Inside the Market’s roundup of some of today’s key analyst actions
National Bank Financial analysts Dan Payne and Travis Wood continues to see Canada’s energy sector as “a stock-pickers market” in 2026, pointing to upside in crude prices.
“2025 was a tale of two commodities with natural gas and crude prices going their separate ways (up 29 per cent and down 19 per cent in 2025, respectively),” they said. “Despite the divergent price action, Canadian energy equities once again offered opportunities for relative outperformance with our top picks last year returning a range of 0-110 per cent. This is in contrast to the energy index returning 12 per cent. This marks two years in a row where select equities have generated outsized returns versus the commodity (2025 top picks averaged a total return of 30 per cent), and underscores the basis of our investment thesis for 2026.”
In a client report released before the bell titled When Life Gives You Lemons, Make Lemonade, the analysts emphasized the impact of the turmoil in Venezuela is “very fresh and taking up increased mind share as investors try to get a sense of potential impacts on crude supply (what’s more important is the timing of those potential impacts).” They expect that uncertainty to linger and impact investment decisions.
“While Venezuela is estimated to have the largest global oil reserves, decades of underinvestment, dilapidated assets and a loss of technical horsepower over the past two decades has made the likelihood of a quick production response low,” they said. “In order for Venezuela to meaningfully ramp production from its current levels of 0.9 mmbbl/d [million barrels per day], we estimate at least $20-billion of initial capital is required to bring volumes to 1.4-1.5 mmbbl/d, plus a willingness from the supermajors and service companies to return to a high-risk operating environment (all this taking place in a low-price cycle environment). Given this narrative, we would expect at least 2–5 years would be required to see this type of supply impact.
“Although crude prices leave a lot to be desired, natural gas demand momentum remains topical, leaving the market trying to gauge the tempo and potential upside of AI-driven demand and North American LNG buildout. These tailwinds provide gas-weighted multiples an opportunity to expand over our forecast period and see FCF yields expanding next year.”
Accordingly, the analysts warn crude-linked equities now require “more of a soft touch” over the short-term given supply risk through the first half of 2026, but they said they would “buy the dip on more Venezuela news.”
“Although the returns were more muted in 2025, crude equities generally remained resilient to commodity woes and payout ratios remained healthy, but we believe it might be pragmatic to wait for crude markets to potentially sell-off further should the ‘inventory glut’ overshoot expectations,” they said. “Even though we believe we are around the bottom in terms of price (crude flirted with sub US$55 per barrel in December), we are in wait and see mode with all eyes on onshore inventory data and geopolitical turmoil over these next few months.
“Nevertheless, we see some ‘green shoots’ as it relates to broader interest as investors gain confidence in the long-term staying power of the Canadian energy space (although recent Venezuela news has temporarily spooked investors).”
The analysts updated their forecasts for the year ahead to reflect the volatility and rolled forward their valuation period to fiscal 2027. That led to updated target prices for many stocks in their coverage universe as well as a pair of rating revisions:
* Strathcona Resources Ltd. (SCR-T) to “outperform” from “sector perform” with a $32 target, down from $36. The average on the Street is $37.33, according to LSEG data.
Mr. Wood: “Following the announced distribution of $10/share and the repricing of the equity, we are upgrading Strathcona ... We believe Strathcona provides unique exposure through its operating structure as a pure play oil sands operator, where annual growth should average around 8 per cent over our forecast window. This growth, we expect, will be married with continued optimization across the portfolio and continue to showcase the operating capability of the team, as evidenced by the asset-level compression in SORs over the last several years.
“Based on our forecast, we expect a balanced approach from the company in terms of its uses of FCF over the near term, with funds flow earmarked for a combination of growth, continued debt repayment and funding of the sustainable dividend which currently yields 4.5 per cent. SCR trades at a current EV/DACF [enterprise value to debt-adjusted cash flow] multiple of 6.2 times vs. the peers at 5.8 times. Our revised target price of $32 implies a total return of 24 per cent.
* Freehold Royalties Ltd. (FRU-T) to “sector perform” from “outperform” with a $15 target (unchanged). The average is $16.10.
Mr. Wood: “We are downgrading Freehold ... following significant relative outperformance in 2025, leading to what we believe is a fair valuation trading at our target multiple of 10.0 times on an EV/DACF basis. Over the last year, Freehold outperformed its peers by more than 20 per cent, outpacing the broader energy index as well. In our view, Freehold continues to provide exposure to top plays in both the U.S. and Canada, however in the context of the current commodity price environment, we expect growth to slow in some regions, offset by continued optimization and technology advancements.
“We would flag Freehold as a unique way to maintain exposure for those seeking income through the sustainable dividend which currently yields 7.4 per cent compared to the Canadian peers (read PSK and TPZ) of 4.6 per cent.”
The analysts’ top picks for the year ahead are:
* Suncor Energy Inc. (SU-T, “outperform”) with a $72 target, down from $73. The average is $68.41.
Analysts: “Another year where we see continued margin expansion as both the upstream and downstream segments drift higher on throughput and optimization. Notably, we expect another year of beat and raise around guidance, showcasing the team’s ability to create value out of the portfolio and importantly, provide investors exposure to the downstream segment during what is likely to be another year of volatile oil prices. In advance of the spring update, we would be positioned to buy Suncor with the idea that the update will provide some transparency on the company’s initiatives to better integrate the downstream portfolio to advance margins across the assets, including the potential to integrate producing and non-producing assets into Base plant. In our view, Suncor remains “cheap”, trading at 5.0 times 2027 compared to its historical average of 7.5 times and CNQ of 5.2 times."
* Tenaz Energy Corp. (TNZ-T, “outperform”) with a $52 target, up from $34. Average: $52.
Analysts: “Don’t let the chart convince you that you’ve missed the trade. The high impact nature of the offshore wells that are to be on stream over the next several months provide impressive multiple compression, offering significant upside to the equity value as these relatively low risk wells produce into the TTF market. Into 2027, we expect capital and costs to compress meaningfully, providing exposure to expansion of both FCF and operating margins. For investors who can find a spot for a small cap, high growth, cheap global gas name, TNZ must find a home in the portfolio.”
* Topaz Energy Corp. (TPZ-T, “outperform”) with a $33.50 target (unchanged). Average: $31.75.
Analysts: “A volatile environment lends itself to the quality (best in class counterparties; high-grading to investment grade), stability (waterflood & infra provide represent 3/4 of cash flow and coverage of returns), visibility (definitive credibility of underlying programs) and upside (increments continue to be distilled; Clearwater waterflood + new plays & commodity upside, notably gas) of a proactive team (highly attuned to manifesting funded transactional growth). Totally comfortable with this name in any scenario, where the return & value proposition presents sound risk reward in a total return profile that is easily in the 10-15-per-cent range (5-per-cent yield, 5-10-per-cent organic growth & 5-10-per-cent funded transactional growth), and all of which remains differentiated to its peers.”
* Whitecap Resources Inc. (WCP-T, “outperform”) with a $15 target (unchanged). Average: $13.83.
Analysts: “Remains a top investment idea for 2026 where our thesis remains centred on continued execution out of its high impact Duvernay and Montney portfolio, supported by stable production and FCF out of the eastern assets. Valuation in our view is the opportunity for investors to capture alpha in 2026 with WCP trading at a 28-per-cent discount to its historical average (10-year average) and a 3-per-cent discount to its peers. We continue to flag the dividend as sustainable on a payout basis with just 26 per cent of CF in 2026 required to fund the dividend, leaving $440 million of FCF to fund what we think will be an increased pace for the buyback given intrinsic value within the name today. Other operational drivers worth noting is the expected growth out of its Montney portfolio where the company will bring on-stream low capital efficient volumes, which will be optimized through spare processing capacity across the region. By the end of this year, we forecast gas volumes will near 1.0 Bcf/d, leaving the company well positioned for what we believe will be an improving natural gas backdrop into next year.”
For senior producers, the analysts’ other target changes are:
- Athabasca Oil Corp. (ATH-T, “outperform”) to $9 from $8.50. Average: $7.63.
- Canadian Natural Resources Ltd. (CNQ-T, “sector perform”) to $47 from $48. Average: $54.51.
- Cenovus Energy Inc. (CVE-T, “outperform”) to $29 from $28. Average: $31.36.
- Imperial Oil Ltd. (IMO-T, “sector perform”) to $127 from $125. Average: $109.88.
In a report released concurrently on oilfield services providers, Mr. Payne argued “the only certainty is stability” for 2026, emphasizing commodity prices and upstream activity is “structurally entrenched” which should lead to earnings for the group that “prove a high-quality, industrialized flavor, to the positive outcome of free cash and return of capital.”
“Nothing wrong with that, particularly when paired with positive thematic narratives throughout (notably intensity, thematic tailwinds, including geopolitics, and reinvestment), and all of which is being met by the positive reception of multiple expansion,” he added. “Residually, and as previously suggested, if the market re-rate does not continue, we wonder whether the Canadian peer group will be the subject of increasing M&A as a means for global operators to backfill capacity (see, Venezuela) or earnings with the more resilient and discounted domestic opportunity.
“As such, while we still don’t think that the equities are going anywhere fast (in aggregate), given the set-up described, we do believe that the group and select names throughout will continue to experience positive price performance through an otherwise anemic outlook. We continue to advocate for tactical accumulation of best in class for an ultimate long-term value opportunity, and have revised our pecking order (again, biased against an almost universal neutral rating) as CEU, PD, TCW, EFX and PSI, based on a ranking of year-over-year equity & valuation performance and relative earnings & FCF momentum plus thematic tailwinds (see within), while we believe that the dispersion within this group remains very low (dealer’s choice remains).”
The analysts made these target changes to stocks in the industry:
* CES Energy Solutions Corp. (CEU-T, “outperform”) to $15 from $13. The average is $13.
Analyst: “We maintain high confidence in CEU’s business, where its highly entrenched offering should continue to gain traction through emerging thematics (intensity) plus expanding market share, as unique in an otherwise anemic activity landscape. Bottom line, its high-quality consumable chemicals business (increasingly competing in a vacuum) should continue to experience customer-driven product adoption, as referenced in recent new business wins (compounding to margins through operating leverage), and which should see it realize earnings momentum in support of meaningful free cash (given its capital lite model) and a continued cadence of return of capital (through its cash yield and buy-back).”
* Pason Systems Inc. (PSI-T, “sector perform”) to $15.50 from $17. Average: $14.
Analyst: “Again, very much a differentiated offering in the OFS space, as it continues to complement its highly entrenched product suite through reinvestment towards growth in new technology. While higher industry activity levels are likely needed to gain a full appreciation for the market opportunity, we continue to believe that it should capture breadth (if not depth) of market share, which should compound upon that ultimate inflection in the rig (and frac) count. To that end, we see PSI as holding some of the greatest embedded option value in the group, which is arguably underappreciated in a multiple that has lagged over the past year. Bottom line, long-term value is being created here (with multiplicative potential to its returns), while resilience of its base business and associated free cash therein (funding its cash yield and positive working capital) should hold investors over until the prize manifests.”
* Precision Drilling Corp. (PD-T, “sector perform”) to $120 from $100. Average: $115.55.
Analyst: “A core position in the OFS group, it maintains a solid value proposition as a function of the diversity of its operations, with structural support in Canada (multi-laterals) and gas (in both the US & CAN), plus complements of its C&P and International units (each representing examples of topical assets that could be repriced in a world where excess capacity is potentially absorbed in a revived LATAM industry), insulating its utilization & earnings through a continued muted environment. To that end, it is an ideal example of a historically cyclical business that is proving far more stable & industrialized, which should continue to elicit an improving valuation in the context of its ample (low risk) free cash and (expanding) return of capital prospects. The outcome to value should best be validated by expanding return of capital being targeted through its outlook (from current 40-per-cent FCF return), and the realization of which, should be the primary attractant of funds flow,”
Following Thursday’s release of “exceptional” third-quarter fiscal 2026 financial results, Stifel analyst Martin Landry expects investors to continue to reward Aritzia Inc. (ATZ-T), predicting its share price appreciation will continue.
“Despite a strong performance in the last 12 months, ATZ’s shares should react well to these results [Friday],” he said. “Aritzia is a great compounder, the company has a long growth runway to reinvest its cash flows and with an ROIC [return on invested capital] more than 20 per cent, the cash reinvested should compound rapidly.”
After the bell, the Vancouver-based clothing retailer reported quarterly earnings per share of $1.10, exceeding both Mr. Landry’s Street-high $1.02 estimate and the consensus projection of 89 cents. The beat was drove by a comparable same-store sales of 34.3 per cent year-over-year, which he called “the best performance in recent years, as Aritzia’s products resonate with customers.”
“This is the 4th consecutive quarter where Aritzia’s sales are up more than 30 per cent year-over-year, an impressive feat given the size of the company,” he noted. “Aritzia launched its mobile application in late October which stimulated sales significantly due in part to a promotion where first orders on the mobile app would get a 20-per-cent discount. This translated into strong comparable sales, which were up 34.3 per cent year-over-year, ahead of our expectations of 23.9 per cent and consensus of 20.3 per cent. Most importantly, Aritzia’s comparable sales were boosted by traffic, a more healthy and sustainable metric than price increases.
“Despite headwinds from tariffs on Vietnam and Cambodia imports and from the removal of the de minimis exemption rule totaling 410 basis points, Aritzia’s gross margin increased by 30 basis points year-over-year to reach 46 per cent, slightly lower than our expectation of 46.9 per cent and better than the company’s guidance for gross margins to remain flat. The gross margin expansion is due to leverage on fixed costs, fewer markdowns and lower freight costs.”
With the strong results from the past two quarters, Mr. Landry emphasized the company is on track to achieve management’s long-term fiscal 2027 revenue targets one-year ahead of expectations.
“While management expects FY27 EBITDA margin to expand year-over-year, they are hesitant to talk about the potential for EBITDA margins to reach 19 per cent,” he said. “Recall that last quarter, management had lowered expectations from 19 per cent to high teens due to the removal of the de minimis and high tariffs on Vietnam and Cambodia exports.”
After raising his estimates, introducing fiscal 2028 projections and rolling forward his valuation, Mr. Landry hiked his target for Aritzia shares to a high on the Street of $150 from $132, keeping a “buy” rating. The average target is $124.67.
“Aritzia has significant momentum currently as its products are well received by customers, the company has ample inventory to support heightened demand and digital marketing investments are paying off. While this momentum should slow down, comparable sales growth could stay above historical levels for several more quarters,” he said.
Elsewhere, others making target revisions include:
* RBC’s Irene Nattel to $150 from $116 with an “outperform” rating.
“Another quarter of accelerating momentum drove strong and substantially better results for FQ3 as existing customer loyalty is augmented by successful new customer acquisition via strong product, effective marketing, geographic expansion and accelerating e-commerce growth with the launch of the mobile app late in Q2. Sales momentum strong and sector-leading across geographies and channels, and profitability above guidance despite substantial tariff headwind, benefitting from scaling, higher full-priced sales and favorable mix shift. Raising F26-28 EPS forecasts by 12 per cent to 18 per cent,” said Ms. Nattel.
* TD Cowen’s Brian Morrison to $155 from $133 with a “buy” rating.
“A Q3/F26 beat and F2026 raise was anticipated, and even exceeded lofty expectations. With strong Q4/F26 revenue momentum, a robust initial mobile app contribution, and solid FCF building its cash position, our wishlist inputs to support brand strength/share momentum in 2026 were achieved. Gains should be modest to 2025 (about 120 per cent), but continue, with heightened confidence in its future growth outlook,” said Mr. Morrison.
* Raymond James’ Michael Glen to $155 from $130 with an “outperform” rating.
“We would acknowledge that investors were expecting an F3Q beat, but would regard the magnitude of this beat as much larger than expected. Additionally, the implications / takeaways for investor forecasting is significant as results demonstrate the significant growth, revenue and margin levers available,” said Mr. Glen.
* Canaccord Genuity’s Luke Hannan to $164 from $135 with a “buy” rating.
“In our view, valuation will continue to be a focus point for investors as the stock likely hits new all-time highs tomorrow morning, though the robust performance Aritzia continues to deliver is demonstrating it deserves every bit of the premium valuation. We’ve adjusted our F2027 estimates to reflect stronger e-commerce performance and greater operating leverage, while also increasing our target multiple to reflect Aritzia’s improving growth trajectory. Accordingly, our target price has increased,” said Mr. Hannan.
* Desjardins Securities’ Chris Li to $148 from $133 with a “buy” rating.
“ATZ delivered another quarter of robust revenue growth (42 per cent vs 20–24-per-cent guidance), supported by strong product assortment and inventory, enhanced marketing, outsized e-com growth, new stores etc. We believe the strong ‘beat and raise’ supports the premium valuation and increases investor confidence in ATZ’s ability to sustain attractive EPS growth. We are raising our FY27E EPS (again) to $4.07 (30 per cent year-over-year) from $3.70, driven by conservative expectations for 15-per-cent revenue growth and 150 basis points margin expansion," said Mr. Li.
National Bank Financial analyst Cameron Doerksen sees sentiment turning more positive for TFI International Inc. (TFII-T) as truck capacity “starts to rationalize.”
“While trucking volumes have remained weak through Q4/25, driven by regulatory changes there is growing optimism that industry capacity, both in the U.S. and Canada, is finally starting to rationalize, which would likely be a catalyst for pricing strength in 2026,” he said. “One broad-based measure of transportation capacity in the U.S. we track is the Logistics Managers Transportation Capacity Index which collapsed in December down 13.1 points to 36.9, the fourth consecutive drop and the lowest level since the Fall of 2021 during the period of tight capacity during the pandemic.”
In a client report released Friday previewing the Montreal-based company’s fourth-quarter earnings release, which is expected next month, Mr. Doerksen said he expects earnings per share to fall in line with its guidance of 80-90 cents, but he trimmed his full-year 2026 estimates to “reflect ongoing market weakness, particularly in TFII’s Logistics segment.”
“We are also rolling out a forecast for 2027 in which we forecast EPS of $6.95, which is lower than the $8.00/share management views as the potential earnings power of the company in a more normalized market,” he added.
“On our updated 2026 estimates for which we forecast a modest year-over-year improvement in earnings, but still well below the profitability performance prior to the current trucking downturn, TFII shares are trading at a P/E of 20.1 times versus the weighted average peer group at 27.6 times (EV/EBITDA multiple for TFII at 9.7 times versus weighted average peer group at 10.6 times). Although TFII’s financial results will still be below prior peak levels, we still forecast 2026 FCF at a solid $873 million, which would equate to a FCF yield of 9.6 per cent.”
Given his view of improving sentiment, Mr. Doerksen hiked target for TFI shares to $170 from $145. The average is $155.75.
"We maintain our Outperform rating on TFI International shares ahead of Q4 results. Trucking market conditions remained soft overall through Q4 so we expect another weak quarter for trucking companies including TFII (Q1/26 also likely to remain soft). However, there is mounting evidence that North American trucking capacity may finally be exiting the market, which could trigger a pricing inflection point for the industry. In addition, we believe that TFII continues to make progress on improving the profitability in its U.S. LTL [less-than truckload] operations. In this context, we see further upside for TFII shares in 2026."
In other analyst actions:
* In response to a “solid” third-quarter earnings beat, Raymond James’ Steve Hansen upgraded Ag Growth International Inc. (AFN-T) to “outperform” from “market perform” with a $52 target (unchanged). The average is $35.50.
“After an extended filing delay, Ag Growth International (AGI) reported 3Q25 adj. EBITDA of $71.0-million (up 4 per cent year-over-year), handily ahead of both the Street & RJL estimates of $65-million & $61-million, respectively, with the bulk of the upside (vs. our estimate) attributable to better-than-expected top line (U.S. & International) and consolidated margin,” he said.
“Despite the beat, management issued a cautious 4Q25 outlook, calling for ‘lower’ Adj. EBITDA (both sequential & year-over-year) due to challenging market conditions, negative mix, and notably higher SG&A. Still, the clear surprise in the report was the lack of any discernible ‘impact’ on the company’s financials associated with the filing delay (no write-downs or charges incurred), suggesting the whole event introduced extraordinary concern over something fairly inconsequential (procedural/training deficiencies). In hindsight, the whole situation now looks like a ‘tempest in a teapot’; hence, our decision to upgrade our rating back to Outperform.”
* TD Cowen’s Jeffrey Osborne upgraded Ballard Power Systems Inc. (BLDP-Q, BLDP-T) to “hold” from “sell” with a US$2.50 target (unchanged). The average is US$2.74.
“While we expect 2026 to remain a challenging year for hydrogen fuel cells, Ballard has removed near-term negative catalysts through restructuring, OPEX and CAPEX cuts, strategic exits from China and Texas, and a sharpened focus on EU/NA transit markets,” he said. “Execution remains key, but risk-reward now skews more balanced.”
“Ballard is undergoing a multistep strategy shift to reach positive cash flow by the end of 2027. With new CEO Marty Neese speeding up the process, the company is cutting operating costs, canceling expensive expansion plans, moving away from China, and focusing more on markets and products that fit better. While this is not yet a turning point for growth, it does reduce execution risks and strengthen the balance sheet.”
* Following weaker-than-expected initial 2026 guidance, BMO’s Joel Jackson cut his Chemtrade Logistics Income Fund (CHE.UN-T) target to $18.50 from $20 with an “outperform” rating. The average is $19.33.
“This is the first disappointing update in some time and implies flattish 2026E earnings (2025E and 2026E both perhaps $505-510-million) though CHE tends to guide conservatively, valuation remains attractive, and we expect positive developments from the North Van rezoning application in the coming months,” said Mr. Jackson.
* In response to Thursday’s release of its fourth-quarter and full-year 2025 operating results, National Bank Financial’s Alex Terentiew reduced his Street-high target for shares of Endeavour Silver Corp. (EDR-T) by $1 to $20, keeping an “outperform” rating. The average is $14.83.
“Although [Thursday’s] results came in slightly below our estimates, we continue to view EDR as our Top Pick among the silver producers given its relatively discounted valuation, peer-leading growth profile, and expected transition to a state of positive FCF through the ramp-up of Terronera and expansion at Kolpa to 2,500tpd,” said Mr. Terentiew. “In 2026, we believe management will turn its focus to FCF harvesting, optimizing operations, and the development of Pitarrilla, which has the potential to be the company’s largest operation.”
* Raymond James’ Steve Hansen increased his Exchange Income Corp. (EIF-T) target to $100 from $92 with a “strong buy” rating. The average is $88.80.
“We are increasing our target price ... following news [Thursday] that the company’s PAL Airlines (PAL) subsidiary inked a letter-of-intent (LOI) with Air Canada to: 1) extend its existing agreement by an additional four years to 2032; & 2) expand the scope of the contract to include 11 aircraft (vs. 6 initial). As previously opined, we view this contract as opportunistic, low-risk business that nicely leverages PAL’s existing footprint Eastern Canada, and offers attractive, predictable cash flow through its duration,” said Mr. Hansen.
* BMO’s Ben Pham lowered his Keyera Corp. (KEY-T) target to $51, below the $52.60 average, from $54 with an “outperform” rating.
“While we remain bullish on KEY’s Infrastructure segment (namely potential positive revision to its 7-8-per-cent fee-based growth guidance through 2027) and the strategic and financial benefits of the Plains NGL deal expected to close in a few months, recent investor inbounds suggest that there is hesitancy to get involved with the stock near-term given commodity headwinds,” said Mr. Pham.
“We’ve now reflected that commodity risk (target to $51 vs. $54) but with a continued attractive potential total return of 28 per cent and relative valuation (approximately 9 times EBITDA vs. peers 11 times), we maintain Outperform/Top Pick Designation.”
* After hosting a recent institutional meeting with Suncor Energy Inc. (SU-T) president and CEO Rich Kruger, RBC’s Greg Pardy raised his target for its shares to $70 from $67 with an “outperform” rating, saying it “reinforced our conviction in the company’s long-term outlook and market appreciation potential.” The average is $68.41.
“Suncor’s upcoming investor day on March 31 should serve to narrow the perception gap between its reserve bookings and vast oil sands resource base and afford further support for its relative valuation,” Mr. Pardy said. “We are reaffirming an Outperform recommendation on Suncor and our raising our one-year target price by 4 per cent ($3) to $70 per share. Suncor remains our favorite integrated in Canada and is on our Global Energy Best Ideas list.”