an “outperform” rating. The average target on the Street is $67.42.
His sum-of-the-parts valuation rose to $65.50 from $62.50 in order to reflect “a higher quality/contracted cash flow profile across its U.S. FlexGen portfolio, as well as the company outlining its ongoing growth initiatives at its upcoming Investor Day on December 10th.”
Elsewhere, other analysts making target adjustments include:
* Scotia’s Robert Hope to $70 from $67 with a “sector outperform” rating.
“It’s hard not to be bullish on the power space when a 35-year-old natural gas generating plant in Michigan extends a contract for 10 years that will yield an 85-per-cent increase in EBITDA from the asset (starting in 2030). Capital Power has been speaking for some time about constructive conversations it was having with counterparties for adding / extending contracts at multiple U.S. facilities. Even still, this announcement for a new contract at Midland Cogeneartion (MCV) has significantly better terms than we were expecting. This not only highlights the value of CPX’s existing contracted and merchant assets in the U.S. assets (4 GW contracted, 2 GW merchant), but also the strong fundamental outlook for the North American power space. Our near term forecasts do not change given the new contract enters service in 2030. Our target price increases ... to reflect the higher longer term cash flow from MCV.”
* Desjardins Securities’ Brent Stadler o $80 from $75 with a “buy” rating.
“MCV’s U.S. recontracting announcement is the material catalyst we have been waiting for, and the capital-free initiative delivered,” said Mr. Stadler. “The transaction creates immediate shareholder value by increasing MCV’s contract term to 15 years and improving economics by 85 per cent. Longer term contractedness (game changing for gas) should drive multiple expansion and allow CPX to re-lever the asset, which should increase dry powder for more highly accretive gas M&A in the U.S..”
* ATB Capital Markets’ Nate Heywood to $68 from $60 with a “sector perform” rating.
“The announcement directly supports the thesis around increasing long-term demand for existing firm generation in the U.S., driven by ongoing coal retirements, electrification and data center developments. Additionally, we view the agreement as indicative of potential demand for CPX’s other upcoming recontracting opportunities across its U.S. gas generation portfolio. For context, we estimate that a 50-per-cent EBITDA increase on remaining contracted U.S. gas assets could provide $200-million of incremental EBITDA through similar recontracting efforts,” said Mr. Heywood.
* TD Cowen’s John Mould to $72 from $69 with a “buy” rating.
“We believe the EBITDA uplift was ahead of investor expectations, and MCV was not viewed as the nearest term recontracting opportunity. CPX has 2.2 GW of additional U.S. gas-fired capacity with PPAs expiring in 2030-32 and 1.1 GW with gradually expiring RA contracts (2029),” he said.
=====
Stifel analyst Justin Keywood believes the market is “fundamentally under-appreciating” the “significant, highly-visible, and long-tailed opportunity” brought by Canadian healthcare infrastructure-like plays.
“Canada’s population has grown the fastest among G7 nations in recent years, as the population ages, creating substantial pressure on the public health system. While this is not news, policymakers are only now waking up to the magnitude of the strain, evidenced by $50-billion-plus in new government Healthcare investment announced this year,” he noted.
“We therefore highlight three undervalued Canadian healthcare infrastructure-like plays, CRRX, KBL, and WELL. Each stock is uniquely exposed to affected markets. Our analysis follows the recent acquisition of Andlauer Healthcare by UPS at 14 times LTM [last 12-month] EBITDA/23 times FCF, an attractive premium, helping validate the value in Canadian healthcare infrastructure plays. We see fair value being realized as dollars, and dentures, enter the system. The defensiveness of Canadian Healthcare also provides downside protection, with upcoming catalysts for each idea to unlock valuation, more near-term.”
In a research report released Friday, Mr. Keywood upgraded his recommendation for CareRx Corp. (CRRX-T), a Toronto-based provider of pharmacy services to seniors living and other congregate care communities, to “buy” from “hold” previously, believing the “Ontario government-sanctioned bed additions meaningfully changes CareRx’s growth calculus through 2028.”
“CareRx is a pure-play Canadian specialty pharmacy model servicing Canadian Long-Term Care (LTC),” he said. “While we have lately maintained a fairly reserved stance on the stock, encouraging discussions with management and a recent site visit have renewed our conviction in the story and specialty pharmacy more broadly, buttressed by an acute government focus on the company’s niche sector where it enjoys the largest share of the Canadian market. Our renewed investment thesis is supported by the Ontario Government’s plan to add/modernize 58,000 Long-Term Care (LTC) beds before 2028. The dedicated program under the Ontario Ministry of Long-Term Care known as the Capital Funding Program (CFP) states the to-date completion of 5,982 beds, 17,995 more currently under construction and 34k still to be awarded.
“While a sluggish topline in 2024 had kept the stock range-bound, and despite more recent strength in shares, we would argue that forward-looking growth expectations remain largely dismissed. We remind investors that CRRX’s growth calculus is fairly linear and predictable, where drug dispensing and clinical pharmacy services for LTC are billed on a per-unit basis with effectively a multiplier on the quantity of beds serviced. Regulatory conversations are accelerating across provinces to allow for greater reimbursement rates on additional clinical services the Company is already equipped to provide, CRRX has averaged $1,000 revenue/bed since 2020. Typically, each new bed adds $4,000 in annual revenue and $400 in EBITDA. A conservative 50-per-cent capture of the 50,000 incoming beds values CRRX at atleast $4.10/shr (up 20 per cent from current levels) via our DCF. Any additional share of the new beds is upside in the stock to potentially $5.00/share in our analysis, with room to move higher on M&A and additional organic bed wins. We believe shares do not fully reflect the stock’s bullish long-term prospects as a steady organic and consistently profitable growth story re-emerges. As such, we expect momentum in shares to continue.”
His target for CareRX shares rose to $4 from $2.25. The average target on the Street is $3.96.
Mr. Keywood kept a “buy” ratings for Andlauer Healthcare Group Inc. (AND-T) and K-Bro Linen Inc. (KBL-T) with targets of $59 and $50, respectively. The averages are $55.80 and $50.67, respectively.
=====
Believing it is “at the forefront of the IP/digital and cloud transition in media,” RBC Dominion Securities analyst Paul Treiber initiated coverage of Evertz Technologies Ltd. (ET-T) with a “sector perform” recommendation on Friday, seeing it “well managed, averaging 30-per-cent ROIC [return on invested capital] and consistently returning excess FCF to shareholders in the form of dividends, despite low-single digit organic growth.”
“Evertz is a global leader in broadcast and media technology solutions,” he said. “With the shift from linear broadcasting to digital, Evertz has helped enable the industry’s transition to IP/digital, given its development of software-defined video networking solutions, cloud-based software, and 4K/8K ultra high definition solutions. The company’s customers include Amazon, HBO/WarnerMedia, Disney/ESPN, and Google DeepMind, among others.
“Evertz has averaged 30-per-cent ROIC over the last 10 years, which reflects well managed operations (24-per-cent adj. EBITDA margin avg.) and prudent capital management. The company has returned the majority of FCF to shareholders through dividends. Executives and the board own 64 per cent of shares, ensuring high alignment with shareholders. We forecast Evertz’s ROIC to decline slightly to high 20-per-cent range, but is still sufficient to fund continued dividend growth.”
In a research report titled Relevant in a digital world, Mr. Treiber expressed concern over the Burlington, Ont.-based company’s low-single digit organic growth over the long-term, emphasizing Evertz’s revenue has “experienced significant cyclicality at times.”
“Revenues dropped 21 per cent in FY21, before rebounding 29 per cent in FY22. Despite revenue cyclicality, Evertz has averaged 3.9-per-cent organic growth over the last 10 years. We believe cyclicality is likely to decline going forward, as reoccurring software and services revenue now accounts for 46 per cent of total revenue as of Q1/FY26. We forecast 4.1-per-cent organic growth between FY25 and FY27e.”
Expecting its valuation to “likely to remain in line with historical averages,” the analyst set a target of $12 per share. The average target is $13.56.
“Evertz is trading at 14.5 times NTM [next 12-month] P/E, which is 18 per cent below peers (18 times) and 1 per cent below its 10-year historical average (14.7 times). Evertz has averaged a 5-per-cent discount to peers over the last 10 years, given the company’s smaller market cap. We believe Evertz’s valuation fairly values the company’s long-term growth prospects. The stock is trading at an 10.6-per-cent FCF yield on our CY26e estimates, which is likely to equate to its dividend yield over time.’
“We believe multiple expansion is likely limited unless organic growth materially accelerates. Our $12.00 price target is based on 14 times CY26e P/ E and assumes Evertz’s valuation multiple remains near current levels, as we forecast organic growth to remain effectively in line with Evertz’s historical average. Our target valuation multiple is justified below peers, given the company’s historical discount to peers and smaller size.”
=====
Stifel analyst Martin Landry thinks Gildan Activewear Inc. (GIL-N, GIL-T) currently possesses an “appealing valuation” and its “strong earnings power should catch investors’ attention.”
“In August, Gildan announced a definitive agreement to acquire HanesBrands in a transaction valued at $4.4-billion. According to our calculations, this acquisition is highly accretive, boosting Gildan’s 2026 EPS by 18-22 per cent,“ he explained. ”Despite the potential of this deal, shares of Gildan have risen only 6 per cent since August 11, outperforming the S&P/TSX Consumer Discretionary Index by just 3 per cent.
“We believe the risks of the transaction not closing are limited given its friendly nature and limited antitrust concerns. The companies have complementary expertise, products and distribution channels, strengthening the rationale for the deal. The acquisition increases Gildan’s EPS growth rate, and we calculate an earnings power in excess of $6.50 when the synergies are fully realized in 2028. This raises the question, why haven’t Gildan’s shares appreciated more?”
In a research report released before the bell, Mr. Landry examined reasons for the acquisition’s lukewarm reaction, concluding “investors accumulate shares of Gildan.”
“Why are Gildan’s shares range-bound?,” he asked. “1. Consensus estimates exclude proforma figures. Consensus 2026 EPS estimates on FactSet stand at $3.86, with several higher estimates excluded from this calculation. Our 2026 EPS estimate of $4.72 is on a proforma basis assuming the transaction closes on January 1st 2026 and is 22 per cent higher than consensus. We expect consensus to rise materially as other analysts include the HanesBrands acquisition in their forecasts.
“2. Investors awaiting closing of the transaction. We believe that some investors are awaiting the closing of the transaction to have certainty of occurrence. Some investors may be delaying their analysis to after the closing of the transaction. Hence, we see the closing of the transaction as a catalyst for the shares to move higher.”
Mr. Landry also also sees four key investor concerns that may be weighing on Gildan shares: uncertain long-term growth prospects stemming from skepticism that it can " reverse HanesBrands’ trend of declining revenues"; a lack of clarity on HBI’s management depth and succession planning; concerns about the capacity to integrate HBI and HBI’s “challenged track record with management missing expectations for several years.”
While calling Gildan a “well entrenched business with strong competitive advantage” that generates “solid” free cash flows with “heathy” earnings growth, Mr. Landry increased his share count projection to reflect an issuance following the close of the transaction, while he reduced his revenue contribution estimate from HanesBrands to “reflect recent trends and to remain conservative.” That led to a 6 per cent drop in his 2026 earnings per share forecast.
He maintained a “buy” rating and US$75 target for Gildan shares. The average on the Street is US$70.10.
=====
After a recent analyst tour of its properties in Vancouver, Desjardins Securities analyst Kyle Stanley reduced his funds from operations forecast for Canadian Apartment Properties Real Estate Investment Trust (CAR.UN-T) to reflect a “more subdued revenue growth given ongoing apartment market challenges.”
“However, CAR’s relative unit price underperformance, trading liquidity and focus on its NCIB likely offer near-term mean reversion upside as the rate-cutting cycle restarts,” he added.
In a client note released Friday, Mr. Stanley argued the CAPREIT’s portfolio high-grading has “translated into improved cash flow” as its portfolio exposure to new-build assets continues to expand. He added “the reduced capex burden from these newer-build assets, combined with a shift in capital allocation strategy to a focus on maximizing cash flow, has translated into lower spending and an improving retained free cash flow profile,” and he’s now projecting 5–8 per cent lower capex annually, which “results in a modest funding.”
“New disclosure provided by CAR highlighted 2Q25 turnover by lease tenure — with just 20 per cent of the portfolio leased at rental rates more than $2,000/month, CAR’s portfolio is quite affordable,“ he added. ”However, 50 per cent of the leases that turned in 2Q25 had a tenure of less than 2 years, with new deals generating a negative 6-per-cent rental spread. While blended leasing spreads should remain positive given the embedded mark-to-market opportunity of longer duration leases, we have trimmed our revenue growth assumption to reflect this near-term softness, translating into a 1–2-per-cent decline in our FFOPU outlook.
“Subdued revenue growth to limit near-term margin enhancement. We have previously highlighted that opex containment could offer a unique NOI growth opportunity relative to peers in 2026; however, given the subdued near-term revenue growth outlook, we expect largely flat NOI margins through our forecast period.”
Maintaining his “buy” rating, Mr. Stanley reduced his target to $48 per unit from $50 alongside cuts to his FFO projections through 2027. The average is currently $50.20.
Elsewhere, RBC’s Jimmy Shan reaffirmed his “outperform” rating and $54 target.
“There was nothing materially new announced – the key messages were a reaffirmation of its strategy to recycle out of older non-core assets into newer built assets with Vancouver being a market in which this strategy is playing out, and a continued focus on cost control. The tour showcased its recent acquisitions in Vancouver, which, as expected, showed well, especially when it ended at the rooftop of its marquee asset, The Pendrell, overlooking English Bay," said Mr. Shan.
=====
In other analyst actions:
* In a research report titled Delivering Value Without Compromise, Raymond James’ Frederic Bastien initiated coverage of GDI Integrated Facility Services Inc. (GDI-T) with an “outperform” rating and $35 target, exceeding the $34.20 average on the Street.
"We begin our research coverage of GDI Integrated Facility Services with a healthy dose of humility, recognizing full well that in both life and investing, luck can sometimes trump precision. Currently, this quality company is navigating a complex environment, resisting the siren’s call to lower contract prices and overpay for acquisitions. While this steadfast approach has led to short-term pain and a sharply reduced stock price, we feel it has laid the groundwork for long-term value creation. Simply put, few competitors match GDI’s ability to seamlessly integrate janitorial and multi-trade services, and none rival its consistent service delivery. Our analysis has further established that GDI’s soft patch will soon pass, leaving investors with one of the most lopsided risk-return profiles across our coverage universe," said Mr. Bastien.
* Jefferies’ John Aiken raised his AGF Management Ltd. (AGF.B-T) target to $16 from $14.50 with a “buy” rating. The average on the Street is $15.50.
* Barclays’ William Grippin initiated coverage of GFL Environmental Inc. (GFL-T) with an “overweight” rating and $86 target as well as Waste Connections Inc. (WCN-T) with an “equal-weight” rating and $265 target. The averages are $71.19 and $277.97, respectively.
“Attractive & durable sector attributes support our Positive industry view, with recent sector pullback presenting selective buying opportunities. We see steady growth profiles with high FCF generation enabling capital redeployment flexibility (M&A/buybacks), underpinning long-term upside bias to estimates,” he said.
* Following the close of its $135-milion equity financing with proceeds set to help fund its US$115-million acquisition of Equinox Gold Corp.’s (EQX-T) Nevada assets, National Bank’s Rabi Nizami resumed coverage of Minera Alamos Inc. (MAI-X) with an “outperform” rating and 55-cent target, down from 65 cents. The average is 77 cents.
“The acquisition of Pan and Gold Rock are transformational to MAI, as the company stands to benefit from immediate cash flows from the producing Pan Gold mine during the currently strong gold price environment. The Company aims to use these case flows to organically support development of its pipeline of development projects in the United States and Mexico,” said Mr. Nizami.
* Stifel’s Ian Gillies reduced his Russel Metals Inc. (RUS-T) target by $1 to $48 with a “buy” rating. The average on the Street is $50.83.
“Russel Metals announced asset sales for two Western Canada locations and other asset rationalizations resulting in gross proceeds of $40-50-million. This completes RUS’ invested capital reduction plan for the acquisition of Samuel, Son & Co. We also updated our 3Q25E outlook given weak market conditions and restructuring costs related to the transaction. As a result, we have reduced 2025 EBITDA estimate by 1.2 per cent while 2026 remains largely unchanged,” he said.
* Coming off research restriction following its $112-million non-core asset disposition in eastern Alberta to a private company, CIBC’s Jamie Kubik increased his target for Tamarack Valley Energy Ltd. (TVE-T) to $7, exceeding the $6.90 average, from $6.25 with an “outperformer” rating. Others making changes include: Desjardins Securities’ Chris MacCulloch to $6.75 from $6.50 with a “hold” rating and National Bank’s Dan Payne to $7.50 from $7.25 with an “outperform” rating.
“A sound transaction by the company, which high-grades its assets towards best in class, and provides accelerating visibility towards augmented returns through the outlook; TVE is poised for a 15-per-cent return profile (vs. peers 12 per cent), on a leverage of 0.4 times (vs. peers 0.7 times), while trading at a 2026 estimated EV/DACF of 4.1 times (vs. peers 2.4 times),” said Mr. Payne.