Inside the Market’s roundup of some of today’s key analyst actions
In response to Thursday’s post-market release of better-than-anticipated third-quarter 2025 results and “impressive” guidance for the fourth quarter, Stifel analyst Martin Landry thinks Aritzia Inc.’s (ATZ-T) “success drivers appear broad-based” and now sees international expansion as the “logical next step.”
“Management has executed an impressive turnaround over the last year and now the company is reaping the benefits,” he said. “Success appears broad-based with a balanced assortment of new styles and client favorite, the right amount of inventory limiting out-of-stock positions, a record pace of store opening, capitalizing on the flagship openings to re-energize the brand, savvy digital marketing, favorable weather which turned cold at the right time, all of that during the most important shopping period of the year. We do not expect that comparable sales growth in the high teens is sustainable, but recent momentum could carry early into fiscal 2026.”
“Aritzia already ships its products to more than 180 countries, despite the company only having stores in Canada and the United States. We believe that international expansion outside of North America is not too far out for the company. As such, Aritzia’s flagship location in New York City’s 5th avenue, which attracts international tourists, could be helpful in increasing ATZ’s exposure to international customers. Current investments in the digital platform and the eventual launch of mobile app would also be essential in enabling ATZ to increase its focus to international sales.”
The Vancouver-based women’s clothing retailer reported quarterly revenue of $729-million, up 11.5 per cent year-over-year and exceeding both Mr. Landry’s estimate of $709-million and the Street’s projection of $700-million. Comparable sales grew by 6.6 per cent year-over-year, well ahead of both the analyst’s 1.4-per-cent expectation of 1.4 per cent and consensus of 1.5 per cent. With gross margin also improving at a faster rate than anticipated, adjusted earnings per share landed at 71 cents, up 53 per cent from the same period a year ago and higher than both Mr. Landry’s forecast of 60 cents and the Street’s 62-cent expectation.
Aritzia’s profit soars 72% as retailer reports record holiday sales
The company also introduced fourth-quarter guidance that was deemed “strong” by the analyst, calling for revenue growth of 28-31 per cent year-over-year, adjusting for an extra week, driven by impresssive comparable sales growth in the high teens. He thinks that should translate into revenues of $830-850-million, higher than Mr. Landry’s previous forecast of $786-million and the Street’s estimate of $776-million.
“The magnitude of the Q4FY25 revenue boost should be enough to consolidate the recent gains and send the shares higher [Friday],” he said. “Aritzia has had a strong performance during the Black Friday period and this momentum continued unabated into December. Success appears broad based with good traction for new styles, good inventory availability, increased brand awareness with the new company’s flagships stores and strong performance online. Hence, we expect to see upward revision to consensus estimates reflecting Aritzia’s momentum. Management also reiterated its confidence in attaining the FY27 long-term financial targets calling for revenues of $3.6-3.8 billion and EBITDA margins of 19 per cent.”
Mr. Landry raised his fiscal 2026 and 2027 revenue and earnings projections, leading him to increase his target for Aritzia shares by $4 to $70 while reiterating a “buy” recommendation. The average target on the Street is $69.93, according to LSEG data.
“In October 2022, at the company’s investor day, management established a four-year plan which called for revenues to reach $3.5 to $3.9 billion by FY27 and for EBITDA margin to stand at 19 per cent,” he said. “Given the missteps which occurred in FY24, investors became septic on the company’s ability to hit the targets discussed at the investor day. However, with the recent sales performance and margin recovery, these targets now appear more realistic and attainable. As we get more visibility on these targets, earnings estimates and valuation should increase.”
Elsewhere, other analysts making target adjustments include:
* Raymond James’ Michael Glen to $65 from $58 with a “market perform” rating.
“Heading into the F3Q results, Aritzia stock traded had traded well, and we believe investors were expecting a beat-and- raise scenario,” he said. “And while we had some concerns surrounding the ‘raise’ part of this equation, such concerns were put to rest in a substantial way with the company providing a very strong sales outlook for F4Q. We expect the focal point for investors today will be the $830-850 million revenue guidance for F4Q, with management referencing that they exited F3Q with comp growth in the high teens as trends accelerated through each month in F3Q, meaningfully in November, with further acceleration in F4Q. The items underlying the performance have been a positive response to fall and winter product, optimized inventory position, favourable weather, investments in marketing spend that drove e-commerce traffic, as well as strength in the U.S. retail channel from new store / reposition contributions. From that perspective, while we had viewed the F3Q guidance as a low hurdle, we would regard the F4Q revenue guidance as a much more aggressive hurdle and one that is more in-line with the rate of growth we would expect to see from the company given new store openings and square footage growth. Moving forward out of the F4Q report, we would expect investors to pay extremely close attention to alternative data reports (including those provided from Bloomberg). We will definitely acknowledge that our decision to downgrade was premature in hindsight, as we expect the stock will respond quite favourably to the F3Q update. That said, beyond what we see from the shares on Friday, our messaging for investors is to remain opportunistic in looking for an entry point in the stock.”
* RBC’s Irene Nattel to $73 from $65 with an “outperform” rating.
“Strong and better than expected Q3/F25 and momentum point to ATZ returning to strong pre-pandemic/pre-investment spending growth trajectory,” she said. “ATZ is seeing growth across channels and regions, even in Canada despite cautious consumer spending. We are raising F25-F27 EPS forecasts by 9-18 per cent to reflect Q3/Q4 momentum, pipeline of new store openings, returns on initiatives/investments in ecommerce, leverage on fixed costs. Reiterating constructive OP rating, price target to $73 (+$8) on upward revision to forecasts.”
* TD Cowen’s Brian Morrison to $75 from $68 with a “buy” rating.
“Aritzia’s Q3/F25 results cemented the completion of its successful turnaround and the foundation to capitalize on a material growth runway in the U.S. is in place. Its growth outlook stems from product resonation, an acceleration of store openings, and eCommerce penetration. Combined with cost initiatives/leverage Aritzia is positioned for attractive EPS/FCF growth, warranting a premium valuation,” said Mr. Morrison.
* CIBC’s Mark Petrie to $75 from $63 with an “outperformer” rating.
“Q3 results were ahead of expectations driven by better-than-expected top-line growth in both U.S. and Canada. Importantly, momentum has actually accelerated into Q4 and this supports a revenue guide well above previous expectations. ATZ is delivering on the growth opportunity in the U.S. and with consistent execution, this will continue into F2026 and beyond,” he said.
* Canaccord Genuity’s Luke Hannan to $70 from $62 with a “buy” rating.
“In our view, given its healthy track record of comparable sales growth, robust pipeline of new selling square footage coming online, and healthy balance sheet to support growth and margin enhancement initiatives, we believe Aritzia is deserving of a premium valuation,” he said.
* BMO’s Stephen MacLeod to $68 from $65 with an “outperform” rating.
“We view Aritzia as an attractive Canadian growth story, with unique market positioning and a significant opportunity to drive growth in the U.S. Aritzia is transitioning to a period of revenue acceleration and margin expansion in F2025E & F2026E, which in our view should drive strong stock price performance. We see attractive risk-reward in the stock, and fundamental tailwinds outweigh headwinds,” he said.
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BlackBerry Ltd.’s (BB-N, BB-T) sale of its Cylance endpoint security assets is likely to change investors’ perception of the Waterloo, Ont.-based company, according to RBC Dominion Securities analyst Paul Treiber.
“While QNX has historically accounted for the majority of BlackBerry’s valuation, the company’s struggling Cybersecurity unit (i.e. Cylance) limited investor interest in the stock,” he said in a note titled QNX is the new BlackBerry.
“Following the sale of Cylance, we believe investor sentiment in BlackBerry’s shares may rise, given: 1) QNX’s improving fundamentals; 2) higher investor visibility to QNX; and 3) a potential divestiture of BlackBerry’s Secure Communications unit.”
After meeting with its management team at the Consumer Electronics Show in Las Vegas this week, Mr. Treiber said new production vehicles “validate” QNX’s value proposition and sees developer support driving its long-term growth
“The 2025 Volvo EX90 is an example of QNX winning more sockets and layers in modern vehicles,” he said. “The EX90 features QNX as the OS and hyperscaler in 3 domains: virtual cockpit (including QNX sound), ADAS and body/chassis control. Given development challenges, auto OEMs are shifting away from trying to develop a full software stack to instead utilizing QNX as the OS and middleware layers. In modern vehicles, we see QNX’s ARPU per vehicle moving from mid single digits to low-to-mid teens.”
“Developer support is crucial for broader adoption of QNX. QNX Cabin is a cloud-based software development framework for digital cockpits and reflects broader commercialization of the virtual cockpit that it developed for Stellantis last year. There are now two major auto OEMs using QNX Cabin. Also, QNX is making QNX free to academics to help foster adoption in more vertical markets. Management sees GEM (general embedded market) as a long-term growth opportunity beyond auto.”
Those changes coincide with more noticeable promotion of the business, according to Mr. Treiber, who emphasized QNX is rising in “prominence.”
“At CES, BlackBerry’s booth reflected only QNX branding, with a new unique colour scheme and no mention of BlackBerry,” he said. “While the BlackBerry brand is relevant to its Secure Communications unit, it detracts from QNX. We believe the parent company could potentially re-brand from BlackBerry to QNX at some point, particularly if BlackBerry divests Secure Communications. Re- branding to QNX would reinforce the company as an auto tech provider and could even help lift investor sentiment, in our view.”
“A divestiture of Secure Communications is possible. Following the sale of Cylance, the remaining portion of BlackBerry’s Cybersecurity unit (i.e. Secure Communications) is profitable and stable. However, given the company’s focus on QNX, we believe that a divestiture of Secure Communications is a possibility, particularly if the unit is a drag on the company’s valuation”
Maintaining his “sector perform” recommendation for BlackBerry shares, the analyst raised his target to US$4 from US$3.25. The average is US$3.99.
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National Bank Financial analyst Rupert Merer expects Innergex Renewable Energy Inc. (INE-T) to meet its guidance and exceed the Street’s expectations with its fourth-quarter financial results when it reports on Feb. 19.
In a note released Friday, he reduced his quarterly adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) estimate to $188-million from $198-million, remaining above the consensus forecast of $183-million, driven by a 3-per-cent reduction in his generation forecast.
“INE saw favourable conditions in B.C. hydrology and Quebec wind (its two biggest segments in Q4E), but otherwise saw softer generation across its portfolio,” he said. ”Relative to the peer group, INE’s Q4E looks relatively strong, and we don’t think it should disappoint the street.”
Mr. Merer thinks the Longueuil, Que.-based company’s organic growth pipeline should “deliver solid growth” and its access to capital is now “much improved” even though the broader sector continues to face notable headwinds.
“We believe that INE has now largely completed the construction of its 330 MW Boswell Spring project in the U.S. and it should reach COD in the coming weeks along with completion of its tax equity financing,” he sao. “With the contribution from Boswell, we believe INE could see up to a 20-per-cent increase in EBITDA year-over-year in 2025 with an improvement in the weather too. Beyond this, the company has been the most successful in recent Canadian RFP’s, securing 560 MW of wind in B.C. recently with partners, and 400 MW of wind in Quebec, also with partners.”
“With a cut to its dividend earlier this year and with the benefit of recent refinancing activities, we believe the company can finance its growth without access to equity markets. However, if additional capital is required, asset sales (or a sale of the company) to private equity remain an attractive option. The sector has been hit by rising bond yields and negative political commentary, although we believe the outlook for 2025 remains constructive.”
The analyst reaffirmed his “outperform” rating and $17 target for Innergex shares. The current average is $11.80.
“INE is making the right moves to position itself for its next phase of growth,” he explained. “With this, our $17/sh target is based on a long-term DCF with a cost of equity of 7.5 per cent and provides significant upside potential. Although we don’t believe multiples are effective for valuation in this sector, with the start of Boswell and other moving parts, we have the EV/EBITDA multiple on INE dropping to 9.4 times 2025 estimates from 11.8 times 2024E, which could drive a re-rate on the stock by some.”
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Following Thursday’s release of its 2025 guidance that largely fell in line with expectations, Desjardins Securities analyst Chris MacCulloch sees Canadian Natural Resources Ltd. (CNQ-T) continuing to deliver “an attractive organic growth profile and compelling economic returns, which supports the premium valuation.”
Canadian Natural Resources still budgeting for carbon capture project despite Trudeau resignation
“We have frequently highlighted CNQ as the premier operator within the WCSB, a sentiment that we feel compelled to echo on the heels of its 2025 capital budget and guidance release, even with renewed competition for investor mindshare in the Canadian large-cap space,” he said in a note titled .
“To be clear, there were limited surprises from the update, with investors poised to continue benefiting from an attractive organic growth profile, supplemented by opportunistic M&A and underpinned by industry-leading inventory depth. For context, the company plans to deliver 3–4-per-cent annualized production growth after accounting for recently acquired volumes from the Chevron Canada transaction, a pace consistent with longer-term historical trends, with a continued focus on bitumen and conventional heavy oil prospects offering superior economics.”
Mr. MacCulloch noted the updated lacked details on the strategic direction for the Calgary-based company’s “extensive” natural gas prospects “to the extent that associated volumes are expected to drive the lion’s share of gas-weighted growth.”
“Obviously, this reflects the superior economics of liquids-rich assets in the current environment, although we still believe the company retains opportunities to shift capital toward attractive short-cycle dry gas prospects as commodity prices dictate,” he said. “Either way, we trust the company to continue deploying capital in a prudent manner. Tack on.”
After trimming his 2024 and 2025 production expectations while raising his cash flow forecast, Mr. MacCulloch reiterated a “buy” rating and 12-month target of $57.50 for Canadian Natural shares. The average is $56.08.
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In other analyst actions:
* Barclays’ Raimo Lenschow downgraded Lightspeed Commerce Inc. (LSPD-N, LSPD-T) to “equal weight” from “overweight” and dropped his target to US$18 from US$20. The average on the Street is US$18.91.
“We see 2025 as a better year for IT spending. This means software can be a relative outperformer as estimates inflect higher during the year and with valuation levels only in-line with historical levels. We see a comeback for MSFT, INTU, WDAY in CY25. SNOW moves to OW, LSPD to EW, and BIGC to UW,” he said.
* BMO’s Ben Pham resumed coverage of Algonquin Power & Utilities Corp. (AQN-N, AQN-T) with a US$5 target, down from US$7.50 and below the US$5.50 average, with an “outperform” rating following the sale of its renewable energy business.
“The lower [valuation] multiple reflects slower rate base growth than expected (given the restraint on capex spend),” said Mr. Pham. “While our valuation expansion thesis on the back of a transition to pure-play utility will likely take more time to play out, we believe positive catalysts outweigh negative catalysts and the 18-per-cent potential return still warrants an Outperform rating.”
* Seeing it as “an attractive choice to avoid housing risk,” Raymond James’ Stephen Boland increased his EQB Inc. (EQB-T) target to $121 from $112 with an “outperform” rating. The average is $118.30.
“EQB has a different mix of single-family housing loans compared to the Big 6 banks in Canada,” he said. “Their duration of loans is much shorter than the other larger banks. EQB has disclosed that 90 per cent of their single-family loans have already been renewed, with most paying a lower rate. The CMHC recently released a report on the housing market indicating that over 1.2 million mortgages will renew in 2025 for the first time in years. This indicates a substantial portion of Canadians will be suffering from ‘sticker shock’ as their 3-5 year mortgages renew at higher rates. We believe a substantial portion of these mortgages belong to the Big 6 banks. Notably, 85 per cent of those were contracted when the Bank of Canada rate was at or below 1.0 per cent.
“Additionally, we believe U.S. investors should take advantage of the mismatch in the currency, which is at a ~15 year low for the Canadian dollar. The average ROE for U.S. banks is in the 11.0-per-cent to 12.0-per-cent range. For U.S. investors, they would be buying a 15-per-cent ROE at a 30-per-cent discount on the multiple when factoring in the currency.”
* In response to Tuesday’s released on an updated technical report for its Thacker Pass project, National Bank Financial’s Mohamed Sidibé increased his Lithium Americas Corp. (LAC-T) target to $7.50 from $7.25 with an “outperform” rating. The average is $8.
“Changes from the prior technical report reflect a longer expected mine life over five phases vs. two previously with a doubling of the overall production capacity. LAC also provided an update to its operating and capital cost estimates and highlighted process optimizations from the mine plan to the processing plant with ultimately higher recoveries vs. the prior technical report,” he said.
* Raymond James’ Michael Glen lowered his Martinrea International Inc. (MRE-T) target to $14 from $17.50 with an “outperform” rating. The average is $15.33.
“We had an opportunity to host management meetings with Fred Di Tosto, President, Peter Cirulis, CFO, and Neil Forster, Director of IR in Toronto earlier this week. We will frame the discussions as follows: while the near-term industry dynamic points to a challenging 4Q and 1H25 for the industry, we heard some very positive things in our meetings which show that Martinrea will look very different when auto production (emphasize North American production) eventually turns,” Mr. Glen said.
* Previewing quarterly results for North American fast food companies, Stifel’s Chris O’Cull cut his Restaurant Brands International Inc. (QSR-N, QSR-T) to US$68 from US$72 with a “hold” rating. The average is US$81.19.
“Our Hold rating reflects our view that the relative scale and sophistication of RBI’s franchise system will result in greater net unit growth resiliency than most peers,” he said. “However, turnaround efforts at Burger King U.S. and Tim Hortons remain in the early stages, and we are concerned the pace of improvement will be hampered by the inflationary and competitive pressures faced by franchisees in both brands. In all, we believe the current valuation reasonably balances the risk/reward.”
On the industry, he said: “We updated our estimates for several restaurant companies based on mobile location data and recent channel checks. In addition, we reviewed several companies that are expected to present at the ICR Conference next week. Among ICR[conference] attendees, we believe Dutch Bros is well-positioned to deliver solid 4Q results. We anticipate the step-up in paid advertising investments and an active promotional calendar yielded comp results at least in line with the Street mean (1.5 per cent). Outside the restaurant industry, we believe investors should closely monitor 4Q results from Planet Fitness for a read-through on the potential strength of the critical 1Q sign-up period, specifically whether new join trends have improved. Although Brinker is not presenting at ICR, we wanted to highlight Chili’s as a notable standout among restaurant companies, with visitation accelerating meaningfully despite lapping initial advertising investments last year; we are projecting F2Q25 comps in the high-teens rang.”
* BMO’s Tamy Chen cut her Saputo Inc. (SAP-T) target to $27 from $30 with a “market perform” rating. The average is $34.20.
“We are surprised by the stock’s weakness since December from $27 to $24 because there are positive greenshoots in most segments,” she said..” The U.S. is seeing Global Strategic Plan (GSP) benefits. Australia has reset to a lower milk price. Europe is improving after clearing high-cost inventory. Perhaps the recent abrupt departure of newly appointed COO Frank Guido was a contributor to the stock move. Headwinds in Argentina have also worsened sequentially. But the stock now trades at 7 times our F2026E EBITDA and 6.5 times our F2027E EBITDA, a new low vs. historical. This seems too punitive so there may be some potential near-term upside to the high-$20s.”
“Our thesis is we want to assess how successful the company’s further push into branded retail sales could be (see our downgrade note here). Our view is that, without this, the company’s earnings power would still be quite impacted by commodity volatility and thus, difficult to see valuation re-rating.”