A survey of North American equities heading in both directions
On the rise
Enbridge (ENB-T) on Tuesday forecast higher core profit for 2025 as the Calgary-based pipeline operator expects strong oil and gas demand to lift volumes, sending its shares up 0.4 per cent.
The company forecast adjusted core earnings between $19.4-billion and $20-billion next year, higher than its 2024 expectations.
U.S. natural gas producers said in November they would increase output in 2025 after a series of production cuts in the current year, as increased demand from LNG export plants is expected to drive up prices.
“Global oil consumption has rebounded to all-time highs and increasing natural gas demand is being driven by LNG growth, coal-to-gas switching and the rapid increase in electric power demand, stemming from new data center developments,” CEO Greg Ebel said, adding that Enbridge’s portfolio was well suited to take advantage of the increased energy demand.
Recent U.S. gas utility acquisitions and roughly US$5-billion of secured projects expected to come online in 2024 also contributed to the upbeat forecast, the company said.
The pipeline operator acquired three utilities from U.S.-based Dominion Energy for US$14 billion-last year, expanding its gas distribution business.
Power supply in the United States is expected to increase 3 per cent this year over 2023 to meet rising demand, with solar and natural gas-fired power leading the bulk of new electricity generation.
Enbridge expects to deploy nearly $7-billion of capital in 2025, exclusive of maintenance capital. It also raised its 2025 dividend by 3 per cent.
Bombardier (BBD-B-T) was up 3.7 per cent in response to an agreement with Honeywell (HON-Q) for aviation-related technology for its aircraft.
The deal will provide Honeywell’s avionics, propulsion and satellite communication technologies.
Honeywell and Bombardier also said that all pending litigation between the companies has been resolved.
Bombardier had previously alleged Honeywell of selling propulsion systems to its rivals on more favorable terms, despite guarantees that the Canadian planemaker would get the best price.
Honeywell said it expects the agreement to have a near-term impact on its financials, given the investments for research and development. The company added that it estimates revenue potential of up to US$17-billion over the duration of the agreement.
Honeywell lowered its fourth-quarter sales forecast to between US$9.8-billion and US$10.0-billion, from its prior forecast range of US$10.2-billion to $10.4 billion.
It also cut its adjusted earnings per share outlook to between US$2.26 and US$2.36, compare with its previous forecast range of US$2.73 to US$2.83.
AT&T (T-N) expects its free cash flow to be more than US$18-billion in 2027, the company said on Tuesday as it detailed a three-year vision for the business to expand its 5G and fiber services across the United States.
Shares of the company rose 4.7 per cent in Tuesday trading.
The wireless carrier aims to double its fiber internet availability and enhance its 5G network, offering customers bundled discounts on high-speed fiber data and wireless phone services.
The Dallas, Texas-based company’s efforts align with industry trends toward high-speed internet and have already yielded significant customer gains.
The company expects to reach more than 50 million locations with fiber by 2029. It earlier reported 28.3 million fiber passings, or the number of potential customer locations a fiber network passes by.
The company’s unlimited plans, featuring perks like increased hotspot data, have driven higher-than-expected wireless subscriber growth in the third quarter.
AT&T plans to return more than US$40-billion to shareholders over the next three years through dividends and share repurchases. Annual capital investment is expected to remain around US$22-billion in the period.
The company raised the lower end of its 2024 adjusted earnings per share forecast to between $2.20 and US$2.25, compared with analysts’ estimates of US$2.21 per share, according to data compiled by LSEG.
It outlined the growth expectations for 2025 to 2027, excluding its 70-per-cent stake in DirecTV, which is being sold to TPG for US$7.6-billion. The deal is expected to close by mid-2025.
In September, rival T-Mobile (TMUS-Q) said it expects adjusted free cash flow between US$18-billion and US$19-billion in 2027.
From 2025 to 2027, AT&T forecast annual service revenue growth in the low-single-digit range.
On the decline
Shares of Bank of Nova Scotia (BNS-T) declined 3.4 per cent after it reported higher fourth-quarter profit but missed analysts’ estimates as the lender boosted revenue and set aside fewer provisions for loans that could default.
Scotiabank earned $1.69-billion, or $1.22 per share, in the three months that ended Oct. 31. That compared with $1.35-billion, or $0.99 per share, in the same quarter last year.
Adjusted to exclude certain items, including impairment charges related to Scotiabank’s investment in China-based Bank of X’ian Co Ltd. and a higher-than-expected tax rate, the bank said it earned $1.57 per share. That fell below the $1.60 per share analysts expected, according to data from the London Stock Exchange Group.
Scotiabank is one year into its new strategic plan aimed at reallocating more money to its North American businesses, where it believes it has bigger opportunities for growth than in its Latin American operations, and growing its deposit base. In August, the lender took a 14.9-per-cent ownership stake in Cleveland-based KeyCorp.
“2024 was a foundational year for Scotiabank as we launched and made early progress against our new strategy. The Bank delivered solid revenue growth and positive full year operating leverage, while redeploying capital to our priority markets across the North American corridor,” chief executive officer Scott Thomson said in a statement.
“While I am encouraged by our strategic progress to date, there is significant work ahead as we focus on client primacy initiatives to drive enhanced profitability across our businesses. I am confident that we are on track to achieve the targets we laid out at our Investor Day for 2025.”
The bank kept its quarterly dividend unchanged at $1.06 per share.
Scotiabank is the first major Canadian bank to report earnings for the fiscal fourth quarter. Royal Bank of Canada and National Bank of Canada will report results on Wednesday. Toronto-Dominion Bank, Bank of Montreal and Canadian Imperial Bank of Commerce will wrap up earnings week for the Big Six lenders on Thursday.
Scotiabank shares have climbed 24 per cent this year, outperforming the 18-per-cent rise of the S&P/TSX Composite Banks Index.
- Stefanie Marotta
Tesla Inc. (TSLA-Q) was down 1.6 per cent after the automaker’s sales of China-made electric vehicles fell 4.3 per cent year-on-year to 78,856 in November, data from the China Passenger Car Association showed.
Deliveries of China-made Model 3 and Model Y vehicles recorded a 15.5-per-cent increase from the previous month.
Chinese rival BYD, with its Dynasty and Ocean lineups of EVs and plug-in hybrids, hit yet another monthly record high with passenger vehicle sales up 67.2 per cent year-on-year to 504,003 units last month.
Overseas shipments made up 6.1 per cent of the total sales, per a company filing.
Tesla has ramped up China incentives at the year end with a time-limited 10,000 yuan ($1,375.89) discount on outstanding loans for its best-selling Model Y, as it lost ground amid a BYD-led cost-cutting competition.
Late Monday, a Delaware judge ruled on Monday that Tesla CEO Elon Musk still is not entitled to receive a US$56-billion compensation package despite shareholders of the electric vehicle company voting in June to reinstate it.
The ruling by the judge, Chancellor Kathaleen McCormick of the Court of Chancery, follows her January decision that called the pay package excessive and rescinded it, surprising investors, and cast uncertainty over Mr. Musk’s future at the world’s most valuable carmaker.
In a post on X after the decision, Mr. Musk said that “shareholders should control company votes, not judges.”
Tesla in a statement on X said, “The ruling is wrong, and we’re going to appeal,” adding that the judge had overruled a supermajority of shareholders.
U.S. Steel (X-N) fell 8 per cent after U.S. President-elect Donald Trump said on Monday a series of tax incentives and tariffs will revive the storied American firm, as he reiterated his opposition to Nippon Steel’s planned US$15-billion purchase of the company.
“I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan,” Mr. Trump wrote on his social-media platform Truth Social.
“I will block this deal from happening. Buyer Beware!!!”
Nippon Steel hopes to close the deal before Mr. Trump retakes the White House on January 20, despite opposition from President Joe Biden and a powerful U.S. labour union.
In a statement on Tuesday following Mr. Trump’s comments, Nippon Steel said it would invest no less than US$2.7-billion into U.S. Steel’s unionized facilities, secure union jobs and share technological innovations.
“Nippon Steel is determined to protect and grow U.S. Steel in a manner that reinforces American industry, domestic supply chain resiliency, and U.S. national security,” it said.
BlackRock (BLK-N) finished flat on news it will buy private credit firm HPS Investment Partners for about US$12-billion in an all-stock deal, the companies said on Tuesday, as the world’s largest asset manager seeks to expand in a red-hot market.
Private credit, or lending to companies by institutions other than banks, has grown rapidly in recent years as stricter regulations made it more expensive for traditional lenders to finance riskier loans.
The asset class is expected to grow to US$2.6-trillion by 2029 from US$1.5-trillion at the end of 2023, as per Preqin data.
BlackRock CEO Larry Fink has previously outlined private credit to be a “primary growth driver” within alternatives for BlackRock in coming years.
“Together with the scale, capabilities, and expertise of the HPS team, BlackRock will deliver clients solutions that seamlessly blend public and private,” Fink said in a statement on Tuesday.
HPS was founded in 2007 as a division of Highbridge Capital Management, the hedge fund unit of JPMorgan’s asset management arm. In 2016, top HPS executives acquired the firm from JPMorgan.
Since then, the New York-based company has become a massive private credit player, with assets under management vaulting to about US$148-billion as of September from US$34-billion in 2016.
Constellation Brands (STZ-N) dipped after it said on Tuesday it would sell its Svedka vodka to New Orleans-based Sazerac, as the Corona beer maker looks to focus on its premium wine and spirits business.
The company did not disclose the terms of the deal.
Constellation acquired Svedka in 2007 when it bought Spirits Marque One LLC for US$384-million from Guillaume Cuvelier and Belgium-based Alcofinance SA.
Sazerac produces a wide range of spirits, and owns brands including such as Southern Comfort and Fireball.
Despite beating second-quarter sales estimates in early October, buoyed by steady demand for its popular beer brands, Constellation has struggled with its wines and spirits segment including its premium wine brands like Meiomi.
The company recently wrote down the value of its wine and spirits business, taking a US$2.5-billion charge.
Industry peers Molson Coors (TAP-N) and Brown-Forman (BF-B-N) have also been struggling with tepid demand for wine and spirits as consumers cut back on non-essential goods.
Brazilian mining giant Vale (VALE-N) lost 1.1 per cent after it said on Tuesday it expects to produce between 325 million and 335 million metric tons of iron ore in 2025, following an output of about 328 million tons this year.
Vale, one of the world’s largest iron ore producers, released the estimates ahead of an investor day in New York, where executives are expected to detail the forecasts and comment on the firm’s strategic plans.
The Brazilian company reiterated it expects to keep increasing iron ore output in the coming years, estimating it to reach between 340 million and 360 million tons in 2026 and about 360 million tons in 2030.
Vale said it has started commissioning the so-called Capanema project at its Mariana complex, aiming to add about 15 million tons per year of iron ore, “an important milestone towards achieving the iron ore production guidance in 2026.”
The 2024 production figure came in within Vale’s previously announced forecast of 323 million to 330 million tons.
The company also said it expects to produce 340,000 to 370,000 tons of copper in 2025, after output of about 345,000 tons this year.
Vale’s chief executive Gustavo Pimenta took office in October pledging to boost copper production, conceding the Brazilian company had lost ground to competitors in output of the key industrial metal.
Vale’s copper production is expected to reach 350,000 to 380,000 tons in 2026, 420,000 to 500,000 tons in 2030, and about 700,000 tons in 2035.
Nickel production, meanwhile, is seen rising from around 160,000 tons this year to a range of 160,000 to 175,000 tons next year, 175,000 to 210,000 tons in 2026, and 210,000 to 250,000 tons in 2030, Vale added in a securities filing.
The mining giant also said its sees its capital expenditure (CAPEX) totaling about US$6.1-billion this year and around US$6.5-billion in 2025 and beyond.
Live Nation (LYV-N) shares fell after the concert promoter launched an offering of US$1-billion in convertible senior notes.
The Beverly Hills, California-based company plans to use the net proceeds to repurchase portion of its 2-per-cent convertible bonds due 2025, and to repay debt.
With 232.4 million shares outstanding, Live Nation has US$32-bln market cap, according to LSEG data. Through Monday’s close, its shares have gained 47 per cent year-to-date, outperforming both the S&P 500 Communication Services (36 per cent) and the broader S&P 500 (27 per cent).
With files from staff and wires