A survey of North American equities heading in both directions
On the rise
Nova Scotia-based Empire Co. Ltd. (EMP.A-T) closed 5.2 per cent higher after saying it earned a second-quarter profit of $173.4-million as its sales edged higher.
The parent company of grocery retailer Sobeys says the profit amounted to 73 cents per diluted share for the 13-week period ended Nov. 2 compared with a profit of $181.1-million or 72 cents per diluted share a year ago when it had more shares outstanding.
Sales for the quarter totalled $7.78-billion, up from $7.75-billion a year earlier.
The increase came as same-store sales rose 1.1 per cent. Same-store sales growth, excluding fuel sales, amounted to 1.8 per cent.
On an adjusted basis, Empire says it earned 73 cents per diluted share in its latest quarter, up from an adjusted profit of 71 cents per diluted share in the same quarter last year.
The average analyst estimate had been for an adjusted profit of 66 cents per share, according to data provided by LSEG Data & Analytics.
Bausch + Lomb (BLCO-T) rose 3.5 per cent after confirming it is exploring a potential sale among other options in a move that would help Canadian parent Bausch Health (BHC-T) exit the eye-care company.
Bausch + Lomb also said its statement was in response to a request from the Canadian Investment Regulatory Organization (CIRO) after a series of media reports on its likely sale triggered volatility in its shares.
The Financial Times reported on Oct. 14 that private equity firms TPG and Blackstone were working on a joint bid to take the company private for up to US$11.5-billion, including debt.
A month prior, the FT had reported that the company had hired an investment bank to explore a sale, sending its shares surging more than 37 per cent until the newspaper’s report on Blackstone’s cooling interest earlier this week led to a sharp fall in its stock price.
A sale could end a long process by parent Bausch Health to offload its stake in the eyecare company.
In 2022, Bausch Health separated the business into another publicly listed company but retained a majority stake.
Bausch + Lomb, which is one of the world’s largest contact lens suppliers, is helmed by noted dealmaker Brent Saunders.
He was previously the CEO of Allergan before it was sold to AbbVie for US$63-billion.
The company also makes surgical devices, prescription drugs and generic eye products.
Montreal-based travel company Transat A.T. Inc. (TRZ-T) was up 4.6 per cent after reporting a fourth-quarter profit of $41.2-million, up from $3.2-million in the same quarter last year.
The company behind Air Transat says the profit amounted to $1.05 per diluted share for the quarter ended Oct. 31, up from a profit of eight cents per diluted share a year earlier.
On an adjusted basis, Transat says it earned 67 cents per share in its latest quarter compared with an adjusted profit of 41 cents per share in the same quarter last year.
Revenue for the quarter totalled $788.8-million, up from $764.5-million a year ago.
The increase came as traffic expressed in revenue-passenger-miles rose 2.7 per cent compared with 2023 and the company recorded $33.6-million in compensation from Pratt & Whitney related to grounded aircraft over the past two years.
Transat’s capacity was up 4.0 per cent compared with a year earlier.
Warner Bros Discovery (WBD-Q) said on Thursday it would separate its declining cable TV business from the growing streaming and studio operations, laying the groundwork for a potential sale or spinoff of its traditional TV business as cord-cutting picks pace.
Shares soared over 15 per cent after the company said the new corporate structure will “increase optionality to pursue further value creation opportunities for both divisions.” It expects to complete the rollout of the new structure by mid-2025.
Media companies are considering options for their cable TV businesses as a largescale shift by consumers toward streaming has slammed growth in traditional TV, which has long been the industry’s cash cow.
Comcast last month unveiled plans to split most of its NBCUniversal cable networks into a new public company as it looks to unchain its faster-growing studio and theme parks business from the declining traditional TV.
Comedy Central and Nickelodeon owner Paramount Global (PARA-Q) had also earlier this year also agreed to merge with streaming-era upstart Skydance Media.
Shares of ServiceTitan (TTAN-Q) rose about 42 per cent in their U.S. market debut on Thursday, giving the cloud-based software company a valuation of nearly US$9-billion.
The company’s shares opened at US$101 apiece in their Nasdaq debut, compared with the initial public offering (IPO) price of US$71.
The valuation is a step down for the Glendale, California-based company, which was valued at US$9.5-billion after a Thoma Bravo-led funding round in 2021.
Strong equity markets, the prospect of lower interest rates and expectations of a soft landing for the economy have bolstered investor confidence in the U.S. IPO market this year.
“The two things that matter the most (for our IPO) are the strength and durability of the business and the favorable market conditions,” ServiceTitan CEO and Co-founder Ara Mahdessian said.
“So we’re happy that both these things happened, and this is the right time for ServiceTitan to be a public company.”
ServiceTitan joins a handful of venture capital-backed firms that have gone public this year, including social media platform Reddit and cybersecurity software firm Rubrik.
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On the decline
Shares of Suncor Energy (SU-T) slid 2.1 per cent on Thursday after it projected higher oil and gas production and lower spending in 2025, as it aims to boost output from its oil sands assets while keeping a tight lid on costs.
The second-largest Canadian oil producer expects production to be between 810,000 and 840,000 barrels per day (bpd) next year, up from its 2024 estimate of 770,000 to 810,000 bpd.
Suncor’s operations has steadily improved since former Exxon Mobil executive Rich Kruger took over as CEO in April 2023.
Canadian oil producers have been encouraged to lift their production targets as export capacity has increased since the startup of the Trans Mountain Pipeline expansion project earlier this year.
Suncor also forecast a slight rise in refinery throughput volumes between 435,000 and 450,000 in 2025. It expects refining utilization to be between 93 per cent and 97 per cent.
The U.S. Energy Information Administration predicts increased fuel demand in the United States, Canada’s largest crude market, due to an anticipated uptick in industrial activity.
Still, U.S. consumption of Canadian oil could take a hit if President-elect Donald Trump imposes a 25-per-cent import tariff. Suncor expects capital expenditure for 2025 to be between $6.1-billion and $6.3-billion, compared to the current year’s $6.3-billion to $6.5-billion forecast.
Capital spending next year will remain focused on the development of Mildred Lake West Mine Extension in Alberta and the offshore West White Rose project among other areas, the company said.
Cenovus Energy (CVE-T) declined 1 per cent as it forecast higher oil and gas production for 2025, expecting to benefit from new projects coming online.
The company forecast upstream production between 805,000 and 845,000 barrels of oil equivalent per day (boepd) for 2025, with the midpoint higher than analysts’ estimates of 820,140 boepd, according to data compiled by LSEG.
The company expects 770,000 boepd to 810,000 boepd for this year.
With growing power demand from operations including data centers and manufacturing, the U.S. Energy Information Administration (EIA) has projected power demand will rise in 2025 in the U.S., potentially helping gas producers such as Cenovus.
“Cenovus will deliver important milestones on our major growth projects in 2025, including achieving first oil from Narrows Lake, installation of the West White Rose offshore facilities and commencement of drilling, and preparations for first steam at the Foster Creek optimization project,” said CEO Jon McKenzie.
Narrows Lake is an oil sands site in Alberta expected to have production of 130,000 barrels per day (bpd). The company is also investing in the Foster Creek optimization project to expand its oil sands production.
The Canadian firm forecast downstream throughput for 2025 between 650,000 and 685,000 barrels per day (bpd), compared with 630,000 bpd to 670,000 bpd expected this year, with refinery utilization of 90% to 95%.
The company expects oil sands production to be lower in the second quarter of 2025, reflecting turnaround and maintenance activity, and sees it ramping up in the second half of 2025.
It expects expenses of between $4.6-billion and $5-billion for 2025, compared with the estimated spending of $4.5-billion to $5-billion in 2024.
Gold miner Agnico Eagle Mines Ltd. (AEM-T) decreased 2 per cent in response to signing an agreement to buy O3 Mining Inc. (OIII-X) in a friendly deal valued at about $204-million.
O3 Mining’s main asset is its Marban Alliance property which is located next to Agnico Eagle’s Canadian Malartic operations in the Abitibi region of Quebec.
Under the deal, Agnico Eagle has offered to pay $1.67 per O3 Mining share in cash.
O3 Mining shares closed at $1.06 on the TSX Venture Exchange on Wednesday.
The offer has been unanimously recommended by the O3 Mining board and special committee and supported by shareholders representing 22 per cent of the company’s outstanding shares.
The plan requires, among other conditions, at least two-thirds of O3 Mining’s shares to be tendered to the offer, excluding the shares already owned or controlled by Agnico Eagle.
Imperial Oil (IMO-T) dropped 6.7 per cent despite forecasting higher crude production in 2025, as the Canadian energy major expects to ramp up output from existing oil sands assets.
The company, majority-owned by Exxon Mobil, expects higher production from its Kearl and Cold Lake oil sands assets in Alberta.
Imperial estimated 2025 production in the range of 433,000 to 456,000 barrels of oil equivalent per day, compared to 420,000 to 442,000 boped it forecast for 2024.
Peers Cenovus Energy and Suncor Energy also forecast higher production next year, as Canadian oil producers bank on higher exports to Asia and the U.S. West Coast through the Trans Mountain Pipeline expansion project.
Imperial projected downstream throughput in the range of 405,000 and 415,000 barrels per day with capacity utilization between 94% and 96%.
The Calgary-based company said it expected maintenance turnarounds in all of its refineries with lower anticipated impact to throughput and costs compared to 2024.
The company predicted capital spending of $1.9-$2.1-billion for next year, higher than the $1.8-$1.9-billion estimated for 2024.
The spending focus would be on increasing bitumen recovery and mine progression work at Kearl, as well as completion of the Leming redevelopment project and high-value drilling opportunities at Cold Lake.
The Strathcona renewable diesel facility near Edmonton is expected to come online next year, the company said.
Shares of Adobe (ADBE-Q) fell 13.7 per cent on Thursday after the Photoshop maker’s downbeat full-year revenue forecast led to concerns that returns from AI investments into its software applications might take longer than expected.
“While the company remains on track with its GenAI product roadmap, we think the lack of ... explicit monetization metrics has made it harder for investors to get comfortable with the progress,” RBC analyst Matthew Swanson said.
The San Jose, California-based company on Wednesday forecast fiscal 2025 annual revenue between US$23.30-billion and US$23.55-billion, compared with the average analyst estimate of US$23.78-billion, according to data compiled by LSEG.
“Given another selloff, we observe a clear disconnect between management’s excitement and the internal signs of success that they see relative to what investors are seeing,” according to Morningstar analysts.
Having recently released AI-related software tools, Adobe is making significant investments in artificial intelligence-driven image and video generation technologies in response to growing competition from well-capitalized startups such as Stability AI and Midjourney.
Adobe’s advances in video-generation technology put it head-to-head with ChatGPT-maker OpenAI’s Sora.
Although Adobe projected strong growth for the second half of the year in June, at least seven brokerages cut price targets on the company’s shares following the revenue forecast.
“With Adobe underperforming the S&P for over 5 years now, getting back into a more consistent cadence of beat/raise is basically a necessity to rekindle long-term investor interest,” Evercore ISI said, adding that the lack of clarity around generative AI monetization is also working against the stock.
Adobe’s stock has fallen about 8 per cent so far this year, compared with the S&P 500 index’s 27.6-per-cent gain.
The company’s 12-month forward price-to-earnings ratio stands at 26.46, compared with Autodesk’s (ADSK-Q) 33.63.
With files from staff and wires