Inside the Market’s roundup of some of today’s key analyst actions
Canaccord Genuity analyst Luke Hannan expects shares in Aritzia Inc. (ATZ-T) to perform well today following “another impressive quarter” reported Thursday night.
Revenue of $1.17 billion in its fiscal 2027 second quarter came in ahead of Canaccord’s $1.11 billion estimate and consensus’ $1.12 billion forecast, while adjusted EBITDA of $246 million came in considerably ahead of Canaccord’s estimate of $195 million and the consensus forecast of $198 million.
Mr. Hannan reiterated a “buy” rating and raised his price target to C$194 from C$189.
The strong results were supported by store openings as well as year-over-year comparable sales growth of 34.5%. In the US, revenue grew 60% YoY, while in Canada, revenue grew 20% YoY; brick-and-mortar revenue increased 34% YoY, while digital grew 68% YoY, the analyst noted.
“Gross margin expanded by ~13 percentage points YoY to 57.1%, aided by the receipt of $97 million of IEEPA tariff refunds. Excluding this, adjusted gross margin expanded by 490 bps YoY to 48.7%, well above management’s guidance of +250-300 bps, which we suspect was attributable to incremental fixed-cost leverage due to higher sales,” Mr. Hannan said in a note to clients.
“Importantly, momentum has carried forward into Q3/F27, with Aritzia guiding to revenue of $1.275-1.325 billion (consensus: $1.232 billion). This not only implies YoY revenue growth of 23-27% (incl. a high-teens rate of comparable sales growth) for the entirety of the quarter, but also moderating to a high-teens/low-20% rate of revenue growth beginning in late October, given the company will be lapping the introduction of its app. Q3/F27 guidance also calls for 100-150 bps of gross margin expansion to 47-47.5% (consensus: 46.75%),” the analyst said.
There have been broad concerns about the state of consumer health, but Mr. Hannan says Aritzia is navigating this environment well.
“The combination of a compelling product assortment and strategic investments in marketing is driving engagement from new and existing clientele. Altogether, we believe Q2/F27 results support the case for multiple expansion from current levels, despite headwinds for the broader consumer. Accordingly, we’ve lifted our target multiple while making modest adjustments to F2027 and F2028 estimates.”
Elsewhere, Raymond James analyst Michael Glen also raised his estimates but maintained an “outperform” rating and C$175 price target.
In terms of sales trends indicated in third quarter results to date, “current growth rates remain consistent with F2Q (e.g. very strong), with guidance embedding a lower pace (indicated as high teens to 20%) as the company starts to lap the mobile app launch (commences October 27),” Mr. Glen said in a note. “Overall, in assessing this guidance, our view is that the stock should trade meaningfully better. Further, we see a very constructive path forward through the balance of this year with the upcoming investor day in late October also serving as a near-term catalyst.”
Meanwhile, Ventum Capital Markets analyst George Doumet raised his price target to C$160 from C$146 while reiterating a “neutral” rating.
“Heading into Q2/F27, we were looking for two things: evidence that strong same-store sales momentum was carrying into Q3 despite a difficult lap and a raise to full-year guidance supported by gross margin strength and more favourable FX assumptions. We got both. This is particularly encouraging against an increasingly challenging consumer backdrop, with several larger apparel retailers reporting meaningful sales weakness, particularly in Canada. With shares down ~20% since Q1 despite a clean beat and raise, we believe the results help address the market’s central concern around the pace of comp normalization and reinforce confidence in ATZ’s earnings trajectory,” said Mr. Doumet.
Over at TD Cowen, analyst Brian Morrison is also expecting a positive reaction in Aritzia’s shares today. But he nevertheless cut his price target, to C$175 from C$200, keeping a cautious eye on the rising bond yields in recent weeks that could be a headwind for consumer spending.
“In general share reactions to positive retail results (including’s ATZ Q1/F27) have recently been met with caution on the outlook due to rising rates/potential impact on consumer affordability,’ he said. ”Aritzia Q2/F27 results indicate their consumer may prove more resilient than peers. Along with its guidance raise, net cash position/FCF outlook, this should support upward consensus revisions/investor conviction."
Mr. Morrison still rates the stock a “buy”.
The average price target is now C$182.07, according to Capital IQ.
Barclays analyst Theresa Chen downgraded South Bow Corp. (SOBO-T) to “underweight” from “equal weight”.
“Despite Prairie Connector’s recent commercial milestone, we think remaining permitting and execution hurdles plus potential competitive pressures create downside risk near term,” Ms. Chen said.
Her price target was cut to C$47 from C$49.
Raymond James analyst Steve Hansen raised his price target on Firan Technology Group Corp. (FTG-T) in the wake of a third-quarter earnings beat, going to C$38 from C$30. He reiterated an “outperform” rating.
He said this is based upon the firm’s: 1) record order intake & backlog; 2) attractive growth pipeline; 3) pristine balance sheet; and 4) increasing corporate development optionality - the ability to make future strategic decisions.
“Management reiterated the significant opportunity tied to its two classified defense programs (~$50–100 mln of annual program potential each, FTG to capture a portion), with 3Q26 deliveries representing just a fraction of expected volumes,” Mr. Hansen said in a note. “Encouragingly, production is expected to ramp through 2027, reaching full run-rate by year-end before sustaining for several years thereafter.”
“Beyond its two classified programs, management highlighted a strengthening defense pipeline, including: 1) growing weapons/electronic warfare demand; 2) Saab’s GlobalEye program (via Bombardier); & 3) Canadian defense offset opportunities, including a newly qualified international customer,” the analyst added.
Elsewhere, ATB Cormark Capital Markets analyst Nicholas Boychuk raised his price target to C$40 from C$30 and reiterated an “outperform” rating.
“FTG printed an exceptionally strong Q3/26 on booming circuit pricing and expedited delivery premiums from major customers,” Mr. Boychuk said in a note. “While it remains hard to nail down results on a quarterly basis, the long-term outlook for FTG couldn’t be much more attractive.”
National Bank analyst Zachary Evershed raised his price target on Richelieu Hardware Ltd. (RCH-T) to C$39.50 from C$38.50 and reiterated a “sector perform” rating after the company’s earnings beat this week.
The analyst noted that margin pressure from tariffs is now largely over, and management flagged that September and early October data are tracking at 3-4% organic growth.
“On the bright side, management notes that tariff-related pricing should be in the rearview mirror, implying that organic top line growth should be more conducive to operating leverage,” Mr. Evershed said in a note.
“Given the lack of vigour in today’s housing market, management anticipates a similar ~11% EBITDA margin for Q4 and through 2027. We currently forecast an (unchanged) EBITDA margin of 11.2% for 2027e, in line with management’s target,” he said.
ATB Cormark Capital Markets analyst Nicholas Boychuk is feeling bullish on Hammond Power Solutions Inc. (HPS-A-T) following a site tour in Monterrey, Mexico, this week.
“With strong end-market demand clear, deliverability remains the primary stock price catalyst,” he said in a note. “We came away with increased confidence in management’s ability to scale physical infrastructure and labour. Ongoing process improvements across facilities reduce near-term capacity constraints, while proactive labour initiatives provide a structural advantage in Mexico. We expect the stock to compound meaningfully over the coming years.”
His price target on Hammond Power Solutions went to $400 from $350 and he reiterated an “outperform” rating.
TD Cowen Derek J. Lessard has named Boyd Group Services Inc. (BYD-T) as a top pick, but cut his price target to C$175 from C$200. He thinks investors are pricing the company’s past financial performance, and missing its potential recovery.
He argues the market is focused on near-term same-store sales while overlooking improving claims and margins, with valuation already pricing downside.
“The shares are down 50% YTD, trading at their lowest forward consensus P/E in more than a decade, and a record free cash flow yield, despite our 44% EPS growth forecast in 2027. In short, we see a rare opportunity to own a high-quality compounder before the market recognizes the recovery,” Mr. Lessard said in a note to clients.
He notes business operations are on the mend. “Used vehicle values have stabilized, insurance inflation is easing, and driving activity remains near record levels. While an aging fleet continues to elevate total-loss rates, gradual renewal should shift more claims into the repair channel. Greater repair complexity and rising direct repair program penetration support ticket and volume growth, benefiting scaled operators like BYD,” he said.
ATB Cormark Capital Markets analyst Stefan Loannou raised his price target on Hudbay Minerals Inc. (HBM-T) to C$40 from C$35 following a recent tour of the miner’s Snow Lake operations in Manitoba.
The operation has an updated mine plane, which the analyst says highlights the Manitoba business unit’s leverage to the gold market — “valuable diversification complementing copper initiatives spanning the company’s greater project portfolio.”
“In brief, Snow Lake’s reserve life has now been extended to 2043—a 6-year extension relative to a previous 2021 Technical Report. Notably, gold production over the next 5 years (2026-2030) is now expected to average (remain at) ~185 kozpa, reflecting continued strong mill throughput rates at New Britannia and higher gold recoveries at Stall (a 37% increase in total gold production from an additional 250 koz produced over the same five-year period in Snow Lake’s 2021 Technical Report).”
Mr. Loannou rates Hudbay “outperform”.
In other analyst actions:
Barclays initiated coverage on CAE Inc. (CAE-T) with an “overweight” rating and C$54 price target.