Inside the Market’s roundup of some of today’s key analyst actions
TD Cowen analyst Brian Morrison thinks Aritzia Inc. (ATZ-T) is performing well in an “uncertain” economic environment.
“We believe Aritzia continues to achieve outsized relative sales growth due to its compelling product offering, improved inventory position, and expansion initiatives. In recent weeks, this appears to be offset by the mounting concern of a weakening economic outlook and in turn consumer,” he said. “We view the recent share decline as compelling based upon its mid-term growth runway and financial position.”
Ahead of its April 30 financial release, Mr. Morrison is projecting earnings per share for the retailer’s fourth quarter of its 2025 fiscal year of 71 cents, a penny ahead of the Street’s expectation and “a notable improvement” from 34 cents during the same period a year ago.
“In the context of the current market environment, meeting Q4/F25 consensus is a must, albeit in doing so, investor focus will be squarely upon Aritzia’s outlook,” he said. “We forecast strong year-over-year sales growth (approximately 23 per cent) as the product offering resonates with consumers. This should benefit the top line through square footage growth (new stores/flagship openings), positive brick/mortar SSSG [same-store sales growth], and ongoing eCommerce penetration. The continuation of gross margin drivers illustrated year-to-date and scale leading to SG&A leverage despite heightened digital initiatives, are the key drivers of our forecast adjusted EBITDA margin expansion.”
“The release should include the initiation of its F2026 key guidance metrics, that we believe should illustrate an attractive growth outlook. That stated, the recent tariff approach by the U.S. administration has raised concerns upon the North American economic outlook, that admittedly could weigh upon future consumer discretionary spend. We have modestly lowered our F2026 forecast as a result but continue to highlight the strength of Aritzia’s financial position ($200-million net cash), and the growth runway for expansion into the U.S. market.”
Despite that forecast reduction, Mr. Morrison thinks the Vancouver-based company’s exposure to tariffs “appears manageable,” noting Aritzia pro-actively reduced its exposure to China sourcing in recent years.
“Reviewing the potential impact illustrates in our view the magnitude of a potential consumer slowdown being factored into the share price,” he added.
Maintaining his “buy” rating for Aritzia shares, he lowered his target by $1 to $74. The current average target on the Street is $75.60.
“We remain positive on Aritzia despite near-term economic risks/uncertainty,” he said. “Its offering/brand is resonating, its expansion opportunity into the U.S. remains early days, its eCommerce initiatives appear to be gaining traction, and its balance sheet/FCF outlook provide support in the event of lower than anticipated North American economic growth. We view the risk/reward as compelling with the decline in our view implying limited EPS growth in F2026 despite 20-per-cent square footage growth, and the share price down 30 per cent the past month erasing all gains from earlier in the year.”
=====
Acumen Capital analyst Trevor Reynolds sees upside for AutoCanada Inc. (ACQ-T) moving forward, “assuming management can deliver on their projected savings and the macro environment stabilize.”
Accordingly, he raised his rating for the Edmonton-based multi-location automobile dealership group to “speculative buy” from “hold” previously.
“Results for the quarter were generally ahead of expectations driven by improved demand as a result of OEM incentives and reduced lending rates,” he said. “With the quarter ACQ announced a plan to sell the U.S. division as part of the strategic review which is now complete. Given the highly uncertain macro environment ACQ is focused on what they can control which is the previously stated plan to significantly reduce costs and leverage.”
Mr. Reynolds cautioned that he expects results to be “challenged” in the near term given the difficult macro conditions, noting new vehicle sales thus far in 2025 are down 3 per cent year-over-year while the used market “remains soft.”
“That said, management is clearly making the tough but necessary decisions as evidenced by the sale of non-core assets in Canada, closing of the RightRide division, and movement of the U.S. assets to discontinued operations,” he said. “Overall, our focus over the coming year will be on management’s ability to execute on an aggressive cost reduction plan. Assuming better clarity on the macro-outlook and delivery on the targeted operating cost reductions ACQ will be set up well through the back half of 2025 and into 2026. Given the movement of the U.S. division to discontinuing operations and restatement of result we highlight 2023 and 2024 actual results from continuing operations along with our new estimates for Q1/25, and FY2025 and FY2026.”
He raised his target for AutoCanada shares to $22.50 from $20. The average is $20.26.
Elsewhere, Canaccord Genuity’s Luke Hannan upgraded his rating to “buy” from “hold” and increased his target to $22 from $17.
“We are raising our rating ... following another sizable cost control-driven beat on EBITDA and greater visibility on near-term cost savings, which we believe the company can achieve even amidst an uncertain macro backdrop,” he said.
“The risk in our upgrade here clearly is with (3). We are potentially on the eve of tariffs being instituted between the U.S. and Canada/Mexico, which could derail the best-laid plans for any consumer-oriented business, much less a cyclical one dependent on a highly integrated supply chain across multiple tariff-impacted countries. Our view is, given that AutoCanada’s improvement efforts are “self-help” oriented, more centred on cost-cutting as opposed to market/consumer-dependent initiatives, there is greater visibility.”
=====
In a research report on North American Construction Group Ltd.’s (NOA-T) titled This is no longer an oil sands beta play, National Bank Financial’s Maxim Sytchev declared “we are buyers at these levels.”
Shares of the Acheson, Alta.-based heavy civil construction and mining contractor provider slid 4.8 per cent on Thursday in response to a fourth-quarter earnings report that the equity analyst thought “should assuage investor fears.”
“The beginning of the year has not been kind to cyclical small caps, including NOA, pushing the stock down 20 per cent year-to-date (vs. up 1 per cent for the TSX); [Thursday] morning’s initial reaction is also somewhat bewildering,” he said. “While we of course don’t want to discount valid concerns but when 60 per cent of EBIT coming from Australia, whether CAD utilization is 55 per cent or 60 per cent, it literally no longer moves the needle. NOA’s Canadian business, especially in the North, might also benefit from realization that the country needs to develop resources, especially in light of geopolitical pressures. Nuna would stand to benefit as a result. With a still material re-rate opportunity ahead of us we continue to view the shares as very attractive at this level for risk-tolerant, value-minded investors, backstopped by a 3.2 times EV/2026E EBITDA multiple.”
After the bell on Wednesday, the company reported revenue of $306-million, down 6 per cent year-over-year and below Mr. Sytchev’s $320-million estimate and the Street’s expectation of $313-million. Adjusted EBITDA of $104-million met the consensus while falling $2-million short of the analyst projection, while adjusted earnings per share of $1 was a penny below the consensus and 4 cents under the forecast of Mr. Sytchev, who noted “margin strength persists despite Canadian demand drag.”
The analyst now sees the company as “an Australian ‘story’” with MacKellar Group, which acquired in 2023, continuing to “stand out.”
“MacKellar momentum has once again surprised to the upside, with revenues now 30 per cent above their run rate at the time of acquisition less than 2 years ago,” said Mr. Sytchev. “The bidding environment in the region remains strong, and project economics for contractors are structurally more favourable compared to the Canadian market. Management continues to pursue diversification efforts in terms of resource exposure, and expects infrastructure rising to about a quarter of the overall business over the next few years. Thus far, there have been no tariff-induced headwinds and no major asset purchases from the U.S. are expected in the next 12 months.
“Oil sands business should be stable in 2025. With Canadian oil sands revenues down about 30 per cent year-over-year in 2024, management expects 2025 growth to be roughly flat. While there is strong demand for large trucks, smaller equipment is underutilized and demand is softer for civil works jobs. While smaller equipment can be relocated to Australia in the same manner as the 25 trucks late last year, utilization rates / shipping costs would come under pressure during the transition period. With the oil sands business now being a much smaller part of the business vs. only 2 years ago, seasonality has moderated significantly; management expects 20 per cent of EBITDA/EPS for 2025E to come from Q1/25 with 55 per cent in H2/25 (with Q3/25 being the most significant contributor). With Fargo now over 60 per cent complete, 2025 revenues are expected to retreat about 10 per cent in 2025E closer to the $135-million-$140-million mark as management continues to work on backfilling the work.”
Reaffirming his “outperform” recommendation for its shares, Mr. Sytchev lowered his target to $41 from $44 “as dilution from converts outweighs the prior debt-like treatment” in his net asset value assumption. The average on the Street is $41.14.
Elsewhere, Ventum Capital Markets’ Devin Schilling reduced his target to $42 from $45 with a “buy” rating.
“Q4/24 results were generally in line with our estimates and consensus while the outlook for 2025 remains largely unchanged,” said Mr. Schilling. “The quarter was driven by continued strength in Australia while the Canadian market remained weak but did show signs of improvement. We continue to view the current valuation as extremely attractive, with NOA trading at 3.3 times FY25 estimated EV/EBITDA (or a 10-per-cent FY25 estimated FCF/EV yield), and recommend investors become more aggressive on the name given our expectations for a much stronger 2025.”
=====
RBC Dominion Securities analyst Paul Treiber predicts investor sentiment toward Canadian technology companies is “likely to remain restrained pending better visibility to the overall macroeconomic environment,” however he thinks potential headwinds from tariff uncertainty are already reflected in the valuations of most stocks in his coverage universe.
“The S&P/TSX Info-tech is down 3 per cent year-to-date, while the average stock in our coverage has declined 9 per cent year-to-date, given uncertainty regarding tariffs and the broader macroeconomic environment,” he said. “Reduced investor sentiment is despite the majority of our coverage reporting healthy calendar Q4 results (average stock in our coverage up 3 per cent the day after reporting Q4). Of the 12 companies in our coverage that reported calendar Q4 results, two-thirds exceeded revenue expectations, while only one-third missed revenue expectations. The performance of our coverage universe is slightly better than that of the 100 largest tech stocks in Canada (the ‘Canadian tech top 100′), where only 53 per cent exceeded revenue expectations and 47 per cent missed last quarter.”
“Stocks in our coverage universe rose 2.6 per cent on average after reporting calendar Q4 earnings, as Q4 results were slightly ahead of expectations (revenue 0.5 per cent above consensus on average, better than the 0.2 per cent miss Q3). The majority of our coverage that exceeded expectations (1.3-per-cent average revenue beat) were up 4.8 per cent on average after the quarter, while the stocks that missed (1.3-per-cent average revenue shortfall) fell 1.9 per cent after the quarter. CVO (up 26 per cent 1-day return), CLS (up 14 per cent) and TIXT (up 12 per cent) were the top performing stocks in our coverage after Q4 results. Stocks that experienced the largest pullbacks after Q4 were LSPD (down 13 per cent), CGY (down 10 per cent), and OTEX (down 6 per cent). The decline in these stocks stems from concerns regarding future growth.”
In a report released Friday titled Canadian Technology: Q4/2024 Icons & Outliers, Mr. Treiber noted both first-quarter 2025 and full-year financial expectations for the sector fell slightly given the macroeconomic uncertainty. However, it should not be a significant cause for concern.
“Even though Q4 was better than expected, consensus revenue estimates across our coverage fell on average 2 per cent for Q1/CY25 and 1 per cent for CY25,” he said. “The decline in estimates is similar to the last four quarters. The reduction reflects the continued pushout of expectations for a potential improvement in enterprise discretionary spending. While tariffs are unlikely to have a material direct impact on Canadian tech stocks, broader macroeconomic uncertainty may lead some organizations to defer pending IT projects and reduce discretionary IT spending. New tariffs may also weigh on consumer spending, which is a potential headwind to the stocks in our coverage with payments revenue (e.g. SHOP, LSPD).”
While the average stock in his coverage is down 9 per cent year-to-date, the analyst thinks Canadian tech stocks “will stabilize and outperform through the remainder of the year”
He named three companies possessing “the most compelling risk-reward profiles” for the months ahead. They are:
* Shopify Inc. (SHOP-N, SHOP-T) with an “outperform” rating and US$145 target. The average on the Street is US$132.95.
Analyst: “Shares of Shopify, down 5 per cent year-to-date, appear attractive, as we believe the company will see continued solid growth as a result of market share gains, traction with large enterprises, and expansion into international markets, even despite the possibility that tariffs are a headwind to consumer spending.
* Constellation Software Inc. (CSU-T) with an “outperform” rating and $5,700 target. Average: $5,322.
Analyst: “We see Constellation (stock up 5 per cent year-to-date) as one of the most consistent stocks in our coverage; for 2025, we believe capital deployed on acquisitions is likely to exceed 2024 on a rebound in large acquisitions.”
* Kinaxis Inc. (KXS-T) with an “outperform” rating and $210 target. Average: $196.88.
Analyst: “For Kinaxis (shares down 8 per cent year-to-date), we believe the announcement of a new high profile U.S. SaaS CEO is a likely catalyst for the stock. Additionally, we believe bookings may improve through 2025.”
Mr. Treiber added: “Regarding valuations, the average stock in our coverage universe continues to trade well below peers (21-per-cent discount vs. historical average of 26 per cent).
=====
In other analyst actions:
* BofA Securities’ David Barden downgraded Telus Corp. (T-T) to “neutral” from “buy” and cut his target to $22 from $24, citing several factors, including leverage concerns. The average is $22.73.
* Canaccord Genuity’s Yuri Lynk upgraded Enterprise Group Inc. (E-T) to “buy” from “hold” with a $2.10 target, down from $2.40. Others making target changes include: Raymond James’ Luke Konschuh to $3 from $3.75 with an “outperform” recommendation and Acumen Capital’s Nick Corcoran to $2.40 from $2.80 with a “buy” rating. The average is $2.71.
“We are upgrading Enterprise Group .... following Q4/2024 results that missed our forecasts,” said Mr. Lynk. “Since launching coverage on Enterprise on February 19, 2025, its shares have declined 47% as risk assets have underperformed since then on tariffinduced macroeconomic worries. Enterprise’s Q4/2024 print contributed to half of this decline with the top to bottom line missing consensus estimates. However, management noted a quarter-to-date recovery in demand and customer sentiment, with quote requests pointing to a sustained recovery.
“Our longer-term positive view on Enterprise remains unchanged. Therefore, we now see a more attractive reward-to-risk proposition in Enterprise shares. The company trades at 6.6 times EV/EBITDA (2025E), down from 10.5 times when we launched. By way of comparison, the Energy Services group trades at 3.0 times and Equipment Rental companies trade at 6.9 times Given its attractive long-term growth profile, CO2-reducing natural gas generators, full-service offering, and solid balance sheet featuring $10 million in net cash, we are comfortable upgrading our recommendation.”
* Canaccord Genuity’s Tania Armstrong-Whitworth lowered Knight Therapeutics Inc. (GUD-T) to “hold” from “buy” with a $6.50 target, down from $7.25. The average is $7.51.
“Continuing to value shares in line with peers has us lowering our target multiple to 7.0 times EV/EBITDA from 7.5 times previously,” she said. “This is based on the recent broader market sell-off and ongoing tariff risk. We value GUD’s net cash and loans at 1.0 times and its equity and fund investments at 1.6 times. We’re also reducing our equity value by half of the Paladin upfront consideration ($60.0-million). We are not including the full $120.0-million purchase price since our 2025 adjusted EBITDA estimate (on which we value the stock) only includes a half-year contribution from Paladin. Together, this results in our price target declining to $6.50/sh, from $7.25/sh previously. Given the recent jump in share price post-Paladin deal announcement, and resultant minimal upside from current levels, we are downgrading our recommendation to HOLD from BUY.”
* Raymond James’ Steven Li reduced his Baylin Technologies Inc. (BYL-T) target by 10 cents to 40 cents with a “market perform” rating. The average on the Street is 50 cents.
“Positive 4Q earnings report with upside but F2025 outlook is lower on tariffs (especially Satcom),” he said.
* Mr. Li also cut his Mogo Inc. (MOGO-T) target to $3 from $4, which is the current average, with an “outperform” rating.
“In-line 4Q, but F2025 outlook lower on a number of revenue headwinds (rate caps, exiting business, more caution on lending),” he said.
* Stifel’s Daryl Young cut his Boyd Group Services Inc. (BYD-T) target to $270 from $285 with a “buy” rating. The average is $271.23.
“Q4/24 results were solid with adj. EBITDA of $83.4-million 2 per cent above consensus of $81.9-million,” he said. “However, this was overshadowed by the weaker-than-expected Q1/25 outlook as declines in industry-wide insurance claims volumes reaccelerated across January/February, limiting Boyd’s ability to drive positive SSSG [same-store sales growth] and related margin improvement from operating leverage. The claims declines come despite upside from harsh winter weather as the consumer/economic sensitivity is proving more pronounced than we anticipated. Despite these headwinds, management continued to strike a positive tone as they are seeing early success from Project 360 cost savings initiatives which should yield margin improvement across H2/25. Moreover, Boyd is driving sequential improvement in SSS in Q1/25 (albeit still negative) on market share gains. In our view, Boyd is doing the right things to upgrade its platform for the eventual industry turn. However, continued ambiguity around the depth/duration/ drivers of the industry claims declines is testing investor patience.”
* Ahead of its March 26 earnings release, Canaccord Genuity’s Luke Hannan dropped his BRP Inc. (DOO-T) target to $60 from $80 with a “hold” rating, seeing it “navigating through rough terrain” given a “softening” consumer backdrop. The average is $81.22.
“In our view, BRP shares are likely to remain range-bound over the near term until investors gain more confidence that operating conditions are poised to improve, which we would expect could happen in the latter half of F2026 at the earliest,” he said.
* Raymond James’ Craig Stanley initiated coverage of Endeavour Silver Corp. (EDR-T) with an “outperform” rating and $7.50 target. The average on the Street is $8.35.
“EDR is a Mexican-focused silver producer. The company owns two operating mines, Guanaceví in Durango and Bolanitos in Guanajuato, as well as the Terronera Project in Jalisco where full commissioning is scheduled for 2Q25, and the Pitarrilla Project in Durango,” he said. “We believe that EDR’s valuation is potentially poised for a market re-rating as the large, low-cost Terronera Project comes online.”
* National Bank’s Mohamed Sidibé trimmed his Lithium Royalty Corp. (LIRC-T) target to $7 from $7.50 with an “outperform” rating following adjustments to his forecast in response to its fourth-quarter 2024 results. The average is $8.49.
“The results were fairly in line with our estimates, however we have revised our estimates lower at Horse Creek on both production and silica quartz pricing in 2026 and beyond following clarity gained post Q4/24 results,” he said. “We have additionally pushed back our expected restart of production at Finniss from H2/2026 to H1/27 to reflect conservatism. Despite the lower estimate revisions, we forecast a year-over-year growth in deliveries of 10 per cent (27 per cent prior) and 125 per cent (195 per cent prior) in 2025 and 2026, respectively. We continue to expect 2026 to be the first year of positive CF generation. Our focus near-term remains on the start of production at Tres Quebradas, advancement of Grota do Cirilo Phase 2 expansion and any potential future accretive acquisitions given the strong liquidity post closing of the partial sale of the 3Q royalty.”
* Seeing an “attractive combination of value, resilience and yield,” Scotia’s Phil Hardie raised his Power Corp. of Canada (POW-T) target to $62 from $56, exceeding the $55.14 average, with a “sector outperform” rating.
“We think the fourth quarter results provide another data point that demonstrates the growing operational and earnings momentum across the Power Group,” he sai. “The company also supports our view that return of capital will remain a theme, with 9-per-cent dividend increase and continued share buyback activity. NAV/sh growth was solid in 2024, rising 13 per cent, and has continued, having risen an additional 8 per cent year-to-date.
“Despite the recent rally in share price, we believe that Power Corp.’s NAV discount remains wide, and the combination of its discounted valuation and attractive dividend yield offers an attractive risk–reward and entry point for investors.”
* Ahead of the premarket release of its fourth-quarter 2024 results before the bell on Friday, RBC Dominion Securities analyst Ryland Conrad raised his target for Premium Brands Holdings Corp. (PBH-T) by $1 to $97 with an “outperform” rating, believing “a low bar has been set” as investor focus shifts to the current fiscal year. The average target on the Street is $102.89.
“Despite the more challenging operating environment with value-seeking consumers continuing to trade down to discount banners where Premium Brands is underindexed, in addition to ongoing headwinds for a major foodservice customer and tariff uncertainty, we believe management continues to execute on U.S. growth initiatives including significant capacity expansions, new customer wins and a healthy sales pipeline,” he said. “While we remain on the sidelines given the more challenging operating/macro backdrop, we continue to see value in the shares reflecting the potential for organic revenue growth to accelerate alongside EBITDA margin expansion in 2025/2026 with any macro improvement being an incremental tailwind.”