Inside the Market’s roundup of some of today’s key analyst actions
With companies in his Industrial Products coverage universe continuing to see share price appreciation through the end of the third quarter alongside support for “further multiple expansion,” Scotia Capital analyst Jonathan Goldman sees “a number of positive themes emerging – acceleration of nation-building projects, increased defence spending, synchronized rate easing cycle, elevated commodity prices, visibility on trough earnings.”
However, in a research report title Party Like It’s 1999?, he also warned “a lot of potential upside is already priced-in, particularly for the equipment dealers and consumer cyclicals.”
“Moreover, we believe markets are minimizing risks related to ‘tariff-push’ inflation and USMCA renegotiation in 2026. Our advice is to position for the cheaper names (ADEN, ATS, NFI, SJ), event-driven catalysts (CEU, TVK), or companies with lots of B/S optionality and willingness for M&A (E&Cs),” he added.
“For the balance of the year, we recommend trimming dealers and being over-overweight E&Cs. M&A optionality is just too great and FOMO is too painful. Defensive attributes and secular trends are good hedges for uncertain economic environment.”
Mr. Goldman named Calgary-based CES Energy Solutions Corp. (CEU-T) as his “top pick” heading into earnings season , increasing his target for its shares to $10.25 from $9.59 with a “sector outperform” rating. The average raefer on the Street is $10.53, according to LSEG data.
“We see high probability the company wins a portion of large RFPs out with existing customers, which could support 5-per-cent to 10-per-cent upside to 2026 estimates,” he said. “Update expected with 3Q results. CES has reached sufficient scale to bid on these larger jobs that infrequently come up for tender while the Proflow acquisition in 2022 brought offshore capabilities, which is a prerequisite to bid on large on land jobs. The company has been hiring in advance of securing new work with headcount up more than 6 per cent year-to-date. That is artificially depressing margins. Shares trade at an 11.9-per-cent FCF yield on our 2026.”
Mr. Goldman said he also likes Stantec Inc. (STN-T) and WSP Global Inc. (WSP-T), raising his targets to $161 and $308, respectively, from $160 and $306 with “sector outperform” recommendations for both. The averages are $162.45 and $313.21, respectively.
“We expect sequential improvement in U.S. organic growth and sustained momentum in other regions,” he explained. “There is room for margins to surprise to the upside. Low leverage and increasingly bullish tone around M&A is a potent combination. STN is more likely to act in the near-term, but WSP shares have lagged CAD peers by a wide margin YTD.”
The analyst’s other target revisions are:
* Adentra Inc. (ADEN-T, “sector outperform”) to $40 from $39. The average is $44.69.
Analyst: “We updated our estimates to reflect 3Q actuals, namely housing starts. We think it will take more than a 25 bp cut to spur a housing recovery amid elevated home pricing and 30-year mortgage rates. We estimate the recent S232 announcement will upsize ADENTRA’s tariff exposure to 20 per cent of product mix at 15-20-per-cent tariffs, from 14% of mix at 16% previously. That said, we believe the company will be able to pass through higher costs and gross margins have been resilient in the mid-21-per-cent range for several years. While the timing of a housing recovery is unclear, we view the next catalyst as inventory destocking and deleveraging in 4Q and reacceleration of M&A in 2026. We forecast net debt to EBITDA (ex leases) of 2.6 times exiting 2025 vs. 3.0 times in 2Q and the comfort range of 2 times to 3 times. ADEN shares trade at 6.9x EV/EBITDA on our 2026E, in-line with the company’s 10-year average of 7.0 times and commoditized building products distribution peers at 7.1x. We believe the company has structurally improved earnings power since 2019, underpinned by mix shift to specialty products and away from commoditized lumber.”
* Finning International Inc. (FTT-T, “sector outperform”) to $71 from $64. Average: $67.44.
Analyst: “For FTT, we expect fairly stable end-market activity with last quarter including steady production growth in the oil sands production with E&Ps still making good money at cash opex of $20-30/bbl and no improvement in construction in Canada; steady copper production in Chile as the driver is more mine optimization and declining ore grades than commodity pricing; and no improvement in the U.K. LTIP should remain elevated given share price appreciation albeit slightly less pronounced than last quarter. Putting it altogether that suggests EPS flat to slightly up from last quarter at $1.01. Upside to our numbers could come from cost reduction initiatives while record backlog of $3 billion, including 1/3 in power systems, is supportive of valuation.”
* Linamar Corp. (LNR-T, “sector perform”) to $83 from $80. Average: $80.33.
Analyst: “We are in line for LNR with Mobility offset by Ag weakness. We made offsetting changes to our 3Q estimates: higher sales (particularly Mobility), but lower margins (particularly Ag). We also added the recent acquisitions of George Fischer (Leipzig Facility) and Aludyne (Select NA Assets), which combined we estimate will contribute sales of $1.2 billion or 10 per cent to our 2026 (on an annualized basis). Shares are inexpensive trading at 3.1 times EV/EBITDA. We see the NCIB as the best way to surface value, but with the bulk of 2025 FCF deployed towards acquisitions, we think the buyback may be on the backburner.”
* Magna International Inc. (MGA-N/MG-T, “sector perform”) to US$47 from US$44. Average: US$47.34.
Analyst: “We expect an easy beat for MGA. Last quarter, the company said it expects to generate 35 per cent of full-year EBIT in 4Q, which implies more than 25 per cent in 3Q. That suggests a significant step-down in 3Q, down 15 per cent year-over-year, which we find difficult to reconcile given revenue growth (including FX tailwinds) and ongoing operational excellence initiatives. We would not qualify MGA shares as inexpensive trading at 5.0 times EV/EBITDA on our 2026E vs. the company’s 10-year average of 5.3 times. Shares are inexpensive on FCF (11.0-per-cent yield), but industry headwinds suggest downside earnings risk while elevated leverage (2 times adjusted debt to adjusted EBITDA) limits options to unlock value”
* Stella-Jones Inc. (SJ-T, “sector perform”) to $88 from $81. Average: $88.13.
Analyst: “Poles guidance seems mostly realistic; risk to Ties. In Poles, organic revenue guidance calls for LSD% [low single digits] for the balance of the year on a flat comp. The company reported a decline of 2.5-per-cent organic in 1H on a 12.0-per-cent comp. While we believe Utes are still dragging their feet on capex programs, the guide seems like a low bar. In Ties, guidance calls for LSD% decline. That implies +10% in 2H on a negative 1-per-cent comp while backfilling lost Class 1 volumes is lumpy. Margins seems reasonable as Pole PPI deflation decelerated in 3Q.”
* TerraVest Industries Inc. (TVK-T, “sector outperform”) to $171 from $176. Average: $179.33.
Analyst: “EnTrans estimates have been rebased but the investment thesis remains capital allocation. We forecast leverage (ex leases) of 2.5 times exiting F4Q, within the comfort range of 2 times to 2.5 times. TVK shares are down 17 per cent in the past two months, which provides an attractive entry point. At 11.9 times EV/EBITDA on our 2026 estimate, which excludes the U.S. Army contract, that is well below other compounders.”
* Toromont Industries Ltd. (TIH-T, “sector perform”) to $171 from $140. Average: $152.22.
Analyst: “For TIH, we struggle with valuation, which has expanded 6 times year-to-date to 24.2 times P/E (NTM [next 12 months]), compared with the company’s 10-year average of 20 times. Part of that is warranted, in our view, given exposure to data centres via AVL and CIMCO, which provides data centre cooling solutions. The company is doubling capacity at AVL, which we believe is significantly margin accretive, while we forecast CIMCO growing at a 15-per-cent CAGR [compound annual growth rate] over the next two years. However, we believe a larger portion of the re-rate is driven by supply and demand factors as Toromont is considered a flight to safety and there is a paucity of high-quality cyclicals in Canada with a stellar track record and enormous B/S optionality. We raised our target price to $171/share (from $140/share) supported by a higher valuation multiple.”
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TD Cowen analyst Cherilyn Radbourne is “somewhat cautious” on Canadian heavy equipment dealers heading into earnings season, believing near-term conditions remain “fluid”.
“We see an improving medium- to long-term growth trajectory: 1) strong new equipment sales (2021-2025E) provide visibility to a future product support annuity; 2) there is a long runway of opportunities in power, related to data centres, distributed power, and natural gas as a transition fuel; and 3) the establishment of a Major Projects Office to expedite large infrastructure projects in the national interest is positive,” she added. “The initial list of 5 major projects skews west vs. east, but the broader list spans Canada. We have increased our target multiples for Finning/Toromont and rolled forward our price target horizon to the 12 months ending 9/30/2027 for all 3 companies.
“[Bellwether] Caterpillar is hosting an Investor Day on November 4. We anticipate a focus on 1) growing the services business; 2) new technology; and 3) the energy transition, which stimulates demand for key commodities/expands the addressable market in power. Caterpillar has always credited its dealer network as a competitive advantage, and we believe the company is increasingly reliant on large, sophisticated, well-capitalized dealers like Finning/Toromont to achieve its strategic objectives.”
Ms. Radbourne made these target changes:
* Finning International Inc. (FTT-T, “buy”) to $81 from $69. Average: $67.44.
Analyst: “Finning has enjoyed approximately 5 turns of P/E multiple expansion year-to-date, but the starting point was low, and the increase has been supported by improved execution. Our price target is now based on 16.5 times, which is just slightly above where the stock currently trades, and well within the 10-year range.”
* Toromont Industries Ltd. (TIH-T, “buy”) to $179 from $154. Average: $152.22.
Analyst: “Our price target on Toromont is now based on 25 times, which is somewhat above its 10-year range, but we are comfortable with a premium, based on our sector outlook and view of Toromont as a core industrial holding.”
* Wajax Corp. (WJX-T, “hold”) to $25 from $24. Average: $24.50.
Analyst: “Wajax has leverage to the same trends as Finning/Toromont but plays in a somewhat smaller equipment size, and we would like to see Wajax’s balance sheet leverage and inventory levels decline before turning more positive.”
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RBC Dominion Securities analyst Paul Treiber says data from several third-party sources suggest Shopify Inc.’s (SHOP-N, SHOP-T) growth momentum and market share gains continued through the third quarter.
That leads him to conclude both results for the quarter and guidance for the fourth quarter are are likely to slightly exceed consensus expectations on the Street.
“Due to the U.S. Federal government shutdown, U.S. retail sales data is not available for September,” explained Mr. Treiber in a client note. “Assuming U.S. e-commerce sales growth in September was similar to July and August (up 8.0 per cent year-over-year), e-commerce sales in Q3 strengthened vs. Q2 (6.7 per cent Y/Y). The delta between Shopify’s actual GMV [gross merchandise volume] and U.S. commerce last quarter suggests Shopify’s Q3 GMV grew 32.0 per cent Y/Y to $92.0-billion, above consensus at $89.1-billion (up 27.8 per cent Y/Y) and RBC at $89.6-billion (up 28.5 per cent Y/Y).
“Data points indicate healthy merchant growth and market share gains. Store Leads data indicates Shopify’s Q3 total merchants rose 13 per cent Y/ Y and Shopify Plus grew 21 per cent Y/Y, both consistent with Q2. Moreover, Shopify appears to have gained share compared to key competitors. New enterprise wins include Dickies, Forever 21, and ALDO, among others, according to Store Leads. Apptopia shows Shop App MAUs [monthly active users] rose 29 per cent Y/ Y, strengthening from 26 per cent Y/Y in Q2.”
With that expectation of stronger-than-anticipated GMV, the analyst now thinks revenue and adjusted earnings per share may topped the consensus forecast by “a larger magnitude” than the average over the last 12 months “though the upside is likely to be less than Q2.”
“For Q4, we believe strong market share gains and e-commerce growth suggest Q4 guidance is likely to slightly exceed consensus, which currently calls for Q4 revenue up 26 per cent quarter-over-quarter, slightly below Shopify’s 3-year historical average (27 per cent).”
Believing the Ottawa-based company is “likely to sustain a premium valuation,” Mr. Treiber raised his target for its NYSE-listed shares to US$200 from US$170, reiterating an “outperform” recommendation. The average on the Street is US$161.21.
“Shopify is one of the most compelling organic growth stories in our coverage,” he said. “Shopify is trading at 16 times NTM EV/S [next 12-month enterprise value to sales], above its 3-year average (10 times, 6-16 times range) and above fast-growing SaaS peers (11 times), given strong growth momentum and investor enthusiasm regarding Shopify’s AI innovations. We are rolling forward the basis of our price target from calendar year 2026 estimates to CY27e. Our revised $200 price target is based on 15 times CY27e EV/S (15 times CY26e previously).”
“Given Shopify’s strong growth momentum and market enthusiasm for Shopify’s AI innovations, we believe the stock is likely to continue to trade at the high end of its 3-year historical range.”
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TD Cowen analyst Sean Steuart raised his rating for Cascades Inc. (CAS-T) to “buy” from “hold” on Friday, pointing to an increasingly constructive outlook for North American containerboard markets, led by capacity closures, and expected incremental positive momentum for the Bear Island containerboard mill capacity utilization.
“The magnitude of North American containerboard capacity closures in 2025 is expected to substantially outpace near-term demand weakness, leading to higher industry operating rates,” he added. “Rising packaging price realization expectations, improving capacity utilization at Bear Island, and ongoing robust tissue margins are expected to drive strong CAS FCF yields (11 per cent in 2025 and 22 per cent in 2026).
“Higher earnings forecasts are mostly tied to higher containerboard price forecasts. Net North American capacity closures in 2025 total 3.3 million tons (7 per cent of capacity at the end of 2024). This is expected to yield industry operating rate gains to 92 per cent this year and 96 per cent in 2026. We have raised our average 2026 price expectation for the containerboard benchmark by 4 per cent (up 6 per cent year-over-year), reflecting an expected imminent price increase initiative.”
Mr. Steuart raised his target to $12 from $10. The average on the Street is $11.08.
“The higher target price reflects a combination of increased midterm FCF estimates (mostly higher containerboard price realizations) and an expanded adjusted trend EV/EBITDA target multiple (to 5.3 times from 5.0 times previously),” he explained. “The latter is based on rising conviction that the Bear Island ramp up is gaining traction.”
In a separate report previewing earnings season for paper and forest products companies titled Darkest Before the Dawn, Mr. Steuart said he sees wood product prices at “unsustainable lows.”
"Our Q3/25 estimates are below consensus for most equities, and in most cases, we have lowered our forecasts through 2026 to reflect more conservative lumber and OSB commodity price expectations,“ he said. ”Given the extent of expected negative free-cash-flow generation in H2/25 (exacerbated by rising lumber duty deposit rates/tariffs), we believe that another round of lumber capacity cuts is imminent.
“Q3/25 forest product/packaging sector expectations: below consensus forecasts for most wood product and pulp equities. We expect weaker sequential (q/q) Q3/25 results for 9 of the 11 equities in our coverage set. In most cases, our Q3/25 forecasts are below consensus estimates. We expect that negative developments (lower lumber/structural panel/pulp prices, rising duty deposit/tariff rates) will offset the positives (unit cost improvement tied to discretionary capex). Material downside outliers: CFP, MERC, and WFG. We expect that CCL, CAS, and KPT Q3/25 results will meet, or slightly exceed, consensus expectations.”
Preparing for “tempered” guidance from most companies in his coverage universe, he made these target changes:
- Canfor Corp. (CFP-T, “buy”) to $15 from $17. Average: $15.83.
- Interfor Corp. (IFP-T, “hold”) to $10 from $12. Average: $14.67.
- KP Tissue Inc. (KPT-T, “hold”) to $10 from $9.50. Average: $10.13.
- Western Forest Products Inc. (WEF-T, “hold”) to $13 from $14. Average: $12.38.
- West Fraser Timber Co. Ltd. (WFG-N/WFG-T, “buy”) to US$90 from US$96. Average: US$87.33.
"Our top risk-adjusted picks: WFG, TCL.A, DBM, and CLW," said Mr. Steuart.
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In a research report previewing earnings season in Canada’s energy sector titled Focus on the signal, not the noise, Desjardins Securities analyst Chris MacCulloch warned the third quarter "provided limited clarity for producers ahead of 2026 capital budget decisions as commodity prices languished through the final weeks of summer."
“With respect to oil, WTI traded below US$65/bbl as OPEC+ stayed the course on supply hikes, which occurred in tandem with an easing of the geopolitical supply risk premium in the Middle East, partially counterbalanced by an escalation of the conflict in Ukraine,” he said. “Meanwhile, natural gas benchmarks traded lower across the board, with the brunt of the pain concentrated in western Canada as prompt AECO prices suffered a 40-per-cent collapse on the back of major export pipeline maintenance activity and a relatively slow ramp-up of LNG Canada Phase I.”
Mr. MacCulloch now expects “a sloppy quarter” from natural gas– weighted producers, pointing to an “extremely challenging price environment as AECO prices frequently traded in negative territory throughout much of September.”
“In response, some producers voluntarily elected to curtail production and acquire volumes on the spot market to meet pipeline commitments, which will result in noisy price realizations,” he added. “Incidentally, the lion’s share of the cash flow misses we expect relative to consensus are from natural gas–weighted producers, including AAV (11 per cent), TOU (10 per cent) and ARX (4 per cent). Meanwhile, we also anticipate a slight miss from ATH (4 per cent). Conversely, we expect cash flow beats from VET (11 per cent), NVA (10 per cent), TVE (7 per cent), SU (6 per cent), IMO (+5%), CVE (4 per cent) and FRU (4 per cent).
“Commodity price deck adjustments. We have maintained our 2026 WTI forecast of US$55/bbl, reflecting our continued expectation for a global supply glut in the face of aggressive OPEC+ supply additions and slowing economic activity. However, we have trimmed our WTI–WCS differential to US $11/bbl (from US$12/bbl) given structural tightness in global heavy oil markets and excess WCSB egress capacity, which supports producer cash flows in tandem with our weakened Canadian dollar forecast (to US$0.72/C$1 from US$0.74/C$1). We expect oil markets to begin tightening in 2H26, which drives our more constructive US$70/bbl 2027 WTI price deck, partially tempered by a more conservative US $12.50/bbl WTI–WCS differential and US$0.75/C$1 Canadian dollar forecast. Meanwhile, we retain our bullish outlook for refiners with an increased 2026 New York Harbor 3-2-1 crack spread forecast of US $25.00/bbl (from US$22.50/bbl), which we expect to moderate to US$20.00/bbl in 2027."
With his price deck and estimate adjustments, Mr. MacCulloch made a trio of rating revisions, upgrading these companies:
* NuVista Energy Ltd. (NVA-T) to “buy” from “hold” with a $20.50 target, up from $17. The average on the Street is $18.13.
Analyst: “Since our August 26 downgrade of the stock, NVA has delivered a 9.8% return, which has outperformed the S&P/TSX Capped Energy Index return of 0.9 per cent (excluding dividends). To state the obvious, we got the call wrong. Recall that our downgrade was partially commodity price–driven, which disproportionately weighs on NVA’s FCF generation given its elevated operational leverage, stemming in part from the heavy utilization of third-party infrastructure. While cautioning that the exact timing for the start-up of the CSV Midstream Albright plant and the subsequent ramp to full capacity remains an open question, we highlight that the expected conclusion of recent infrastructural hiccups should boost corporate production above the 100,000 boe/d level for the first time, with little remaining operational risk given that wells are already standing behind pipe. More importantly, the aforementioned sale of Paramount Resources’ 9.5-per-cent equity stake to an undisclosed buyer raises the intriguing possibility of a corporate bid, which would almost certainly command a healthy premium to the extent that NVA is one of few remaining larger-scale Montney condensate producers. We expect additional details on the facility start-up and future development plans with the quarterly update, which will likely include the release of the 2026 capital budget."
* Tamarack Valley Energy Ltd. (TVE-T) to “buy” from “hold” with a $7.75 target, up from $6.75 and above the $7.10 average.
Analyst: “Since our June 3 downgrade of the stock, TVE has delivered a whopping 35.4-Pper-cent return, which has outperformed the S&P/TSX Capped Energy Index return of 8.6 per cent (excluding dividends). Simply put, we got off the story far too early! Recall that our downgrade was primarily driven by our bearish view on oil prices heading into 2026, which disproportionately weighed on the company’s FCF generation relative to peers given its heavy oil–weighted production base and elevated balance sheet leverage. While we maintain our bearish view on 2026 oil prices, recent upward revisions to our estimates stemming from continued improvements in waterflood performance and non-core asset dispositions have better positioned TVE, with 2026 strip D/CF now tracking toward 0.7 times and sustaining capex requirements below $300-million. Moreover, we now see TVE achieving its $500-million corporate net debt target in 1Q27 based on current strip prices, which would support an acceleration of capital returns to shareholders to 80 per cent of FCF (from 60 per cent currently), consisting primarily of increased buybacks. Longer-term, we continue to view the company as a logical consolidator within the Clearwater given its relative size and renewed balance sheet strength, which now appears capable of supporting a transformative acquisition. In short, we expect TVE’s recent operational momentum to continue into 2026, which should drive further multiple convergence with HWX, its closest publicly traded peer."
Conversely, he downgraded Vermilion Energy Ltd. (VET-T) to “hold” from “buy” with a $12.50 target (unchanged). The average is $13.68.
“While we applaud the company’s transformation into a global natural gas producer through recent acquisitions and the shedding of non-core oil-weighted assets in North America, we see limited upcoming catalysts to support multiple expansion,” he said. “On the M&A front, although we believe the potential sale of the Central European assets and the acquisition of natural gas–weighted assets in the Netherlands or Germany would be positively received by the market to the extent that it would better focus the portfolio, we view these as longer-dated catalysts. We also expect increased competition for European deal flow, including from Tenaz Energy, which has achieved considerable success from its two most recent acquisitions in the Netherlands and Germany. Moreover, corporate debt levels remain elevated following the acquisition of Westbrick Energy, which could limit VET’s ability to execute accretive acquisitions within the context of a depressed equity valuation. Meanwhile, our updated forecast indicates muted production growth in 2026–27, particularly in the higher-netback international segment, which weighs on corporate FCF generation amid structural headwinds from backwardated European natural gas prices. Accordingly, we would await a more attractive entry point as we see better opportunities to deploy capital elsewhere in the sector.”
Mr. MacCulloch’s target price changes for large-cap stocks are:
- Cenovus Energy Inc. (CVE-T, “buy”) to $31.50 from $29. Average: $27.38.
- Imperial Oil Ltd. (IMO-T, “sell”) to $114 from $110. Average: $109.
- Suncor Energy Inc. (SU-T, “buy”) to $70 from $65. Average: $62.79.
- Tourmaline Oil Corp. (TOU-T, “hold”) to $69 from $66. Average: $73.98.
- Whitecap Resources Inc. (WCP-T, “buy”) to $13 from $12.50. Average: $13.33.
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Raymond James analyst Brad Sturges sees valuations for Canadian real estate investment trusts as “compelling in a rising M&A/privatization backdrop.”
He’s now projecting average third-quarter adjusted funds from operations per unit growth in the low-to-mid-single-digit range year-over-year, and expects Canadian Industrial, TSX-listed International Residential and Multi-Family Resiential REITs to outperform during the approaching earnings season.
“We are forecasting an 4-per-cent average 3Q25 AFFO/unit growth year-over-year (ex. micro-cap, early stage REOCs), which remains relatively consistent quarter-over-quarter with the average AFFO/unit growth year-over-year realized in 2Q25,” he said.
“Notably, we are forecasting above-average 3Q25 AFFO/unit growth to be generated by PROREIT (up 18 per cent), Flagship (up 16 per cent), Granite (up 13 per cent year-over-year), and Primaris (up 10 per cent year-over-year). By property sector, we are forecasting industrial (9-per-cent average year-over-year), TSX-listed international residential (5-per-cent average year-over-year), and Cdn MFR (5-per-cent average year-over-year) to generate above-average 3Q25 AFFO/unit growth year-over-year, while office (down 5 per cent year-over-year) REITs are forecasted to generate negative average AFFO/unit year-over-year . Last quarter, covered Canadian REIT/REOCs generated average 2Q25 SP-NOI growth of 4 per cent year-over-year (property sub-sector average range: up 1-6 per cent year-over-year), led by Canadian industrial REITs that realized average 2Q25 SP-NOI growth: up 6 per cent year-over-year. Looking ahead, we expect that 3Q25 SP-NOI growth year-over-year to be delivered by Canadian REIT/REOCs under coverage could remain in the low-to-mid single-digit range year-over-year (or around up 3-4 per cent year-over-year).”
In a client report released before the bell, Mr. Sturges downgraded Killam Apartment REIT (KMP.UN-T) to “outperform” from “strong buy” with a $21.25 target, down from $22. The average is $21.89.
“Our rating adjustment for Killam reflects a greater anticipated FFO/unit drag from the commercial vacancy at the REIT’s Westmount Plaza in Waterloo expected in 1Q26, which could take longer to backfill, and may require Killam to incur greater redevelopment capex,” said Mr. Sturges. “As such, we believe re-leasing of Westmount Plaza could act as a modest near-term valuation overhang in Killam’s unit price. That said, we argue that Killam still screens well given its: 1) estimated deep NAV discount valuation; 2) exposure to affordable Canadian rental markets, and 3) above-average SP-NOI growth prospects that is supported by the REIT’s embedded rent MTM growth opportunity (estimated at 13 per cent at June 30).”
Conversely, he upgraded Primaris REIT (PMZ.UN-T) to “strong buy” from “outperform” with a $18.25 target (unchanged). The average is $17.96.
“We believe that Primaris may benefit from several positive catalysts, including: 1) new anchor leases with credit-quality retailers that backfill vacant anchor GLA, at higher effective net rents versus prior in-place rents psf; 2) ongoing capital recycling initiatives that further enhances the quality of its Canadian enclosed mall portfolio; 3) an expected hike in its monthly distribution rate that historically has occurred around the time of its 3Q25 earnings release; and 4) the potential inclusion of Primaris into the S&P/TSX Canadian Dividend Aristocrats Index in early 2026 or 2027,” he said. “Following significant acquisition activity completed in the past couple of years, we believe Primaris could become more opportunistic in pursuing future Canadian enclosed mall purchases, which could reduce any potential overhang in its unit price related to investor concerns surrounding perceived selling pressure from the REIT’s Canadian pension fund mall vendors. After underperforming its Canadian retail REITs in 2025 year-to-date, we believe Primaris could be positioned for a near-term catch-up trade.”
Mr. Sturges added: "Our preferred Canadian property sector rankings are adjusted to: 1) Canadian retail shopping centers (up); 2) industrial (up); 3) Canadian MFR (down); 4) international residential (down); 5) storage (flat); and 6) office (flat). We believe Canadian retail and industrial REITs screen well for momentum, defense, and income. Further, TSX-listed international residential REITs screen well for event-driven opportunities, and Canadian MFR, and storage sectors for value."
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Ahead of third-quarter earnings season, CIBC World Markets analyst Stephanie Price made a series of target price adjustments to Canadian telecommunications stocks on Friday.
"Wireless pricing remained rational in Q3, including through back-to-school. That said, lower immigration continues to weigh on the sector and channel checks suggested slightly elevated device subsidies. We are expecting a 2.6-per-cent average wireless ARPU [average revenue per user] decline in Q3, a sequential improvement from trough levels. We are forecasting flattish Q3 year-over-year growth in both consolidated industry revenue and adjusted EBITDA,“ she said.
His changes are:
- Cogeco Inc. (CGO-T, “neutral”) to $61 from $64. Average: $88.
- Cogeco Communications Inc. (CCA-T, “neutral”) to $68 from $71. Average: $74.80.
- Quebecor Inc. (QBR.B-T, “outperformer”) to $49 from $46. Average: $42.33.
- Rogers Communications Inc. (RCI.B-T, “outperformer”) to $58 from $55. Average: $55.82.
- Telus Corp. (T-T, “outperformer”) to $25 from $24. Average: $23.
"Where We Differ From Consensus And Names We Like Heading Into Earnings: We are 3 per cent ahead of Street EBITDA expectations on Quebecor, which we believe is driven by our lower stock-based compensation estimates in the quarter," said Ms. Price. “We are also 10 per cent above the Street on BCE FCF estimates, which we assume is driven by our lower Canadian capex estimates. We see Quebecor as well positioned in the current environment, with current pricing levels accretive to overall ARPU and the company continuing to gain wireless share. We estimate that Quebecor will win 28-per-cent market share in Q3/25, up from 24 per cent in Q3/24.
“Valuations Attractive: The Canadian telecom sector is trading at 6.9 times EV/FY2 EBITDA, in-line with its two year average and below its 5 year average of 7.3 times. We see Rogers as attractive here, trading at a discount to its two and five year average valuation multiples.”
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In other analyst actions:
* Following a third-quarter revenue beat, Canaccord Genuity’s Carey MacRury increased his Altius Minerals Corp. (ALS-T) target to $40 from $38 with a “buy” rating. The average is $36.79.
* Believing “easing insurance cost drivers upstream should provide firmer footing," National Bank Financial’s Zachary Evershed raised his Boyd Group Services Inc. (BYD-T) target to $260 from $250 with an “outperform” rating.
"Despite pressure in recent trading sessions, BYD’s stock remains up 9.4 per cent since reporting Q2/25 results on August 12 (slightly outpacing the S&P/TSX Composite Index, itself up a blistering 9.1 per cent over the same period), as the first green shoots of positive same-store sales growth (SSSG) were well received by the market," he said. “As we look ahead to 2026 and roll our forecasts out to 2027, the most important question is whether positive SSSG [same-store sales growth] will persist and provide support for targeted margin improvement through operating leverage gains. Looking upstream and examining insurer cost drivers, we believe the setup is favourable for a material slowing in the decline of repairable claims, providing more stable footing off which we believe Boyd can deliver market-beating mid-single-digit SSSG.”
* Wells Fargo’s Sam Margolin initiated coverage of Canadian Natural Resources Ltd. (CNQ-T) with an “equal weight” rating and $47 target as well as Suncor Energy Inc. (SU-T) with an “equal weight” rating and $57 target. The averages on the Street are $52.97 and $62.79, respectively.
* In response to Thursday’s announcement of the $70-million sale of its digital media subsidiary to Creative Realities Inc. (CREX-Q), a U.S.-based digital signage company, National Bank’s Adam Shine increased his Cineplex Inc. (CGX-T) target to $14.50 from $13 with an “outperform” rating. Other changes include: BMO’s Tim Casey to $14 from $13 with a “market perform” rating and Canaccord Genuity’s Aravinda Galappatthige to $13 from $11 with a “hold” rating. The average is $13.79.
“The transaction is clearly positive due to the fact that it was likely circa $30-million higher than Street expectations in terms of realizable value for that asset. The divestiture strengthens CGX balance sheet, and supports capital allocation options, in particular buybacks. The sale is expected to close in the coming weeks, pending regulatory approvals.,” said Mr. Galappatthige.
* Several analysts resumed coverage of NexGen Energy Ltd. (NXE-T, NXE-N) following the close of its $950-million two-tranche equity financing. Those make target adjustments include: National Bank’s Mohamed Sidibé to $15.50 with an “outperform” rating, BMO’s Alexander Pearce to $16 from $15 with an “outperform” rating, Desjardins Securities’ Bryce Adams to $17 from $16.50 with a “buy” rating and Canaccord Genuity’s Katie Lachapelle to $18.50 from $16 with a “speculative buy” recommendation. The average is $14.40.
“This in our view materially improves balance sheet flexibility as the Rook I project advances toward federal hearings and early-works execution,” said Mr. Sidibé.
* Expecting its sales growth to accelerate and its business improvements to remain on track, National Bank Financial’s Vishal Shreedhar bumped his Pet Valu Holdings Ltd. (PET-T) target to $42, exceeding the $41.55 average, from $41 with an “outperform” rating ahead of the Nov. 4 release of its third-quarter results.
“We expect sssg to sequentially accelerate reflecting: (i) improvements in discretionary demand (narrowing gap between consumables and hardlines; high end of 2025 guidance reflects stability in discretionary demand), and (ii) ongoing momentum from Pet Valu’s commercial strategy (began in Q4/24; focuses on in-store additions to the discretionary basket),” he said. “We model EBITDA margin compression of ~190 bps y/y, primarily reflecting SG&A deleverage (higher y/y variable compensation accrual). Our review of recent peer commentary suggests: (i) Flattish pet adoptions (Pet Valu has indicated that its primary growth drivers are premiumization and humanization), (ii) Stabilizing industry backdrop (as suggested by a rational promotional environment), and (iii) Continued resilience in premiumization trends.
“Reiterating our thesis (1) We hold a positive view on PET, reflecting its strong business positioning, attractive industry characteristics and high returns on capital. (2) We anticipate solid growth in revenue, EBITDA and FCF. We believe that PET’s shares can continue to gain traction as it demonstrates consistent execution against its promise of steady sales and profit growth.”
* Following marketing meetings with TC Energy Corp. (TRP-T) chief executive officer François Poirier, TD Cowen’s Aaron MacNeil raised his target for its shares to $81 from $76 with a “buy” rating.
“Our positive investment thesis is based on a continuation of TC’s high visibility, high return and low-risk growth profile beyond current 2027 guide. We view the Q3/25 conference call and business update (in lieu of IR day) as consequential, and we expect that it will feature an extension of its growth profile by at least one year to 2028 and potentially longer,” he said.
* Canaccord Genuity’s Doug Taylor raised his Zedcor Inc. (ZDC-X) target to $7, topping the $6.39 average, from $5.25, keeping a “buy” rating.
"This week, we hosted Zedcor CEO Todd Ziniuk and CFO Amin Ladha for a series of investor meetings. The discussions reinforced our confidence in the company’s hyper-growth momentum as it continues to build density within its existing footprint and expand into new markets. While field-level sales continue to drive steady tower growth and align with the company’s tower growth guidance, investments in nationwide agreements with larger retail opportunities could unlock additional upside to an already aggressive growth model. With increased confidence in the growth trajectory over the short and medium term, slightly lower capex assumptions, and the benefit of improved balance sheet flexibility, we raise our target," said Mr. Taylor.