Inside the Market’s roundup of some of today’s key analyst actions
Units of Allied Properties REIT (AP-UN-T) tumbled sharply on Thursday after the office real estate firm reported unexpectedly weak third quarter results that had management opening the door to a possible distribution cut in the near future.
Office markets have improved - but mostly just for higher-end buildings and much of this progress in leasing space has yet to trickle down to Allied’s portfolio.
Allied Properties units fell 17% after a 7% third quarter funds from operations miss, a meaningful downward revision to its 2025 outlook, delays in achieving leverage targets, and management hinting at the possible distribution cut.
Desjardins analyst Lorne Kalmar thinks the selloff in the REIT units may not over yet. He reiterated a “sell” rating while lowering his price target to C$15.50 from C$18.00.
“While the stock is off about 30% from its recent high and management commentary around market fundamentals was optimistic, we still see risks to the downside, particularly as we do not believe AP has reached trough earnings, and there is now a potential distribution cut looming,” Mr. Kalmar said in a note to clients.
Mr. Kalmar said the distribution reduction would be a prudent move given the soft operating environment for the office REIT and rising leverage metrics. “We estimate a 50% cut would allow AP to retain C$125m of cash annually. We note that in prior years, AP has updated its annual distribution policy in early December,” he said.
Meanwhile, “despite commentary on improving leasing trends, 4Q occupancy is forecast to remain flat sequentially, with management expecting a 50% renewal rate on remaining 2025 maturities (391,581sf). AP anticipates that occupancy will begin to recover in 2026, though it stopped short of providing any formal targets (full-year outlooks are introduced with 4Q results). We are forecasting funds from operations per unit to trough in 2026 at C$1.89 (-3% yoy; AFFO payout: 111%) before growth resumes in 2027 (+2%).”
Canaccord analyst Mark Rothschild said that while he views the cash retention plans positively, it clearly is negative for the near-term unit price. “We are taking down our target price to C$18.00 from C$22.00, although we continue to rate Allied a BUY. We believe that, notwithstanding poor performance from Allied, the office market is improving, and there should be greater clarity on the value of Allied’s portfolio over the next year,” Mr. Rothschild said.
Elsewhere, TD Cowen cut its target price to C$16 from C$20 and downgraded its rating to “hold” from “buy”.
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Analyst price targets are going up for Aecon Group Inc. (ARE-T) following stronger-than-expected third quarter EBITDA and bookings.
Canaccord Genuity raised its target price to C$40 from C$29 and reiterated a “buy” rating, while CIBC raised its target price to C$35 from C$29 - although CIBC also downgraded its rating to “neutral” from “outperformer.” Desjardins Securities raised its price target to C$35 from C$22 but it also downgraded its rating to “hold” from “buy”.
Aecon’s third quarter EBITDA of $93 million exceeded the consensus of $87 million. Revenue of $1.530 billion increased 20% year/year and was 10% above the consensus.
“The company is now just months away from putting the legacy LSTK [lump sum turnkey] contracts behind it,” commented Canacord analyst Yuri Lynk. “We estimate we could begin seeing clean quarters from Aecon as soon as Q2/2026, with positive implications for free cash flow conversion and valuation, in our view.”
“Our positive outlook is underpinned by record backlog, lower risk contracts, and ~$1 billion of recurring revenue. The stock, despite its recent move, is still cheap at 7.6x EV/EBITDA (2026E) versus North American peers at 12.5x. To set our target we are increasing our blended multiple from 6.4x to 8.0x applied to our 2027 Construction segment EBITDA estimate (previously 2026) before subtracting our Q4/2026 net debt estimate and adding $4.55/share for the concession assets. In our view, Aecon’s substantial nuclear and utilities businesses, accounting for 28% and 19% of trailing twelve month revenue, respectively, should eventually command higher valuations as investor’s attention transitions from LSTK to fundamentals,” Mr. Lynk said.
Desjardins analyst Benoit Poirier said his rating downgrade was made in light of the stock’s recent rally and rich valuation, as well as a lack of near-term catalysts.
“The shares have rallied 73% over the past three months, outpacing the S&P/TSX’s 10% gain, reflecting optimism around nuclear buildouts and nation-building agendas. However, many of the announced projects appear to be rebranded versions of existing plans (Darlington SMR was already in ARE’s backlog and Contrecoeur announced last year) and ARE has a lack of capacity for material growth in the U.S,” Mr. Poirier said. He thinks shares are now fully valued.
Elsewhere, ATB Capital Markets raised its price target to C$32 from $28 but it also downgraded its rating, going to “sector perform” from “outperform.” TD Cowen’s target went to C$39 from C$34. And Raymond James raised its target to C$33 from C$26 while downgrading its rating to “market perform” from “outperform”.
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RBC Capital Markets analyst Jimmy Shan downgraded Morguard North American Residential REIT (MRG-UN-T) to “sector perform” from “outperform”, seeing limited catalysts amid sluggish occupancies. His price target went down $1 to C$21.
“We have moderated our 2026 growth outlook primarily from lower occupancy assumptions, resulting in 26E FFO/unit growth of -1%. While we still view MRG as a mispriced stock appropriate for long-term minded value investors, we see limited near term catalysts that could drive the stock to outperform given our revised growth outlook and weak market sentiment on apartments on both sides of the border,” Mr. Shan said in a note to clients.
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TD Cowen analyst Graham Ryding raised his price target on Onex Corp. (ONEX-T) to C$165 from C$148.
The move follows news Thursday that the private equity firm is partnering with American International Group Inc. to buy property insurer Convex Group Ltd. in a US$7-billion deal, as the Toronto-based company pivots its balance sheet toward in-demand insurance assets.
The transaction will also see AIG, one of the world’s largest insurance companies, acquire a 9.9-per-cent stake in Onex for US$600-million.
“We view the Convex acquisition and AIG partnership as a net positive,” commented Mr. Ryding in a note to clients. “The expected $15- $20mm of incremental Fee Related Earnings (within 3 years) should help bring more attention to the value of the asset management business. With Convex representing 42% of proforma NAV, the increased NAV visibility should lead to a tighter discount to NAV. Onex remains our top pick.”
Elsewhere, Scotiabank raised its target price to C$175 from C$153.
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Some price targets went up for Altagas Ltd (ALA-T). CIBC raised its target price to C$47 from C$46 while RBC raised its target to C$48 from C$44.
Commented RBC analyst Maurice Choy: “We believe investors continue to appreciate the favourable themes that AltaGas is exposed to, including rising Canadian energy exports (directly through its LPG facilities, and indirectly through LNG demandrelated implications, like higher Montney production and increased need for midstream services), the benefits of gas to meet North American energy demand, and system upgrades amid an aging utility system. Along with the reaffirmed 2025 guidance ranges, the 2026-2028 growth commentary, and MVP [Mountain Valley Pipeline] sale update in the coming weeks, AltaGas has a credible platform to deliver steady phases of growth through the end of the decade.”
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BMO cut its target price on MDA Space Ltd (MDA-T) to C$36 from C$40 and Scotiabank cut its target to C$40 from C$43. The actions followed a dive in MDA’s stock price Thursday which had prompted a temporary trading halt.
Commented Scotiabank analyst Konark Gupta in a note: “MDA shares have been underperforming over the past three weeks and were -16% on October 30. We believe speculations that Globalstar (GSAT) could be up for sale are driving this underperformance. These speculations started last week with an article from The Information and became more widespread yesterday when the media reported that GSAT has held initial discussions with SpaceX. The latter, in our view, has more substantially hurt investor sentiment given a recent deal between SpaceX and EchoStar (SATS) led to the cancellation of a US$1.3B satellite contract that SATS had awarded to MDA in August 2025. In other words, the market appears to be betting that MDA is likely to lose the GSAT contract, similar to the SATS contract. Although the two situations have a common element (SpaceX), we note some differences. Nevertheless, we believe the risk to MDA’s growth outlook has increased slightly with latest speculations. Thus, we are trimming our multiple to 14x (was 15x), which reduces our target to $40 (was $43). There could be further downside risk (or upside risk) depending on how the GSAT situation unfolds. We maintain our sector outperform rating, assuming status quo for backlog and upside from a robust contract pipeline."
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In other analyst actions:
At least 13 analysts raised their price targets on Amazon (AMZN-Q) after the ecommerce giant reported earnings late Thursday. The average price target is now US$273.77, up from US$264.77 a month ago, according to LSEG data.
At least six analysts raised their price targets on Apple (AAPL-Q) following its results late Thursday. The average target is now US$263.86, up from US$245.14 a month ago, according to LSEG data.
Cameco Corp (CCO-T): RBC raises target price to C$160 from C$110
Cogeco Communications Inc (CCA-T): TD Cowen cuts target price to C$95 from C$98; BMO cuts target price to C$70 from C$75; Scotiabank cuts target price to C$74 from C$75.5;
Spin Master Corp (TOY-T): CIBC raises target price to C$25 from C$23
Timbercreek Financial Corp (TF-T): Canaccord Genuity cuts target price to C$7.75 from C$8.5