Inside the Market’s roundup of some of today’s key analyst actions
National Bank Financial analyst Gabriel Dechaine saw Royal Bank of Canada’s (RY-T) first quarter as “solid” aside from a single credit issue.
Shares of the largest domestic lender slipped 2.9 per cent alongside a broader market selloff on Thursday as fears of a further economic slowdown brought on by U.S. tariffs persist across the sector. The decline came even though RBC reported quarterly adjusted earnings per share of $3.62, exceeding Mr. Dechaine’s estimate of $3.28 and the consensus expectation of $3.25.
A breakdown of the big banks’ first-quarter earnings
In the quarter, RBC set aside $1.05-billion in provisions for credit losses – the funds banks reserve to cover loans that may default. That was higher than analysts anticipated, and included $985-million against loans that the bank believes may not be repaid, based on models that use economic forecasting to predict future losses.
It also reported gross impaired loans of $7.88-billion, rising 34 per cent from the fourth quarter of 2024 as a single account in the utility sector added $1.5-billion to the total.
“Headline credit performance gave us pause when we saw Q1/25 PCLs 27 per cent above our forecast and GILs increase 34 per cent quarter-over-quarter,” said Mr. Dechaine. “However, excluding a $1.5 bln single-name impairment, we estimate RY’s impaired PCL ratio was 32 bps (i.e., consistent with guidance) and GILs were up 10 per cent quarter-over-quarter (i.e., consistent with peers). The bank reiterated its full-year guidance, though indicated that peak PCLs that had been anticipated in the second half of the year were more difficult to predict. Tariff uncertainty has muddied the outlook, though RY disclosures provide a sense of the most negative scenarios. Specifically, management stated that if it assumed its most pessimistic scenario (e.g., 7-per-cent GDP contraction, 10-per-cent Canadian unemployment), it would need to boost its performing ACL by 30 per cent, or around $1.5-billion.”
The analyst emphasized the performance from RBC’s domestic banking business has helped to boost its net interest income guidance.
“Excluding HSBC Canada, segment PTPP was up 13 per cent, tied for the highest level of growth we’ve seen this quarter,” he said. “Performance reflected 2-per-cent operating leverage, good volume growth and NIM expansion. Spreads expanded by 7 basis points quarter-over-quarter. Management cited strong margins on demand deposits and better than expected spreads on mortgages and GICs as factors. Barring intensification of competitive factors, RY expects segment NIM to expand this year. Concurrently, the bank increased its 2025 NII growth guidance to high single-digits/low double-digits from high single-digits at a consolidated level. Excluding trading NII, growth was 27 per cent year-over-year this quarter (up 17 per cent excluding trading NII and HSBC Canada).”
Expecting buybacks to continue and adjusting his forecast to reflect the expectation for higher NII, offset by higher PCLs, Mr. Dechaine increased his target for RBC shares to $190 from $188, maintaining an “outperform” recommendation. The average target on the Street is $177.95, according to LSEG data.
Elsewhere, other analysts making target changes include:
* Canaccord Genuity’s Matthew Lee to $198 from $191 with a “buy” rating.
“RY reported Q1 results [Thursday] morning that featured a sizeable earnings beat on the back of across-the-board PTPP strength,” said Mr. Lee.. “While the firm’s PCL ratio of 42 basis points was somewhat of a negative surprise, management’s reiteration of F25 guidance (mid-30bps impaired) gives us confidence that credit will revert to a normalized cadence for the remainder of the year. In our view, the quarter had more positives than negatives and generally supports Royal’s premium ROE expectations. In particular, we were impressed by the bank’s Canadian loan growth and investment banking performance, both of which were top-of-the-industry. Looking ahead, we continue to forecast durable growth for RY driven by 1) continued C&IB and wealth strength, 2) a ramp in HSBC synergies, and 3) loan book expansion across its entire business.
“In our view, RBC’s performance continues to justify its premium valuation (12.5 times NTM [next 12-month] P/ E, 1.8 times P/BV).”
* TD Cowen’s Mario Mendonca to $178 from $180 with a “hold” rating.
“RY’s funding advantages continue to support solid NIM and double-digit growth in 2025. Operating leverage should remain strong as the bank benefits from HSBC synergies. Credit was disappointing, but we note that one very large exposure accounted for the majority of the increase in formations. While RY remains the premium bank in the sector, this quarter does not support a widening of the premium,” said Mr. Mendonca.
* Jefferies’ John Aiken to $195 from $192 with a “buy” recommendation.
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While warning its shares could remain range-bound in the near term, Desjardins Securities analyst Doug Young is “warming up” to Toronto Dominion Bank (TD-T) despite first-quarter 2025 financial results that he deemed “neutral to slightly negative.”
“While cash EPS beat our estimate, adjusted pre-tax, pre-provision (PTPP) earnings were in line,” he added. “We lean toward slightly negative because the cash EPS beat was driven by lower PCLs, and the US P&C banking division missed.”
TD shares closed 0.7 per cent higher on Thursday after it reported cash earnings per share of $2.02, exceeding Mr. Young’s $1.94 estimate and the Street’s expectation of $1.96. The beat was driven by better-than-anticipated performances from its Canadian P&C banking, wealth management and insurance, and capital markets business. Its U.S. P&C banking and corporate segments fell short of projections.
“Positives. (1) Canadian P&C banking adjusted PTPP earnings were 1 per cent above our estimate. (2) Wealth management had a good quarter. (3) The PCL rate was 50 basis points, below our 53 basis points estimate, and new gross impaired loan formations declined sequentially; however, we were surprised there wasn’t a build in performing loan PCLs,” said Mr. Young. “As it relates to the performing loan PCL, a model refinement in the U.S. and an improved macro outlook in Canada resulted in a release, which was offset by an overlay related to macro and geopolitical uncertainties; combined with various other items, this netted to a $4-million release. The total PCL rate could be worse than the 45–55 basis points FY25 guidance if macro conditions deteriorate. (4) The U.S. AML [Anti-Money Laundering] remediation process seems to be on track.
“Concerns. (1) US P&C banking adjusted PTPP earnings were below our expectations, driven by higher expenses. That said, we see an improving return profile for this division over the coming year, specifically from the balance sheet restructuring. (2) The all-bank adjusted expense ratio was above our forecast, with the delta mostly from US P&C banking.”
With increases to his 2025 and 2026 earnings expectations, Mr. Young increased his target for TD shares to $92 from $85, keeping a “hold” recommendation. The average target on the Street is $89.50.
Other analysts making target adjustments include:
* RBC’s Darko Mihelic to $87 from $86 with a “sector perform” rating.
“Q1/25 was solid and helps us put together a better (not complete) picture of earnings power for TD,” said Mr. Mihelic. “Another bond portfolio repositioning, a restructuring, and further buybacks are all possible upside to our current model for the U.S. business. Similarly, there are still risks (eg. AML look back/expenses, credit quality) that should also be considered. With recent stock performance and improved valuation off a low level, we see the stock as having balanced upside versus downside. On higher EPS estimates, we slightly increase our price target.”
* Canaccord Genuity’s Matthew Lee to $100 from $95 with a “buy” rating.
“To call TD’s F24 eventful would be an understatement. As an analyst team with a constructive view on the stock, we were happy to see F25 start in perhaps a more ordinary fashion with the company delivering EPS essentially in line with our estimates and consensus. Our key takeaway was the firm’s confidence in the scope of its AML spending, assuaging concerns that costs could escalate from the US$500-million guided to in Q4. The US AML remediation efforts also appear to be well on their way with the firm beginning its 10-per-cent asset reduction and portfolio repositioning with a US$32-bilion reduction in assets and a US$25-billion reduction in borrowings. Management expects to see consistent quarter-over-quarter ROE expansion in the US business, increasing from the 8.6 per cent reported this quarter. While the stock has performed well year-to-date, we maintain our BUY rating given our expectation,” said Mr. Lee.
* National Bank’s Gabriel Dechaine to $84 from $80 with a “sector perform” rating.
“Excluding variable compensation, we estimate TD’s adjusted expense growth was 8 per cent, above the high end of its 5-7-per-cent annual guidance range,” said Mr. Dechaine. “The bank is guiding to similarly elevated expense growth during Q2/25, with moderation in the second half that will enable it to meet its full-year target. We note that, aside from AML remediation costs, TD’s expense growth is being influenced by investments that are expected to accelerate growth.”
* CIBC’s Paul Holden to $96 from $94 with an “outperformer” rating.
“TD printed a solid quarter with U.S. earnings coming in better than feared, no margin compression in Canada P&C Banking and no negative credit surprises. We continue to believe there is upside to estimates with U.S. balance sheet repositioning (management guidance is conservative) and feel reassured that expenses are under control. Our EPS estimates increase for higher U.S. NII,” said Mr. Holden.
* BMO’s Sohrab Movahedi to $95 from $90 with an “outperform” rating.
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Canadian Imperial Bank of Commerce (CM-T) had “a clean quarter with strength across the board,” according to RBC Dominion Securities analyst Darko Mihelic.
“While performing PCLs [provisions for credit losses] were lower than we expected, CM’s build was larger relative to peers and sizeable compared to its performing PCLs last quarter,” he said. “The core banking NIM increased 3 basis points quarter-over-quarter, a strong result in our view (the quarter-over-quarter increase in its NIM is second highest this quarter). We believe this momentum can continue and have increased our core EPS estimates (our revenue expectations more than offset higher PCL assumptions).”
“Sequential movements in CM’s core banking NIM, revenues, and pre-provision pre-tax (PPPT) earnings were either in line with or stronger than the group average this quarter. We are impressed with the increase in CM’s core banking NIM and believe that some of the strength here can continue – we now model a core banking NIM of 1.86 per cent in 2025 (our previous estimate was 1.81 per cent).”
CIBC shares dipped 0.4 per cent on Thursday after it reported adjusted earnings per share of $2.20, topping both Mr. Mihelic’s estimate of $1.72 and the consensus projection of $1.97. He attributed the beat to higher-than-anticipated revenue ($7.281-billion versus his $6.874-billion forecast) and lower-than-expected PCLs ($573-million versus $799-million).
“In our model, we estimate higher revenues than before as we expect strong net interest margins can largely continue, which more than offset reduced loan growth assumptions,” the analyst said. “In Canadian Personal and Business Banking, we now assume a large performing PCL build to occur in Q2/25 and we raise our impaired PCL ratio assumptions through the rest of our forecast period. With a few other smaller tweaks, our earnings estimates increase overall. CM intends to use the full amount of the authorized buyback and hence we now assume 5.8 million share buybacks in each of the next 2 quarters (we previously assumed 2.5 million share buybacks per quarter).”
Citing the combination of higher earnings estimates and lower share count increases, Mr. Mihelic increased his 2025 and 2026 core EPS forecasts to $7.84 and $8.60, respectively, from $7.57 and $8.28.
With those changes, he raised his Street-high target for CIBC shares to $108 from $103, reiterating an “outperform” rating. The average is $94.56
Elsewhere, others making target adjustments include:
* Desjardins Securities’ Doug Young to $102 from $100 with a “buy” rating.
“Adjusted pre-tax, pre-provision (PTPP) earnings and cash EPS were above our estimates and consensus,” said Mr. Young. “While capital markets was an important contributor to the beat, so were Canadian and US P&C banking, and wealth management. We like the NIM, expense, CET1 ratio and stock buyback themes, but acknowledge that macro/geopolitical uncertainties will weigh on bank sentiment.”
* National Bank’s Gabriel Dechaine to $101 from $100 with an “outperform” rating.
“Q1/25 PCLs were 6 per cent above forecast, with the deviation due entirely to higher performing provisions (by 60 per cent), whereas impaired provisions were lower than expected (by 3 per cent),” he sai. “We note the impaired PCL ratio of 31bps was below management’s mid-30s full-year guidance range, which had anticipated higher losses at the start of the year. CM reiterated this guidance, which we believe is reasonable considering the environment. As we have done for other banks, we have doubled our Q2/25 performing provision forecasts, resulting in a full-year PCL ratio of 41bps (was 35bps).”
* TD Cowen’s Mario Mendonca to $99 from $100 with a “buy” rating.
“We view the quarter favourably in several respects: a) solid PTPP despite elevated spending particularly in the U.S., b) solid NII and NIM performance, c) good growth in market-sensitive, higher ROE business, and d) solid credit metrics. In our view, results support a higher relative P/E. CIBC repurchased 3.5 million shares in Q1/25 and stated its intention to complete the NCIB,” said Mr. Mendonca.
* Canaccord Genuity’s Matthew Lee to $97 from $96 with a “hold” rating.
“CM reported solid Q1 results this morning with EPS beating our estimates on trading strength and solid NIM expansion. We were impressed by the firm’s margin in both Canada and the U.S., which we see as a reflection of management’s prudence around profitability and focus on deposits. Along with strong fee-based revenues from Wealth and Capital Markets, we believe that CM will be able to reach its 7-10-per-cent EPS growth expectation for the year. Credit was robust in the quarter with 31bps of impaired coming in below our forecast and the firm’s mid-30bps expectation for F25,” said Mr. Lee.
* Jefferies’ John Aiken to $100 from $103 with “buy” rating.
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National Bank Financial analyst Maxim Sytchev sees “no structural change to the growth algorithm” for WSP Global Inc. (WSP-T) following a fourth-quarter 2024 financial result that topped expectations on the headline results while falling short on EBITDA margin.
“There are always puts and takes in any business, and while we certainly agree that the general directionality of company’s operations have been extremely impressive, a temporary retraction in APAC [Asia-Pacific] is just that, temporary,” he said. “At the same time, when expectations rise as represented by 28 times NTM [next 12-month] P/E multiple, the hurdle becomes higher. We have full confidence in WSP’s growth algorithm, but we do suspect that next leg of share price advancements needs to come from M&A as it’s hard to bank on further multiple expansion, especially in light of U.S. peers’ valuation compression given materially greater exposure to Federal work (thankfully, WSP’s presence there is limited at around 4% and the company typically works directly at state level, a structural difference vs. some U.S. peers). Long-term upside in WSP shares remains material given the market’s fragmentation, WSP’s M&A and operational track record and, of course, those ambitions of doubling the size of the company at potentially 22-per-cent EBITDA margin.”
Shares of the Montreal-based company slipped 1.5 per cent on Thursday after it reported quarterly revenue of $3.394-billion, up 23 per cent year-over-year on a consolidated basis and 6 per cent above the expectations of both Mr. Sytchev ($3.142-billion) and the Street ($3.214-bilion). Adjusted EBITDA, included IFRS 16 leases, came in at $634-million, marking an 18.2-per-cent margin (down 0.36 per cent year-over-year) but 3 per cent above projections ($606-million and $613-million, respectively). Adjusted earnings per share of $2.34 topped estimates of $2.27 by 3 per cent as well.
Following its conference call with analysts, Mr. Sytchev said WSP appears to be “confidently entering the next strategic cycle,” expecting North American growth to be broad-based and a rebound in APAC.
“Management’s 2025 to 2027 mid-to-high single digit organic revenue growth guidance for Canada and the U.S. is based on momentum across all business verticals, highlighting the high quality nature of the company’s high-quality, diversified end-market exposure,” he said. “Management also views U.S. support for infrastructure spending as largely bipartisan in nature. The Power acquisition is performing well with 16-per-cent year-over-year organic revenue growth in Q4/24 and revenue synergy opportunities are significant. The backlog is expected to be rebuilt with Earth & Environment work ramping up in the spring.”
“The company continues to restructure its Asian operations amid continued market softness, and we expect margins will eventually rebound to more ‘normalized’ levels. A similar inflection is expected in New Zealand (where a new government took a pause on infrastructure spending) and Australia, which should help longer-term margin progression given work in these regions carries structurally higher profitability.”
After modest adjustments to his forecast to reflect the company’s guidance, Mr. Sytchev raised his target to $292 from $282, keeping an “outperform” rating an seeing an increasingly likelihood of large-scale M&A activity. The average on the Street is $288.21.
“Given the fragmented nature of the global engineering consulting industry, management expects M&A to be a prominent part of the global landscape over the next number of years despite a slower H1/25E as players seek more clarity on and digest the macro/political landscape. Increasingly complex projects will also favour larger firms with a broader and deeper set of expertise, further driving consolidation,” he said.
Elsewhere, others making changes include:
* RBC’s Sabahat Khan to $289 from $279 with an “outperform” rating.
“WSP continues to execute well against the strong demand backdrop, with organic NR [net revenue] growth of 10.0 per cent year-over-year (up 7.6 per cent adjusted for extra billable days), reflecting 16.1-per-cent organic growth in Americas (notably, POWER delivered 16-per-cent organic growth in Q4 as well; this is prior to any revenue synergies, which we believe could be meaningful over time), 10.9 per cent in Canada, and 8.1 per cent in EMEIA,” said Mr. Khan. “APAC was again a soft spot (down 1.3 per cent), driven by contraction in Asia and subdued market conditions in New Zealand (due to a recent change in government, which has caused a temporary pause in infrastructure spending as the new government reassesses priorities), while WSP also recently finished a number of large projects in Australia (and subsequently demobilized part of the workforce). On profitability, Adjusted EBITDA margin in the quarter was down 36 basis points year-over-year to 18.7 per cent (still strong and within WSP’s guidance range), driven by year-over-year declines in Americas (due to lower-margin emergency response/FEMA work in the U.S.) and most notably APAC (WSP undertook restructuring activities in Asia to set up the business for the upcoming 3-year cycle; ex. Asia, the margin in Australia/New Zealand was up 190 basis points year-over-year). Overall, WSP beat Street forecasts across the board, and we believe the company remains well positioned for 2025.”
* CIBC’s Krista Friesen to $295 from $293 with an “outperformer” rating.
“WSP finished 2024 on a high note, and given the company’s next three-year plan that was unveiled at its Investor Day two weeks ago, we believe there are several more years of strong growth ahead for the company. With Q4 results, WSP highlighted the strength it is already seeing from its POWER acquisition, noting that at this point we have yet to even see the revenue synergies from the transaction,” she said.
* Canaccord Genuity’s Yuri Lynk to $305 from $290 with a “buy” rating.
“WSP reported another solid quarter featuring 18-per-cent year-over-year adjusted-EPS growth and solid FCF. WSP, in our view, remains a core holding within the industrials space given its exposure to several attractive end markets such as environmental consulting, the infrastructure build out, and the energy transition. Moreover, management has a demonstrated track record of delivering consistent organic and inorganic growth accompanied by steady improvements in EBITDA margin making WSP one of the best compounders in the space, in our view,” said Mr. Lynk.
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While its fourth-quarter 2024 results were “light” versus expectations, Raymond James analyst Steve Hansen upgraded Superior Plus Corp. (SPB-T) to an “outperform” recommendation from “sector perform” previously, seeing its guidance as “solid” and touting potential gains from its efficiency plan.
“We are upgrading our rating on .... based upon: 1) improving propane fundamentals (colder weather); 2) faster-than-expected ‘Superior Delivers’ progress; 3) better-than-expected Certarus results (and outlook); 4) accelerating buybacks; and 5) the stock’s heavily discounted valuation,” he said.
Mr. Hansen’s target rose to $9.50 from $9. The average is $9.20.
Others making changes include:
* Desjardins Securities’ Gary Ho to $9.25 from $8.75 with a “buy” rating.
“2025 guidance is within expectations, but we are encouraged by management’s conviction on Superior Delivers’ total US$50-milllion benefit, coupled with favourable weather year-to-date. Tempered capex and the previously announced dividend cut enable SPB to aggressively pursue its NCIB, providing share price support while still being able to deleverage by 0.5 times this year. The investor day on April 2 could be the next catalyst. We see the update as positive,” said Mr. Ho.
* National Bank’s Patrick Kenny target to $6.50 from $6 with a “sector perform” rating.
* Scotia’s Ben Isaacson to $7.50 from $7 with a “sector perform” rating.
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In other analyst actions:
* Stifel’s Justin Keywood raised his Andlauer Healthcare Group Inc. (AND-T) target to $53 from $52 with a “buy” rating, while TD Cowen’s Tim James cut his target to $53 from $54 with a “buy” rating. The average is $49.08.
“Andlauer reported strong Q4 EBITDA margins, 26 per cent (vs. 25.5-per-cent estimate), despite U.S. headwinds, leading to flat overall growth (up 2 per cent year-over-year estimate),” said Mr. Keywood. “We are encouraged with the margin strength in the context of 4-7-per-cent organic growth to return in 2025, factoring in ‘mid-to-high’ single digits in Canada (85 per cent of sales) and U.S. headwinds (15 per cent). The high margins convert to plenty of FCF, $100-milllion in 2025, bolstering dry powder for M&A, NCIB or SIB ($400-million capacity) with current leverage, 0.87 times. AND trades at 11 times NTM [next 12-month] EBITDA, vs. a three-year low, 9 times, high 15 times and lower margin U.S. trucking comps at 9x. We believe AND should be valued closer to cold-storage peer, Lineage (LINE), with similar margins at 16 times. Scale and widening Andlauer’s moat through organic expansion and M&A could help close the valuation gap with LINE.”
* CIBC’s Mark Jarvi raised his target for Atco Ltd. (ACO.X-T) to $59 from $58, keeping an “outperformer” rating, while Scotia’s Robert Hope increased his target to $53 from $51 with a “sector perform” rating.. The average on the Street is $52.33.
“Canadian Utilities (CU) results were in line with our expectations, while ATCO beat our and consensus estimates. Our 2027 CU EPS estimates increase to reflect additional Yellowhead Mainline spend and lower Corporate expenses, partially offset by an ATCO Australia forecast below our expectations. We also increase our ATCO estimates to reflect our higher CU estimates as well as a stronger Structures contribution,” said Mr. Hope.
* Mr. Jarvi cut his Northland Power Inc. (NPI-T) target to $28, below the $28.23 average, from $29 with an “outperformer” rating. Other changes include: Raymond James’ Daniel Magder to $29 from $30 with an “outperform” rating and TD Cowen’s Sean Steuart to $24 from $23 with a “buy” rating.
“No surprises with Q4/24 results, and 2025 guidance ranges are close to expectations (modest reduction in our FCF/share outlook). Management defended dividend sustainability through the back half of a busy capex schedule the next two years. NPI’s prospective development pipeline is deep and available liquidity provides options, but we do not expect clarity on mid-term growth priorities until H2/25,” said Mr. Steuart.
* CIBC’s Krista Friesen increased her Boyd Group Services Inc. (BYD-T) target to $281 from $276 with an “outperformer” recommendation, while RBC’s Sabahat Khan hiked his target to $282 from $269 with an “outperform” rating. The average is $271.23.
" Boyd introduced its 2024–29 targets [Wednesday], which call for meaningful top-line growth (10-per-cent CAGR, driven by organic growth + M&A + new store openings) and Adj. EBITDA margin expansion (back to pre-COVID levels). Overall, we believe the company’s targets are achievable and point to management’s confidence in the business/industry returning toward historical trends,” said Mr. Khan.
* TD Cowen’s Graham Ryding moved his target for Element Fleet Management Corp. (EFN-T) to $34, above the $33.44 average, from $33 with a “buy” rating. Other changes include: Stephen Boland to $36 from $34 with a “strong buy” rating and BMO’s Tom Mackinnon to $33 from $32 with an “outperform” rating.
“Q4/24 results were softer than expected due to lower revenue (lower gains on sale within net finance revenue and syndication revenue). Higher expenses weighed on margins. However, management reiterated what we view as constructive guidance for 2025, including lower expense growth and originations expected to pick up (H1/25),” said Mr. Ryding.
* Raymond James’ Michael Barth bumped his Enerflex Ltd. (EFX-T) target to $17.75 from $17 with an “outperform” rating, while BMO’s John Gibson cut his target to $16 from $20 with an “outperform” recommendation. The average is $15.09.
“EFX’s recent share price performance (starting with the DeepSeek news in late January) has been disappointing, but the business continues to outperform both our expectations and consensus. Our target actually moves higher given what we see as an improving outlook, and it’s our view that consensus estimates are too low for 2025/2026. While NCIB timing remains elusive (likely frustrating some investors), we would be surprised not to see a buyback program implemented this year. Valuation looks increasingly compelling to us given the pullback, and we reiterate our Outperform rating,” said Mr. Barth.
* Scotia’s Konark Gupta trimmed his Exchange Income Corp. (EIF-T) target to $64 from $65 with a “sector outperform” rating, while Canaccord Genuity’s Matthew Lee raised his target to $75 from $72 with a “buy” rating. The average is $69.70.
“We maintain our SO rating while tweaking our target to $64 (was $65), despite our improved EBITDA outlook, due to higher-than-expected net debt exiting 2024 and extended capex cycle amid ongoing aircraft delivery delays,” he said. “Q4 met our expectations as aviation segment came in ahead while manufacturing missed, similar to recent quarters. Management maintained guidance with a positive view on both segments, noting upside risk from potential M&A (including the recently announced Canadian North deal). The company doesn’t expect any meaningful impact of potential tariffs on overall business, with tailwinds for certain subsidiaries and headwinds for some others. Valuation remains reasonable at 6.9 times EV/EBITDA on 2025E, roughly in line with long-term average.
* RBC’s Ryland Conrad trimmed his Jamieson Wellness Inc. (JWEL-T) target to $40 from $41 with an “outperform” rating, while National Bank’s Zachary Evershed cut his target to $39.50 from $42 with an “outperform” rating. The average is $41.43.
“While Q4/24 results and 2025 guidance were mixed on slightly lower revenues, adjusted EBITDA was importantly in-line across the board and we largely attribute the revenue variance to a new revenue reporting structure for the U.S. business,” said Mr. Conrad.
* CIBC’s Stephanie Price lowered her Kinaxis Inc. (KXS-T) target to $170 from $175 with a “neutral” rating. Other changes include: ATB Capital Markets’ Martin Toner to $210 from $215 with an “outperform” rating and RBC’s Paul Treiber to $210 from $200 with an “outperform” rating. The average is $195.21.
“Kinaxis’ Q4 net new ARR [annual recurring revenue] surprised to the upside and FY25 guidance was better than feared. While the quarter wasn’t perfect (e.g. light RPO growth), we believe the setup for the stock is attractive here. We see the pending new CEO announcement and improving SaaS and ARR growth as potential catalysts for the stock, which is currently trading at a trough valuation, well below peers,” said Mr. Treiber.
* TD Cowen’s Menno Hulshof trimmed his MEG Energy Corp. (MEG-T) target to $32 from $33, remaining above the $31.57 average, with a “buy” rating.
“Q4/24 production and CFPS were right in-line with expectations,” he said. “Production averaged 100mbbl/d, including a well-communicated unplanned outage in Nov. MEG returned 106 per cent of Q4 FCF through buybacks and base dividends, after transitioning to 100-per-cent return of FCF in Oct. (vs. 50 per cent prior). The Christina Lake capacity expansion to 135mbbl/d is tracking per expectations.”
* RBC’s Greg Pardy raised his Ovintiv Inc. (OVV-N, OVV-T) target to US$55 from US$53 with a “sector perform” rating, while TD Cowen’s Gabe Daoud dropped his target to US$59 from US$68 The average is US$59.30.
“Ovintiv delivered another solid quarter punctuated by balance sheet deleveraging, an important driver of the stock’s relative performance in our eyes,” Mr. Pardy said.
“Ovintiv posted solid fourth-quarter results amid production of 579,900 boe/d (52-per-cent oil & liquids), better cost performance, and lower current taxes. The company’s success in claiming R&D credits and evolving corporate alternative minimum tax regulations in the US drove lower cash taxes.”
* Desjardins Securities’ Jerome Dubreuil increased his target for Quebecor Inc. (QBR.B-T) by $1 to $39 with a “buy” rating. Other changes include: Canaccord Genuity’s Aravinda Galappatthige to $39.50 from $37 with a “buy” rating and Scotia’s Maher Yaghi to $36 from $37 with a “sector perform” rating. The average is $37.71.
“QBR is successfully progressing on its national expansion, achieving notable wireless market share gains outside of Quebec,” said Mr. Dubreuil. “We are, however, concerned with the cable business, which is affected by protracted intense competition in Quebec. Overall, QBR’s success-based capex approach enables it to generate robust FCF, which, combined with strong capital allocation, makes the stock attractive, in our view.”
* TD Cowen’s Jonathan Kelcher resumed coverage of Sienna Senior Living Inc. (SIA-T) with a “buy” rating and $20 target following its $144-million equity offering. Other changes include: Scotia’s Himanshu Gupta to $18.50 from $18 with a “sector outperform” rating, BMO’s Michael Markidis to $18 from $17 with an “outperform” rating, Desjardins Securities’ Lorne Kalmar to $18 from $19 with a “buy” rating, National Bank’s Giuliano Thornhill to $19.25 from $19 with an “outperform” rating and CIBC’s Dean Wilkinson to $18 from $19 with a “neutral” rating. The average is $18.58.
“2024 finished strong, with operating momentum and favourable industry fundamentals expected to carry into ‘25. Acquisitions remain a focus as SIA scales its portfolio. LTC development completions in late ‘25 should help ‘26 AFFO growth accelerate,” Mr. Kelcher said.
* TD Cowen’s Graham Ryding bumped his Sprott Inc. (SII-T) target to $71 from $70 with a “buy” rating. The average is $64.83.
“Base EBITDA was in-line, with higher management fees offset by lower than expected performance fees,” said Mr. Ryding. “Flows for exchange-listed products were positive, although outflows from managed equities and private strategies more than offset. Market performance drove solid AUM growth. Margin expansion was evident in Q4/24 (and 2024), and we model this to persist.”
* RBC’s James McGarragle cut his Stella-Jones Inc. (SJ-T) target to $75 from $81 with a “sector perform” rating, while Desjardins Securities’ Benoit Poirier raised his target to $98 from $93 with a “buy” rating. The average is $85.
" SJ reported a good Q4 and provided commentary on the outlook that we would characterize as in line. The market reaction however was a little more positive than we would have expected, with the shares trading up 4 per cent [Thursday]. Our view on the stock remains that it is fairly valued at 9 times NTM [next 12-month] consensus EV/EBITDA. Our estimates call for mostly flat EBITDA out to 2026 - given this growth backdrop, combined with stable end markets and solid execution from management, we continue to see current valuation as fair and believe the shares are fully valued at current prices,” he said.
* Desjardins Securities’ Chris MacCulloch increased his target for shares of Veren Inc. (VRN-T) to $11 from $10.50 with a “buy” rating, while Canaccord Genuity’s Mike Mueller bumped his target to $12.50 from $12 with a “buy” rating. The average is $11.29.
“We are increasing our target ... reflecting positive estimate revisions following the release of 4Q24 results,” Mr. MacCulloch said. “Specifically, we are adjusting our outlook on the heels of recent well performance, which we view as a positive first step in restoring investor confidence in the story. That said, we believe the market will need to see several additional quarters of operational outperformance and successful well results at Gold Creek before rewarding the stock with an improved multiple.”
* Following a fourth-quarter revenue and earnings miss, National Bank’s Ahmed Abdullah trimmed his Winpak Ltd. (WPK-T) target to $53 from $55 with an “outperform” rating, while CIBC’s Hamir Patel cut his target to $49 from $54 with a “neutral” rating. The average is $51.33.
“WPK remains optimistic about its 2025 but qualified its outlook by noting that “there is significant uncertainty regarding the nature, extent and duration of various protectionist trade measures that have been and may be enacted within North America and the consequential impact on economic growth, inflation, foreign exchange and interest rates in addition to the immediate impact on the Company’s cost structure,” said Mr. Abdullah. “The Company has assessed and will continue to assess both the short-term and long-term countermeasures that can be undertaken to mitigate the potential negative impacts”. WPK sees sales volume growth of 5 per cent to 7 per cent in 2025 (was 4 per cent to 6 per cent, NBF at 5.5 per cent). This is primarily driven by new opportunities with new and existing customers within pet food, IML, dairy and healthcare businesses.”