Inside the Market’s roundup of some of today’s key analyst actions
ATB Capital Markets analyst Tim Monachello thinks first-quarter earnings for Canadian energy services providers “don’t matter much anymore.”
“Given the tectonic shift in commodity prices since Liberation Day, the value of Q1/25 earnings is largely limited to commentary regarding leading edge customer demand,” he explained. “To this end, we believe contract outlooks will be a focal point as will relative balance sheet strength and capital flexibility through 2025.”
In a research report released before the bell on Monday, Mr. Monachello said he is “looking for a clear direction” from the industry from U.S. President Donald Trump’s “Liberation Day” as tariff turbulence continues to have a significant impact on the entire Energy sector.
“WTI crude prices are down 15 per cent since April 2, 2025 on the combined impact of 1) wide-ranging tariffs announced by the US government on global trading partners piling-on to concerns regarding the trajectory of global economic growth and oil demand, and 2) the largely unexpected announcement that OPEC plans to return 411,000bbl/d of crude supply to the market in May, 2025,” he said. “At the current intersection, uncertainty seems to be approaching peak levels with WTI crude prices at a tipping point for US shale activity. This uncertainty has driven Canadian energy services equities down 6-21 per cent across our coverage since April 2, 2025, with the most pronounced pull-backs on the best performing equities in 2024. Overall, we believe the sector is generally oversold even in a moderate downturn scenario, though until there is better clarity on the outlook for NAM activity levels, the sector lacks a meaningful catalyst, in our view.”
“2024 winners have seen gains most liberated: Canadian energy services equities are down 30 per cent on average since Liberation day, with some of the highest quality companies down the most. While investors are likely feeling anything but liberated since April 2, 2025, stock performance suggests they have differentially released positions in their relative energy services winners from 2024. The most extreme examples have been CEU and EFX, down 21 per cent and 19 per cent respectively since Liberation Day, while being up 188 per cent and 133 per cent in 2024. Both CEU and EFX have more moderate exposure to downside than pure-play drilling and completions companies; CEU is roughly 45-50-per-cent exposed to the drilling cycle, while EFX generates over 70% of its 2025e gross margin from highly contracted recurring revenue businesses. As such, the differential downside in both is primarily a result of multiple contraction. Our modeling suggests CEU is trading at 4.2 times 2025 estimated EV/EBITDAS vs a 6.9 times peak multiple in 2024 while EFX is trading at 3.7 times 2025e EV/EBITDAS vs a peak multiple in 2024 at 5.1 times.”
After reducing his estimates to account for the significant turbulence, Mr. Monachello named three top picks in his coverage universe heading into earnings season, emphasizing he’s “focused on defensive value.” They are:
* CES Energy Solutions Corp. (CEU-T) with an “outperform” rating and $10 target, falling from $11. The average target on the Street is $10.34, according to LSEG data.
Analyst: “CEU is down 40 per cent year-to-date, 21 per cent since Liberation Day, and is up 4 per cent over the past 12-months. While CEU is down more ytd than most pure-play drilling and completions companies, it’s cyclical drilling fluids business represents roughly 45-50 per cent of CEU’s EBITDA, with the remaining 50-55 per cent generated from its much less cyclically exposed production chemicals businesses. In addition, CEU had roughly $636-million non-cash working capital at year-end 2024 (compared to $458-million net debt, including leases), and in periods of activity decline CEU has been able to harvest significant working capital; our downside scenario analysis suggests CEU could ultimately generate higher FCF in a downside scenario as it curtails capex and harvests working capital. Fundamentally, CEU continues to drive meaningful market share expansion across its North American platform.”
* North American Construction Group Ltd. (NOA-T) with an “outperform” rating and $36 target, down from $37. Average: $39.86.
Analyst: “NOA is down 33 per cent year-to-date, 12 per cent since Liberation Day, and 28 per cent over the past 12-months. With roughly $1.6-billion of contracts inked in 2024, we believe NOA’s 2025 guidance range is largely de-risked. Fundamentally we believe NOA’s business is among the most insulated from activity downside in the current environment given its diversified geographic and end-market exposure to long-cycle mining projects.”
* Total Energy Services Inc. (TOT-T) with an “outperform” rating and $18 target, rising from $17. Average: $17.
Analyst: “TOT is down 22 per cent year-to-date, 12 per cent since Liberation Day, and down 8 per cent over the past 12-months. TOT offers defensive positioning with high Canadian (46 per cent of 2025 estimated revenue) and Australian (24 per cent of 2025e revenue) exposure and while its U.S. exposure is more modest than most (31 per cent of 2025e revenue). Further, TOT’s growth is largely supported by long-term contracts in Australia that are tied to LNG for Asian markets, one of few potential winners following Liberation Day. Further, TOT has a clean balance sheet with 0.5 times net leverage at year-end 2024, and we believe its downside risk is also mitigated by its compelling valuation that leaves limited room for multiple compression.”
Mr. Monachello’s other target changes are:
- ACT Energy Technologies Ltd. (ACX-T, “outperform”) to $7.75 from $8.50. Average: $9.44.
- Enerflex Ltd. (EFX-T, “outperform”) to $16.50 from $18. Average: $14.38.
- PHX Energy Services Corp. (PHX-T, “outperform”) to $11.50 from $12. Average: $11.67.
- Western Energy Services Corp. (WRG-T, “sector perform”) to $2.75 from $3.25. Average: $2.88.
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Following Friday’s release of first-quarter results that largely fell in line with expectations, National Bank Financial analyst Patrick Kenny sees Secure Waste Infrastructure Corp. (SES-T) “gearing up for the downcycle.”
“With the recent decline in oil prices and a softer economic outlook, the company noted the potential for a slowdown in customer capex and activity levels, which could have some impact on its business operations,” he said.
“That said, 80 per cent of the company’s adj. EBITDA is tied to ongoing production and industrial activity, while only 20 per cent is linked to drilling and completions. Meanwhile, SES has increased its organic growth capital program for 2025 by $40-million to $125-million, underpinned by a 10-year contract with a senior E&P to provide produced water infrastructure in the Montney region of Alberta (ISD Q1/26). Elsewhere, SES continues to integrate the recently acquired Edmonton-based metals recycling business for $162-mlilion while determining not to proceed with the remaining $18-million B.C.-based metals recycling tuck-in following due diligence.”
The Calgary-based company, which provides fluids and solids solutions to the oil and gas industry, reported quarterly adjusted EBITDA, excluding share-based compensation, of $111-million, exceeding Mr. Kenny’s projection by $1-million but under the consensus projection by $6-milllion. He attributed the beat to his estimate to “strong specialty chemicals performance, partially offset by reduced waste processing activity due to cold weather and fewer Marketing opportunities within Energy Infrastructure.”
Secure also reaffirmed its 2025 pre-SBC adj. EBITDA guidance range of $510-540-million. Mr. Kenny’s projection is $510-million, while the consensus sits at $526-million.
“Despite bumping our numbers down to the low end of 2025 adj. EBITDA guidance, bringing the $40-million Montney-based water infrastructure project into our model taps up 2026 estimated AFFO [adjusted funds from operations] per share to $1.80 (was $1.73),” he added. “On the leverage front, incorporating the incremental $200-million of share buybacks from the recently announced SIB (offer expires May 14), our 2026 estimated D/EBITDA moves up to 1.6 times (was 1.1 times), albeit remaining below the company’s target of 2.0-2.5 times.”
Maintaining his “outperform” recommendation for Secure shares, Mr. Kenny lowered his target by $1 to $17. The average is $17.50.
Other analysts making target adjustments include:
* RBC’s Arthur Nagorny to $15 from $17 with a “sector perform” rating.
“While Secure remains well positioned for 2025, we believe there could be some downside risk to guidance should oil prices or the macro backdrop deteriorate from current levels. As such, we lower our valuation multiple modestly to reflect the slightly elevated risk backdrop and revise our PT,” said Mr. Nagorny.
* Scotia’s Konark Gupta to $19 from $19.50 with a “sector outperform” rating.
“We maintain our SO rating while modestly trimming our target ... due to incremental growth capex in the short term which drives our 2026-2027 EBITDA and FCF estimates higher,” said Mr. Gupta. “Q1 results came in ahead as organic growth remains positive (both volume and pricing) and recent investments are contributing (M&A and growth projects). The company maintained 2025 guidance for earnings and cash flows, while increasing the capex budget, underpinned by new long-term contracts. Management noted that activity levels remain strong despite recent tariff/macro noise and commodity price volatility, given the company’s core infrastructure supports recurring waste and energy streams, positioning the business to perform across all cycles. SES continues to create value for shareholders through capital returns and growth investments, which along with its highly attractive valuation at 7.5 times EV/EBITDA on 2025E support our positive thesis.”
* ATB Capital Markets’ Nate Heywood to $19 from $20 with an “outperform” rating.
“On the call, management reiterated its confidence in the 2025 EBITDA guidance range of $510-$540-million, which is believed to appropriately capture current uncertainties around the economic environment, declining commodity prices and tariff uncertainty,” said Mr. Heywood. “Management continues to point to its strengthened high-quality cash flows and recurring waste volumes. Additionally, conversations touched on the continued conviction in share repurchases as an attractive use of capital, illustrated by its recent commencement of the $200-milion SIB in 2025. SES continues to point to a divestiture multiple on 29 facilities in early-2024 of 7.5 times on a TTM [trailing 12-month] EBITDA basis and is currently trading near 7.0 times 2025e and 6.4 times in 2026e. With this update, management announced new growth projects, including a greenfield water disposal facility development in the Montney, underpinned by a 10-year contract agreement. Overall, SES continues to trade at an attractive valuation relative to waste management and energy infrastructure peers and could benefit from illustrating an insulated cash flow profile in the current environment while continuing to return value to shareholders. The attractive leverage position of 1.3 times exiting Q1/25 also provides ample flexibility for capital allocation toward growth, M&A, and share repurchases given a target leverage multiple of 2.0-2.5 times.”
* CIBC’s Jamie Kubik to $15.75 from $15.25 with a “neutral” rating.
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In a research note released Monday titled “Impressive. Most impressive”, Desjardins Securities’ Chris MacCulloch said he sees Advantage Energy Ltd. (AAV-T) “well-positioned to resume share buybacks later this year upon meeting its $450-million net debt target,” despite a recent oil price weakness.
The equity analyst added investor attention is likely to remain focused on strategic developments from the Calgary-based company’s newly formed special board committee, which he thinks could “help unlock hidden value in the story, including through targeted dispositions.”
“By all accounts, it was an impressive quarter for AAV, which wrapped up its winter drilling campaign on a high note with recent Montney and Charlie Lake well results continuing to outperform internal type curve expectations,” he said. “Those well results, along with continued efficiency realizations from the Charlie Lake acquisition, helped reduce per-unit operating costs toward the lower end of the guidance range, which contributed to a strong production and cash flow beat. Accordingly, we have lifted our 2025 production forecast to the mid-point of guidance while increasing our liquids weighting, which contributed to our target price bump.
“With operations running smoothly in an otherwise choppy commodity price environment, investors will remain keenly focused on developments from the special committee of independent directors, specifically their plan to unlock embedded value within the company. On the conference call, management was understandably tightlipped other than to suggest that the process would be thorough while reiterating the relative scarcity of Montney resource following an extensive period of industry consolidation in recent years. Reading between the lines, it will almost certainly require a premium bid to shake assets loose from AAV, which could prove difficult in view of current macro uncertainty, even with a more constructive set-up for natural gas fundamentals. We are all waiting with bated breath.”
With higher cash flow expectations through 2026, Mr. MacCulloch bumped his target for Advantage shares to $14 from $13.50, reiterating a “buy” recommendation. The current average is $13.77.
In a separate reports, Mr. MacCulloch also increased his targets for these stocks:
* ARC Resources Ltd. (ARX-T) to $34.50 from $33.50 with a “buy” rating. The average is $32.74.
“Although 2Q25 volumes will be negatively impacted by the temporary curtailment of Sunrise volumes in response to depressed Station 2 prices and production emulsion hiccups at Attachie, ARC is well-positioned to accelerate buybacks through the balance of the year after bankrolling considerable FCF in 1Q25,” he added.
* Headwater Exploration Inc. (HWX-T) to $7 from $6.75 with a “hold” rating. The average is $8.47.
“Interestingly, the company enhanced its ability to return capital to shareholders through a newly minted NCIB while the technical team continues expanding its opportunity set of future growth prospects,” he said. “Either way, HWX remains well-positioned in our view to withstand an extended period of oil price weakness through its strong balance sheet and low breakeven costs of US$53/bbl WTI.”
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While noting Brookfield Corp. (BN-N, BN-T) is “not immune to heightened public market volatility/macro uncertainty, TD Cowen analyst Cherilyn Radbourne sees it ”well-positioned to play offence should value investment opportunities emerge, based on significant corporate liquidity/uncalled fund commitments."
“BN is well-positioned to capitalize on a period of significant dislocation, and such periods have historically yielded some of its best deals,” she explained. “As of Q4/24, BN had approximately $6-billion of corporate liquidity plus $91-billion of uncalled fund commitments, and as of Q1/25, BEP, BIP, and BBU had available corporate liquidity (pro forma) of $4.5-billion, $2.4-billion, and $2.3-billion, respectively. That liquidity, plus the relative defensiveness of the underlying cash flows in BN’s operating businesses enable the group to play offense.
“BN and BAM are not immune to heightened public market volatility/macro uncertainty, but both stocks have outperformed the other alternative asset managers year-to-date. From a BN perspective, we attribute this outperformance partly to 1) the composition of 73-per-cent- owned BAM’s DE, which comes from FRE vs. more market-sensitive earnings streams (performance fees, carried interest, etc.) and 2) the prospect of wider U.S. index inclusion for BAM over the next year. We are positive on the standalone prospects for BAM, but we see BN as a cheaper way to own BAM and like the upside optionality in BN’s unlisted assets and carried interest.”
After reducing her forecast in response to “a somewhat lower contribution from BAM, lower carried interest, a recent notes issuance, and share buybacks,” Ms. Radbourne lowered her target for Brookfield’s NYSE-listed shares to US$74 from US$77 with a “buy” rating (unchanged). The average is US$64.14.
“BN has a long track record of being a strong compounder of earnings/value, in our view,” she said. “BN owns 73 per cent of Brookfield Asset Management (BAM), which is targeting to compound DE at an 18-per-cent CAGR [compound annual growth rate] during 2024-2029 and is a global leader in renewables/transition/infrastructure investing, all areas where we see high growth and strong LP interest. BN’s wealth solutions business has grown to $120-billion-plus of AUM in just 2-3 years and is targeting $300-billion by 2029. Investor sentiment with respect to the on-balance-sheet real-estate portfolio has bottomed and is on the upswing. Carried interest should be poised to inflect meaningfully higher in 2026/2027+ as deal velocity reaccelerates following a quiet two-year period. In our view, there is substantial unrecognized value in BN’s share price.”
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RBC Dominion Securities analyst Pammi Bir thinks signs of stabilizing operating metrics are beginning to emerge for Allied Properties REIT (AP.UN-T), pointing to steady occupancy and improving organic growth.
However, he emphasized net operating income fell short of his forecast in a first quarter results that was “modestly” below his expectations.
“Operational guidance sticks, though risks seem tilted to the downside,” he said. “SP NOI turned positive (up 1.5 per cent year-over-year) for the first time since Q3/23, mainly from rents commencing at completed projects. Encouragingly, in-place occupancy was stable at 85.9 per cent, with AP reiterating its call to reach at least 90 per cent by Q4/25. Several drivers underpin its confidence, including improving lease conversion rates and retention, larger space mandates, and tenant expansions. As well, leases currently in negotiation total 1.3 million square feet (50/50 new/renewals), up 39 per cent quarter-over-quarter, with demand from tech, media, professional, education, and medical services. Combined with further stabilization of developments, AP upheld its 2025 SP NOI guide of 2 per cent. While the target seems achievable, we believe risks are skewed to downside, particularly should tenants delay decisions amid trade war related uncertainty.
“Balance sheet deleveraging still high on the agenda, with heavy lifting ahead. After a quiet Q1, dispositions of low-yield, non-core assets should pick-up to $50-million in Q2. For 2025, management upheld its $300-million target (we estimate 4-per-cent cap rates), with $277-milion of assets held for sale. Despite low macro visibility, AP noted unsolicited interest from private buyers remains resilient. Together with the anticipated repayment of the $230-million loan receivable from Westbank and NOI growth, AP sees leverage below 10 times by year-end (vs. current elevated 11.6 times) and less than 9 times by the end of 2026 (aided by KING Toronto condo sales). Considering the number of stars that need to align, our forecasts reflect a modestly longer timeline.”
Reducing his fiscal 2025 and 2026 forecast due to expected lower net operating income and condo profits, Mr. Bir warned “hitting management’s operating and financial targets will require some precise execution against a backdrop of downside economic risks and weak office fundamentals.”
Maintaining his “sector perform” rating, he also lowered his target to $17 from $18. The average is $17.36.
“From our lens, current levels reasonably balance its challenged near-term earnings growth profile, high payout ratio, and work to do on the balance sheet,” he said.
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In other analyst actions:
* Canaccord Genuity’s Jeremy Hoy upgraded Artemis Gold Inc. (ARTG-X) to “buy” from “speculative buy” with a $27 target, exceeding the $22.22 average on the Street.
* Scotia’s Jonathan Goldman lowered his Adentra Inc. (ADEN-T) target to $33 from $43 with a “sector outperform” rating. The average is $42.78.
“Consensus estimates remain stubbornly high, in our view, in the face of worsening consumer sentiment, which has historically been a reliable leading indicator of housing market demand,” he said. “Peer guidance updates and commentary from recent result calls confirms as much. We have materially lowered our 2025E/2026E and now sit 12 per cent/12 per cent below the Street. Our back of the envelope math takes 4Q EBITDA of $42 million as a starting point (since it includes a full quarter of Woolf) – or $168 million annualized – and assumes things got incrementally worse in 1Q and do not improve for the balance of the year. For context, consensus is forecasting $184 million in 2025, including a significant step-up to $50 million in 2Q.
“ADEN shares trade at 6.5 times on our Street low 2025E/2026E vs. historicals at 7 times. We would argue the valuation should be higher given our forecasts represent below mid-cycle earnings power and margins are structurally higher due to mix. That said, ADEN is one of the higher beta names in our coverage as a small cap with elevated leverage (we forecast 2.9 times ex leases exiting 1Q) and lower trading liquidity. A reset in expectations could lead to additional pressure on the shares in the near-term.”
* Scotia’s Orest Wowkodaw raised his Capstone Copper Corp. (CS-T) target to $11 from $10 with a “sector outperform” rating. The average is $11.39.
“CS released in-line Q1/25 results and reconfirmed all 2025 guidance. Most important, the ramp-up of the new Chilean Cu sulphide assets continues to progress well. As expected, the potential sanctioning window for the proposed Santo Domingo (SD) Cu-Fe project in Chile has been pushed back to at least mid-2026. Although the quarter was simply in-line, we are encouraged by the positive progress of the Chilean ramp-ups and welcome an extra 6-12 months of balance sheet deleveraging before starting a SD build.
“We rate CS shares SO based on peer-leading Cu growth and leverage, an attractive valuation, and takeover optionality,” he said.
* Mr. Wowkodaw also increased his Lundin Mining Corp. (LUN-T) target by $1 to $14 with a “sector outperform” rating. The average is $15.03.
“LUN released a significantly larger-than-anticipated maiden mineral resource estimate for its massive high-grade Filo Del Sol (Filo) Cu-Au-Ag sulphide deposit in Argentina. Filo is the flagship asset within the Vicuña District, a 50/50 JV with BHP. With total contained Cu (M&I+INF) of 38Mt, the combined Vicuña District (Filo + Josemaria) already ranks as one of the world’s largest known Cu resources.” he said. “Moreover, with total contained by-product Au-Ag (M&I+INF) of 81M ozs and 1.5B ozs, respectively, Vicuña has the third-largest Au resources and second-largest Ag resources within operating mines. Overall, given the 16-per-cent increase to our NAVPS estimate, we view the update as very positive for the shares.
“We rate LUN shares SO based on valuation, the material de-risking (project development and FCF outlook) via the new Vicuña District JV, and medium-term takeover optionality.”
* CIBC’s Krista Friesen raised her target for Magna International Inc. (MGA-N, MG-T) to US$38 from US$33 with a “neutral” rating, while TD Cowen’s Brian Morrison increased his target to US$45 from US$44 with a “buy” rating. The average is US$41.03.
“While economic uncertainty concerns remain, we believe we are nearing a bottoming of financial revisions aided by operational efficiencies/ improving tariff visibility. Achieving the low-end of guidance would imply a compelling valuation and improve sentiment toward an underowned sector,” said Mr. Morrison.
* CIBC’s Hamir Patel reduced his Methanex Corp. (MEOH-Q, MX-T) target to US$44 from US$47 with an “outperformer” rating. The average is US$47.10.
* Jefferies’ Samad Samana lowered his Shopify Inc. (SHOP-Q, SHOP-T) target to US$110, below the US$119.60 average, from US$130 with a “hold” rating.
* Desjardins Securities’ Gary Ho hiked his target for shares of TerraVest Industries Inc. (TVK-T) to $172 from $150 with a “buy” rating, while Scotia’s Jonathan Goldman raised his target to $171 from $141 with a “sector outperform” rating. The average is $175.75.
“We would categorize the tone from our TVK marketing trip as positive,“ said Mr. Ho. ”The EnTrans platform acquisition provides many organic growth vectors—defence contracts, cryogenic trailers, parts and service, leasing opportunities, TANK Ai—that more than justify the 7 times multiple paid in our view. We are introducing FY27 estimates which reflect the full impact from its US$588.6-million DoD contract win. We reiterate TVK as one of our favourite ideas in our coverage. "
* TD Cowen’s Cherilyn Radbourne cut his Toromont Industries Ltd. (TIH-T) target to $136 from $143 with a “buy” rating. The average is $129.56.
"The EPS miss was double-digit, but Q1 is seasonally weak and some customers understandably delayed purchasing decisions based on trade-related uncertainty. There were also some encouraging details 1) strong deliveries in mining/power systems, which build the product support annuity; 2) higher rental utilization in some areas; 3) resilient Equipment Group bookings; and 4) a record backlog at CIMCO," she said.