Inside the Market’s roundup of some of today’s key analyst actions
After another “weak” quarter from its downstream operations, National Bank Financial analyst Travis Wood downgraded his recommendation for shares of Cenovus Energy Inc. (CVE-T) to “sector perform” from “outperform” previously, expressing concern over the impact of managerial turbulence after a series of leadership changes.
Shares of the Calgary-based company slipped 2.8 per cent following the premarket release of its fourth-quarter 2024 financial report, included average production of 816,000 barrels of oil equivalent per day, which was an increase of 1 per cent year-over-year and in line with both Mr. Wood’s 813,000 boe/d estimate and the consensus of 810,000 boe/d. However, cash flow per share slipped 20 per cent from the same point a year ago to 87 cents, missing the analyst’s forecast by 4 cents and the Street’s expectation by 5 cents, due largely to “modestly” higher interest, royalties, taxes and working capital requirements.
Cenovus eyes Asia market for crude oil as threat of U.S. tariffs looms over energy sector
“A very strong quarter out of the oil sands segment is overshadowed yet again by another expectedly weak downstream quarter and some unexpected organizational changes,” said Mr. Wood. “The $600-million downstream drag on FCF in the quarter comes as no surprise ($1.15-billion loss in 2H24), and we expect continued relative weakness out of this segment for much of 2025. Also, the lack of commentary on material management changes creates uncertainty and adds risk in our view, notably as it relates to the thermal segment which has performed extremely well under the leadership of its current EVP, Norrie Ramsay (as reflected by record volumes in Q4).
“Although we don’t believe material downstream value is embedded in today’s share price, we view this as fair, and we believe that until the company can deliver consistent and positive margin capture, the stock will continue to lag its peers and remain range bound under our current assumptions and estimates. We are downgrading to Sector Perform (from Outperform) and have growing concerns around the culture now that as many as 4-5 members of senior management have departed over the last six months or so (+/-). As margin capture improves and the management transition and integration evolves with no cultural or operational disruptions, we see meaningful upside potential to today’s equity value.”
In a research report titled A Waiting Game, Mr. Wood said he expects Cenovus’ pace of returns to slow before slowing increases in the second half of 2025, noting net debt increased to $4.6-billion to end 2024, compared to the company’s $4.0-billion target.
Lowering his financial forecast, including reductions to his 2025 and 2026 cash flow forecasts to flat and down 2 per cent year-over-year, the analyst cut his target for Cenovus shares to $25 from $28. The average target on the Street is $29.44, according to LSEG data.
Elsewhere, others making changes include:
* RBC’s Greg Pardy to $25 from $26 with an “outperform” rating.
“Our constructive stance towards Cenovus reflects its upstream operating momentum and growth, strong balance sheet, solid leadership team and shareholder returns policy. But its soft quarterly results continue to weigh heavily on market sentiment. Like a fine wine, Cenovus’ outlook should improve with time, but sustained improvement in its U.S. refinery segment remains a key ingredient supporting relative outperformance,” said Mr. Pardy.
* Raymond James’ Michael Barth to $31 from $33 with an “outperform” rating.
“Challenges persist at CVE, although we suspect the worst of it is in the rearview mirror,” said Mr. Barth. “While our target does move modestly lower, it remains more than 40 per cent above the current share price, and we continue to see CVE trading at the largest discount to fair value in the peer group. While no imminent catalyst exists, we do expect U.S. Downstream financial contributions to improve over the next12-18 months and the Upstream business to experience a sizeable FCF inflection into 2026. We therefore reiterate our Outperform rating.”
* TD Cowen’s Menno Hulshof to $28 from $29 with a “buy” rating.
“While there’s a clear element of ‘wait-and-see’, H2/25 turnaround activity is limited, so this timeframe could serve as a litmus test for downstream potential,” he said.
* Desjardins Securities’ Chris MacCulloch to $27 from $28 with a “buy” rating.
“We have conservatively adjusted our US manufacturing segment assumptions following another quarter of negative operating margins, which overshadowed solid upstream performance. At this point, the market is rapidly losing faith in CVE’s ability to sustainably improve U.S. downstream performance, as reflected by the stock’s widening valuation discount vs peers,” said Mr. MacCulloch.
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National Bank Financial analyst Vishal Shreedhar sees Loblaw Companies Ltd. (L-T) maintaining its “momentum” after its fourth-quarter 2024 performance and outlook for the current fiscal year fell largely in line with expectations.
“L indicated Q1/25 FR and DR sssg [Food Retail and Drug Retail same-store sales growth] are off to a strong start, with positive front store sssg quarter-to-date,” he sai. “Cough and cold trends are strong, suggesting a delayed start to the cough and cold season.
“While normalized inflation continued into January 2025, L continues to see higher than normal price increases from large global vendors. Also, L is beginning to see inflation pressure from FX weakness (approximately 10 per cent of its costs are from the U.S., mostly produce; 50 per cent can be mitigated). While the gap between conventional and discount has stabilized, we expect a pass-through of inflation, and resulting consumer pressure to benefit L due to its higher discount mix (vs. peers) and strong private label offering. Our expectation is for L’s FR sssg trends to improve vs. peers through 2025 given easier year-over-year compares and improvement initiatives.”
On Thursday, shares of the retailer slid 2.6 per cent following the premarket release of its quarterly report amid concerns about the impact of a one-time non-cash charge, reflecting a revaluing of its liability related to outstanding points held by members of its PC Optimum program, as well as the impact of the Canada Post strike on gross margins.
Revenue came in at $14.948-billion, up from $14.531-billion in the same period a year ago but narrowly under both Mr. Shreedhar’s $14.97-billion estimate and the consensus projection on the Street of $14.954-billion as e-commerce sales grew 18.4 per cent. Earnings before interest, taxes, depreciation and amortization (EBITDA) grew to $1.698-billion from $1.633-billion a year ago, narrowly under the analyst’s $1.728-billion forecast but above the Street’s of $1.694-billion.
“L provided 2025 guidance: (i) Retail earnings to grow faster than sales; (ii) High single-digit EPS growth (NBF is 10 per cent year-over-year; 53rd week will benefit EPS by 2 per cent); and (iii) Net capex of $1.9-billlion (NBF is $1.9-billion),” said Mr. Shreedhar. “Management noted the outlook reflects low inflation, and a slight gross margin/SG&A rate increase.
“We revised our EPS estimates: 2025 goes to $9.44 from $9.31 and 2026 goes to $10.23 from $10.16.”
With those changes, he trimmed his target for Loblaw shares to $192 from $195 to reflect higher net debt, reiterating an “outperform” recommendation. The average target on the Street is $199.
Other changes include:
* Scotia’s John Zamparo to $190 from $200 with a “sector perform” rating.
“We’re supportive of Loblaw’s investments for future growth, though the resulting drag on EPS may weigh on sentiment for another quarter or two. There’s potential for volatility this year given uncertainty on consumer sentiment and recent buying preference trends. Greater market share in discount food could make us more constructive, but for now, we prefer WN (SO-rated) to gain an effective discount on L’s 18.5 times P/E on ‘25E,” he said.
* TD Cowen’s Michael Van Aelst to $195 from $202 with a “buy” rating.
“Despite results being broadly in line and L delivering its ‘best market share gains in a decade, shares fell 2.6 per cent as Retail GM% [gross margins] looked a little soft and capital investments ramp up,” said Mr. Van Aelst. “Two new massive DCs [distribution centres] and almost 2-per-cent sf growth would shackle most retailers’ EPS growth, but L is determined to deliver a still respectable HSD% [high single-digits] EPS growth in 2025 (a dip from the DD [double-digit] growth of recent years).
* RBC’s Irene Nattel to $215 from $217 with an “outperform” rating.
“Solid Q4 results and Q1 to date momentum supportive of our constructive outlook. With a store base that skews to discount, industry-leading PL penetration and loyalty program, tailwind of modest hard discount square footage growth, in our view Loblaw is best positioned to benefit from the secular shift in purchasing patterns. Valuation gap to MRU 2 times C25E EBITDA and should continue to converge over time, underpinned by rising ROE/ROIC and what we view as greater torque on Loblaw’s financial performance,” she said.
* Desjardins Securities’ Chris Li to $185 from $190 with a “hold” rating.
“Despite a large step-up in D&A and interest expense, as well as higher cost inflation, L is well-positioned to achieve its financial framework of high-single-digit EPS growth in 2025. We believe this is a testament to the company’s strong execution, cost discipline, and unmatched food and drug retail assets. We believe the EPS target is achievable but not overly conservative. We believe the limited earnings upside surprise and premium valuation mean share price appreciation will largely track EPS growth,” said Mr. Li.
* CIBC’s Mark Petrie to $208 from $206 with an “outperformer” rating.
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In response to Dream Residential Real Estate Investment Trust’s (DRR.U-T) move to commence a strategic review with a goal of closing the gap between its unit price and intrinsic value, Desjardins Securities analyst Kyle Stanley raised his recommendation for its units to “buy” from “hold” previously.
Shares of the Toronto-based REIT jumped almost 16 per cent on Thursday following the announcement, which is meant to “identify, evaluate and pursue a range of strategic alternatives with the goal of maximizing unitholder value.”
“Our downgrade was predicated on a lack of clarity on realizing the deeply embedded value and we see a strategic review as the most immediate way to maximize unitholder value,” Mr. Stanley explained. “Notwithstanding the 16-per-cent unit price response, we see a potential more than 20-per-cent return to target, which implies a 22-per-cent discount to our NAV.”
The analyst emphasized “challenging” operating environment persist as the REIT explores its options.
“Management did not provide formal guidance for 2025 given the initiation of the strategic review process; however, conference call commentary suggested leasing conditions remain challenged and indicative of peak supply, longer leasing negotiations and higher concessions,” he said. “These dynamics are expected to persist through 2025, and as a result, our forecast calls for SP NOI [same-property net operating income] growth of 1.5–2.0 per cent in 2025 and 3.0 per cent in 2026 vs 3.7 per cent in 2024.
“Management did not provide guidance on the expected timing or potential outcomes of the strategic review on the call. While difficult to predict given mixed outcomes of prior REIT strategic reviews and the current state of the U.S. multifamily environment, the transaction markets remain fairly liquid and management noted continued appetite for DRR’s product offering. Under one scenario, it could implement a capital recycling program, with proceeds redeployed into unit buybacks at a steep discount, which would help prove out the private market value of the portfolio. Additionally, call commentary suggested that attracting a JV partner to facilitate further investment was still on the table.”
The analyst thinks privatization “appears more likely,” adding: “The lack of formal 2025 guidance and the repayment of mortgage debt with the credit facility to preserve flexibility support our view that a privatization scenario could be plausible. We see pricing for a portfolio disposition in the US$8.50–10.50/unit range, which equates to a 15–30% discount to NAV. This aligns with the current trading range for DRR’s most direct U.S. apartment peers.”
Mr. Stanley’s target for Dream units rose to US$9.50 from US$7. The average is US$8.89.
Elsewhere, other changes include:
* RBC’s Jimmy Shan to US$9 from US$8 with a “sector perform” rating.
“The overriding news was its decision to explore strategic alternatives. Given persistent trading discount since IPO, small size and tough acquisition economics challenging its ability to grow, a strategic review makes sense. Our NAV estimate is $13 (reported $13.39), based on nominal cap rate of 6.5 per cent, $121K/suite. We see a 50-per-cent-plus probability of an outcome north of $10 (implying 7.5-per-cent cap). While MFR market is gaining momentum, we see a portfolio sale as less likely. The Dream/ Pauls platform could arrive to a creative solution while a portfolio sale encumbered with asset agreement could also limit pool of buyers,” said Mr. Shan.
* Raymond James’ Brad Sturges to US$8.25 from US$7.25 with a “market perform” rating.
“We expect that DRR’s newly announced strategic review could be relatively lengthy, given the uncertain economic and interest rate environment, and the slower private transaction market. Ultimately, we believe the best option for DRR to maximize unitholder value is a go-private cash transaction. However, we believe if DRR remains as a public entity, the REIT’s go-forward plan could include expansion of its residential real estate operating and growth strategy through a transformational acquisition that also enhances DRR’s trading liquidity. However, we expect that any near-term attempt by DRR to improve its trading liquidity through a strategic acquisition could result in some estimated NAV/unit dilution due to DRR’s higher cost of equity capital,” he said.
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RBC Dominion Securities analyst Ryland Conrad sees Leon’s Furniture Ltd. (LNF-T) “positioned to deliver healthy earnings growth, enhanced capital returns and strategic optionality.”
“Leon’s controls market-leading positions within the furniture and appliance retail categories, leveraging strong brand recognition, a vertically integrated ecosystem, and a 115+ year track record of steady growth and profitability,” he added. “In our view, with the shares trading at a FTM [forward 12-month] EV/ EBITDA multiple of 6.2 times, which is below comps and LNF’s own long-term average, current valuation levels represent an attractive opportunity.”
In a research report released Friday titled Not Your Father’s Furniture Store, Mr. Conrad initiated coverage of the retailer with an “outperform” recommendation, seeing “plenty of runway” for organic growth and “well positioned” to make gains through M&A activity.
“Despite its market-leading positioning, Leon’s retail business represents a fraction of the Canadian market with less than 20-per-cent market share,” he said. As such, we believe the company has plenty of runway for organic growth given its ability to capture additional market share alongside a portfolio of growth-accretive ancillary businesses. While the operating environment is expected to remain challenged in the near term, modest sequential improvement is expected in 2025 as interest rates ease and housing activity (a key demand driver) begins to recover.
“Against the backdrop of a fragmented furniture industry, we believe the company is well positioned to execute on M&A by capitalizing on its strong balance sheet (net debt/ EBITDA of 0.6 times including leases as at Q3/24), steady FCF generation (50-per-cent EBITDA-to-FCF conversion), and ancillary services that dovetail with acquisitions, thus making them more accretive. Assuming an upper leverage threshold of 2.5 times on a pro forma basis, we estimate that Leon’s has up to $1-bilion in acquisition capacity. Under our illustrative M&A scenario, a derived NAV of $36/share would represent 11-per-cent accretion versus our current one-year forward NAV of $32.”
Also emphasizing the potential gains from the company’s intention to launch a real estate investment trust, Mr. Conrad set a target of $32, reflecting his view on the fundamental value of Leon’s current business, largely predicated on his outlook for “steady capital appreciation driven by excess FCF generation.” The average is now $34.50.
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TD Cowen analyst Tim James thinks Chorus Aviation Inc.’s (CHR-T) in-line fourth-quarter 2024 results and reaffirmation of its 2025 outlook “allow investors to focus on upside from redeployment of capital from leasing business sale and corresponding lift to ROE, earnings quality.”
Accordingly, he raised his rating for its shares to “buy” from “hold” previously.
“We believe momentum in Voyageur business, increasingly discounted bottoming in revenue/EBITDA expected in 2026 from the AC CPA and further asset monetization opportunities (not in our forecast) should support the stock,” he said.
“We believe disclosure around the higher-multiple Voyageur business should increase in the coming years, providing a bias higher to CHR’s valuation multiples. Management indications imply Voyageur’s adjusted EBITDA will represent 18 per cent of TD’s 2025 consolidated forecast. In addition, we anticipate the communication of a more defined capital-allocation strategy in 2025, which could include buybacks and dividend reinstatement (we assume Q1/26), and details around the focus of potential M&A should be positive for the shares.”
Mr. James increased his target price to $27 from $25 to reflect recent share-price weakness. The average is $26.99.
Other making target changes include:
* National Bank’s Cameron Doerksen to $28 from $26 with an “outperform” rating.
“We maintain our Outperform rating on Chorus Aviation shares following Q4/24 results,” said Mr. Doerksen. “With the completion of the sale of Chorus’s leasing business in late 2024 and subsequent deleveraging transactions, the company is a much simpler business consisting of two main operations: (1) the fixed fee capacity purchase agreement (CPA) with Air Canada that has contracted and predictable cash flows that run out to 2035 and, (2) the company’s growing Voyageur Aviation subsidiary. The “new” Chorus should be a steady generator of free cash flow with shareholder value generation through ongoing share buybacks and potentially acquisitions in the aviation services sector. We forecast 2025 free cash flow at $116 million (which does not include any potential aircraft sales), which equates to a 22-per-cent FCF yield based on the current share price.”
* RBC’s James McGarragle to $28 from $26.25 with an “outperform” rating.
“While Q4 results were in line, we came away positive on the quarter given the strong FCF print and share buyback momentum, and were therefore surprised the shares traded flat today,” he said. “Key is that we see CHR as less impacted by tariff uncertainty and view year-to-date weakness in the shares as unwarranted. We see CHR shares as a solid value opportunity (8-per-cent FCF yield on our 2026E), with low debt (1.4 times) and potential upside from M&A, organic investments, and re-leasing of aircraft falling out of the CPA.”
* CIBC’s Kevin Chiang to $28 from $26 with an “outperformer” rating.
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In other analyst actions:
* Following stronger-than-anticipated quarterly results, Raymond James’ Brad Sturges upgraded StorageVault Canada Inc. (SVI-T) to “outperform” from “market perform” with a $4.60 target, down from $4.70. The average on the Street is $5.23.
“The Canadian Real Estate Association (CREA) suggests that Canadian housing activity could rebound in the spring and/or summer if fixed mortgage rates continue to fall to more affordable levels,” he said. “As a result, we believe Canadian storage leasing demand could potentially start recovering at some point later this year ... We upgrade StorageVault to Outperform (prior: Market Perform) to reflect: 1) its deep NAV/share discount; 2) StorageVault’s rare P/AFFO multiple discount relative to its U.S. storage peers as it has historically traded at a large P/AFFO multiple premium; and 3) the potential for StorageVault to generate greater 2025E AFFO/share growth year-over-year.”
* Raymond James’ Craig Stanley initiated coverage of Toronto-based AbraSilver Resource Corp. (ABRA-X) with an “outperform” rating and $5 target. The average is $5.25.
“ABRA is advancing its 100-per-cent-owned Diablillos Silver + Gold Project in Argentina,” he said. “We believe Diablillos is one of the best undeveloped silver projects not held by a producer. In addition to strong economics, the project benefits from recent political changes in Argentina that will provide tax, customs, and currency exchange incentives.”
* Stifel’s Ian Gillies raised his target for Adentra Inc. (ADEN-T) to $51 from $50 with a “buy” rating and lowered his Doman Building Materials Group Ltd. (DBM-T) target to $11.50 from $12 with a “buy” rating. The averages are $53.38 and $11.58, respectively.
“’That’s as good as money, sir. Those are I.O.U.’s. Go ahead and add it up, every cent’s accounted for.’ – Lloyd Christmas “Dumb and Dumber”,” said Mr. Gillies. “It’s been a long and tough start to the year for our coverage list with it down 6 per cent on average, compared to the S&P 500 and S&P TSX both at up 4 per cent. We continue to think that there will be select pockets of strength in our coverage this year and the sell-off should be treated opportunistically rather than as a sign estimates are set to weaken. We are optimistic that we will not be writing IOUs like Harry and Lloyd in Dumb and Dumber by mid-year. Our best ideas right now are AtkinsRealis and Badger. Tactically, we like Badger and Stantec into 4Q24 prints, while we are cautious on MATR into its 4Q release.”
* RBC’s Paul Treiber increased his Altus Group Ltd. (AIF-T) target to $62 from $56 with an “outperform” rating, while CIBC’s Scott Fletcher lowered his target to $57 from $60 with a “neutral” rating. The average on the Street is $60.
“Q4 was mixed, with revenue effectively in line with RBCe/ consensus, while adj. EBITDA was slightly short of consensus when excluding unusuals. FY25 revenue and adj. EBITDA guidance is effectively in line with consensus, though growth and margin expansion are likely to be back-end loaded (Q1 guidance light), as it will take time for the CRE market to improve and the ARGUS Intelligence migration cycle to commence,” said Mr. Treiber.
* Raymond James’ Brian MacArthur lowered his Cameco Corp. (CCO-T) target to $85 from $88 with an “outperform” rating. Other changes include: TD Cowen’s Craig Hutchison to $90 from $91 with a “buy” rating and Canaccord Genuity’s Katie Lachapelle to $82.50 from $85 with a “buy” rating. The average is $82.79.
“CCO provides investors with lower-risk exposure to the uranium market given its diversification of sources. These sources are supported by a portfolio of long-term contracts that provide some downside protection in periods of depressed spot uranium prices, while maintaining optionality to higher uranium prices. In addition, CCO has multiple operations curtailed that could be brought back should uranium prices increase. Although the 2021 tax court decision applies only to the 2003, 2005, and 2006 tax years, we view it as a positive for CCO given we believe it could be relevant in determining the outcome for other years and reduces risk related to the CRA dispute,” said Mr. MacArthur.
* Mr. MacArthur bumped his Teck Resources Ltd. (TECK.B-T) target to $71 from $70 with an “outperform” rating, while Canaccord Genuity’s Dalton Baretto moved his target to $72 from $71 with a “buy” rating. The average is $71.66.
“We reiterate our BUY rating on TECK and are increasing our target price to C$72.00/sh (from C$71.00/sh) following the release of the company’s full Q4/24 results. We like TECK for its scale, near-term copper growth, longer-term copper optionality, and strong balance sheet. With QB2 hitting its stride, TECK is poised to further increase its copper production and cash flow generation in 2025. In addition, we note the company’s $11-billion in liquidity, a substantial war chest to grow the company’s copper business (organically as well as inorganically) even after deploying the remaining C$1.4 billion in share buybacks the next 12-24 months,” said Mr. Baretto.
* Bernstein’s David Vernon cut his Canadian Pacific Kansas City Ltd. (CP-T) target to $122 from $123 with a “market perform” rating. The average is $127.63.
* In response to its definitive agreement to sell its Helly Hansen business to Kontoor Brands, Canaccord Genuity’s Luke Hannan lowered his target for Canadian Tire Corp. Ltd. (CTC-A-T) to $153 from $158 with a “hold” rating. The average is $160.36.
“We are not surprised to see the modest strength in the shares yesterday, considering most investors didn’t have much love for the Helly Hansen acquisition in the first place,” he said. “The sale, combined with the CTFS strategic review and language in the press release on the company’s sharper focus on Canadian retail, provides some hints as to what to expect on March 6, in our view. We’ve adjusted our model, assuming a mid-Q2/25 closing of the sale and $1.276-billion of proceeds flowing through to the balance sheet, though we expect this will have to be fine-tuned post-closing. We’ve reduced our estimates to reflect the divestiture, which reduces our target price based on our SOTP valuation. We’ll look for more direction from the company around use of proceeds.”
* National Bank’s Zachary Evershed trimmed his Cascades Inc. (CAS-T) target to $14, matching the average, from $14.50 with a “sector perform” rating.
“On marginally higher corporate costs and pulp prices inflecting more quickly than anticipated, our target falls to $14 (was $14.50) on an unchanged sum-of-parts,” said Mr. Evershed. “While we are increasingly bullish on the potential for a multiple re-rating as Cascades generates cash and repays debt, we rate Cascades Sector Perform as we elect to remain on the sidelines while geopolitical tensions continue to cloud the outlook, with the next potential critical date in the evolving tariff discussion on March 1.”
* National Bank’s Ahmed Abdullah raised his CCL Industries Inc. (CCL.B-T) target to $94 from $90, which is the current average, with an “outperform” rating, while Scotia’s Jonathan Goldman bumped his to $86 from $85 with a “sector outperform” rating.
“CCL’s 1Q outlook commentary points to a solid start for the year across a number of its primary segments. While it also noted an expectation of earnings and top-line growth in 2025, it qualified that with caution around the current macro environment and related uncertainty. U.S. related tariffs currently being discussed are not expected to impact CCL directly given its local presence; however, the Company noted that it is watching for indirect impacts the tariffs may have on the general economy and its customers. Start-up costs in 2024 were $10-million (annual); these costs should narrow in 2025 as new operations come online. Capex in 2025 to be $485-milion. FX modest tailwind at current rates.”
* National Bank’s Matt Kornack bumped his target for Crombie REIT (CRR.UN-T) to $16.50, above the $16.03 average, from $16 with an “outperform” rating, while Desjardins Securities’ Lorne Kalmar lowered his target to $15.50 from $16 with a “buy” rating.
“As expected, CRR reported another steady quarter with occupancy reaching historical high levels on solid tenant demand and dispositions of properties with chronic vacancy, renewal spreads at the high-end of expectations and SPNOI within the 2-3-per-cent track record,” Mr. Kornack said. “On capital allocation, the REIT added a high-quality apartment complex with leasing upside and sold buildings that had weighed on occupancy (expect more of this in 2025). Tenant interest remains robust across the country with availability of space relatively sparse, forcing users to be more flexible in retail footprints for their offering, ultimately opening up more demand for CRR. Notwithstanding heightened economic uncertainty, the tenant watch-list remains small and in situations where they are getting space back, re-leasing has been fairly quick and at higher rents.”
* RBC’s Pammi Bir lowered his Dream Industrial REIT (DIR.UN-T) target to $15 from $16 with an “outperform” rating, while Desjardins Securities’ Kyle Stanley trimmed his target to $15.50 from $16.50 with a “buy” rating. The average is $15.25.
“Set against a backdrop of lower-than-usual macro visibility amid US trade tensions, DIR’s 2025 guidance range was better than we expected. Investors will likely need clouds to part along with some convincing evidence, though the substantial gap between in-place and market rents should continue to underpin strong organic growth. Combined with rising earnings contributions from its JV relationships and valuation that seems excessively discounted,” said Mr. Bir.
* RBC’s Maurice Choy raised his Hydro One Ltd. (H-T) target to $46 from $43 with a “sector perform” rating. The average is $45.33.
“While the company’s modest revision to its 2027 EPS guidance shouldn’t come as a surprise to the market, we still view the move as being supportive of the stock’s investment thesis, which includes Hydro One’s organic growth related to Ontario’s rising electricity demand environment and low-risk regulated utility cash flows that underpin its defensive attribute,” said Mr. Choy. “Besides continued execution of its growth plans, in the coming months, we look forward to the conclusion of the Ontario election and the OEB’s review of the cost of capital parameters, both of which look set to head towards status quo outcomes.”
* Desjardins Securities’ Brent Stadler bumped his Innergex Renewable Energy Inc. (INE-T) target to a Street high of $14.50 from $14 with a “buy” rating, while TD Cowen’s Sean Steuart raised his target to $9 from $8 with a “buy” rating. The average is $11.40.
“4Q results beat, and INE announced solid 2025 guidance which was well-received by investors,” he said. “Additionally, it is positive to see the 200MW Palomino solar project receive interconnect; this should allow INE to sign a PPA and begin construction in the coming months — which should be accretive to NAV. We continue to believe INE is executing, renewables demand remains strong and its valuation is attractive relative to peers. Removing modest conservatism vs how we value peers increases our target.”
“We see solid value in the operating portfolio, which boasts strong asset diversity by both technology and region, and a higher weighting to more valuable hydro assets. Further, we expect positive share price momentum as the company continues to execute on growth plans.”
* CIBC’s Paul Holden raised his Manulife Financial Corp. (MFC-T) target to $48 from $47 with a “neutral” rating. Other changes include: Desjardins Securities’ Doug Young to $52 from $50 with a “buy” rating and RBC’s Darko Mihelic to $51 from $49 with an “outperform” rating. The average is $50.08.
“MFC’s core EPS was stronger than we expected. Corporate was the segment with the largest positive difference relative to our estimates in part due to higher than expected earnings on surplus and some of this might be sustainable. The lifeco continues to impress with solid earnings in all segments, with this quarter highlighting GWAM. In addition, MFC announced a solid dividend increase and more buybacks. We raise our estimates conservatively as we believe some recent positive experience likely normalizes lower,” said Mr. Mihelic.
* Raymond James’ Steve Hansen raised his Nutrien Ltd. (NTR-N, NTR-T) target to US$68 from US$60 with an “outperform” rating. The average is US$59.58.
“We are increasing our target on Nutrien Ltd. ... and reiterating our Outperform rating based upon: 1) the company’s strong 4Q24 beat; 2) our constructive view of global crop fundamentals; 3) tangible signs of life in global potash markets, including solid demand and rising prices across most global regions; and 4) tangible evidence that management is making clear strides toward its key strategic objectives,” he said.
* National Bank’s Rupert Merer lowered his target for Polaris Renewable Energy Inc. (PIF-T) to $21 from $22, below the $23.75 average, with an “outperform” rating, while Raymond James’ Daniel Magder cut his target to $20 from $21 with a “strong buy” rating.
“As PIF further diversifies its operations through organic growth and M&A, we believe the shares could re-rate as concerns for geopolitical risk and asset concentration are reduced. However, with an incremental $30-million of debt repayment modeled and a 14-per-cent equity discount rate, our target falls to $21,” he said.
* National Bank’s Cameron Doerksen cut his TFI International Inc. (TFII-T) target to $178 from $223 with a “sector perform” rating. Other changes include: Stifel’s J. Bruce Chan to US$120 from US$147 with a “hold” rating. Scotia’s Konark Gupta to $192 from $230 with a “sector outperform” rating, Desjardins Securities’ Benoit Poirier to $174 from $236 with a “buy” rating, RBC’s Walter Spracklin to US$127 from US$156 with an “outperform” rating and CIBC’s Kevin Chiang to US$141 from US$160 with an “outperformer” rating. The average is $185.56.
“We maintain our Sector Perform rating on TFI International shares following Q4 results that were well below forecast. We continue to believe the company will eventually show margin improvement as it executes on lowering costs in both its LTL and TL segments, and we are looking for the broader trucking end markets to be more supportive later in 2025,” said Mr. Doerksen.
* CIBC’s Cosmos Chiu increased his Torex Gold Resources Inc. (TXG-T) target to $42 from $36 with a “neutral” rating. The average is $41.77.
* Desjardins Securities’ Chris MacCulloch raised his Whitecap Resources Inc. (WCP-T) target to $13 from $12.50 with a “buy” rating. The average is $13.57.
“The update capped off another successful year, highlighted by strong well performance across the asset portfolio, which showcased the company’s ability to drive operational and efficiency improvements through technical innovation. We anticipate an encore performance in 2025 as management hinted that production guidance has been conservatively set. Bring it on,” he said.