Inside the Market’s roundup of some of today’s key analyst actions
After delivering 5.0-per-cent volume growth in the first half of 2025, Canadian Pacific Kansas City Ltd. (CP-T) is “positioned to meet or potentially exceed guidance with comps set to ease in H2/25,” according to ATB Capital Markets analyst Chris Murray.
Ahead of the July 30 release of its second-quarter financial results, he reaffirmed his earnings per share projection of $1.15, a gain of 9.7 per cent year-over-year and a penny above the Street’s forecast driven by stronger-than-anticipated volume growth of 6.3 per cent despite tariff-related headwinds. He attributed the increase to strength in intermodal and bulk commodities mitigating softer industrial freight.
“Volume growth in Q2/25 was led by grain (up 12.6 per cent year-over-year) and intermodal (up 19.0 per cent y/y), partially offset by softness in energy, chemicals, and plastics (down 5.0 per cent y/y) and fertilizer (down 7.0 per cent y/y),” said Mr. Murray. “We believe initial fears surrounding tariffs were the primary driver behind the outperformance in intermodal, with grain benefiting from a large harvest and volumes that were disrupted by severe weather in Q1/25. We will be looking for management’s outlook for the upcoming grain harvest, industrial demand, and expectations for intermodal in H2/25 with Q2 results.
“We expect stronger volumes, healthy pricing conditions, and network efficiency to support stronger EPS growth in H2/25. Volume trends are expected to benefit from a softer comp in H2 due to work stoppages in H2/24 combined with synergy realization and idiosyncratic growth initiatives. CPKC remained active on its NCIB in Q2/25 (repurchasing approximately 1.0 per cent of the float), which we expect to continue given leverage trends and the FCF profile.”
After modest reductions to his full-year earnings forecast for both 2025 and 2026 to reflect the impact of a stronger Candian dollar, Mr. Murray trimmed his target for CPKC shares to $123 from $124, reiterating an “outperform” rating. The average target on the Street is $120.03, according to LSEG data.
“Our focus with the results will be on volume expectations in H2/25, particularly intermodal, as well as idiosyncratic opportunities and the outlook for the upcoming Canadian grain harvest,” he said. “CPKC remains our preferred Class 1 name given its less macro-dependent growth story combined with opportunities to unlock synergies over the longer term, which we believe justifies the current premium.”
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In a separate report released Monday, Mr. Murray said he expects a “stronger” second half of 2025 for Canadian National Railway Co. (CNR-T), seeing volumes “soft but better than feared.”
“CN reported better-than-expected volume growth in Q2/25, with grain mitigating weakness in industrial and intermodal volumes,” he said. “ATB estimate for Q2/25 has been left unchanged, with the volume performance effectively offset by expectations around yield. While we expect volume and margin trends to improve in H2/25, primarily due to easing comps and less disruption, we continue to view the volume environment and macro conditions as risks to full year guidance and the 2026 targets. We will be looking for an update on intermodal and grain, and the impact of company-specific growth initiatives with Q2/25 results. Valuation and uncertainty around several key freight types keep us neutral on CN.”
Ahead of its July 22 quarterly release, Mr. Murray is estimating earnings per share of $1.90, matching the consensus projection and implying 2.9-per-cent year-over-year growth. He said that reflects “the current volume environment and a challenging comp, and assumes an operating ratio (O/R) of 61.5 per cent, down 190 basis points quarter-over-quarter and consistent with normal seasonality.”
“We expect volume growth and healthy pricing conditions to support stronger EPS growth in H2/25, an outlook management has reaffirmed during recent presentations,” he added. “Volume trends are expected to benefit from a softer comp in H2 due to several labour/operational issues in H2/25 combined with CN-specific growth initiatives, with guidance assuming limited support from industrial activity. Operating KPIs improved in Q2 (velocity exceeding 200 miles per day), which should allow for greater operating leverage in H2 given the volume outlook.”
Maintaining his “sector perform” rating, he cut his target for CN shares by $1 to $155. The average is $162.47.
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While acknowledging the global tariff battle “remains fluid,” RBC Dominion Securities analyst Irene Nattel thinks the U.S. 90-day reprieve on China imports should “relieve pressure” on Aritzia Inc.’s (ATZ-T) second-half margins “with timing of the pause broadly coinciding with first waves of onshoring of fall/winter collections.”
In a research report released Monday, she raised her fiscal 2026 and 2027 earnings per share forecasts by 7 per cent and 5 per cent, respectively, to reflect “underlying momentum and a more manageable tariff situation, at least near-term.”
“Importantly, we remind investors that new store openings and related regional eCommerce growth typically generates close to 80 per cent of forecasted growth,” said Ms. Nattel.
For its first-quarter of 2026, she is projecting earnings per share of 39 cents, matching the consensus forecast on the Street, ahead of its Thursday release. She sees revenue coming in at $639-million, which at the high end of the company’s guidance of $620-640-million.
“New store openings and maturation of F25 square footage growth, management commentary on the FQ4 call, and channel checks point to strong top line growth in Q1/F26,” she said. “Expecting year-over-year margins to trend nicely positive driven by IMU [initial mark-up] improvements, lower freight, and savings from smart spending initiatives and cost reductions, partially offset by increasing investments in digital and technology investments.”
Given the improving near-term conditions, Ms. Nattel raised her target for Artizia shares by 25 per cent to a new Street-high of $85 from $68, keeping an “outperform” rating. The average is currently $78.
“In our view, investor focus will be on any changes to F26 guidance and underlying assumptions,” she concluded.
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National Bank Financial analyst Vishal Shreedhar continues to see “compelling upside” in shares of Groupe Dynamite Inc. (GRGD-T) even after a 35-per-cent surge since he added the retailer to his “top picks” list on June 17.
“We believe that GRGD has strong metrics which could support a favourable re-rating, provided they continue to execute well,” he said.
“We believe that GRGD could ultimately trade at a multiple closer to [Aritzia Inc.], which trades at 14.3 times NTM [next 12-month] EBITDA (IFRS-adjusted); GRGD trades at 9.2 times. For reference, this would imply share price upside of 60 per cent for GRGD; continued strong execution over many quarters and relative stability in the macro-backdrop is key, in addition to sensible secondary issuances from the principal shareholder which do not inhibit share price appreciation. ... We believe that GRGD’s financial metrics compare favourably, despite trading at a discount. We note that our expectation for revenue CAGR [compound annual growth rate] of 13 per cent over the next 3 fiscal years for GRGD is similar to ATZ (consensus). Also, GRGD generates a superior EBITDA margin to ATZ (20.2 per cent in F2025; IFRS-adjusted), in addition to superior ROIC.”
Mr. Shreedhar reaffirmed his thesis and “outperform” rating on the Montreal-based company, believing it differentiates itself “by strong financial metrics, with an EBITDA margin and ROIC that are amongst the highest in our apparel group.”
To reflect his confidence in its ability to “execute on an aggressive growth agenda,” he raised his target to $32 from $25, matching the high on the Street. The average is currently $26.15.
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Raymond James analyst Stephen Boland predicts a “stellar” quarter for Fairfax Financial Holdings Ltd.’s (FFH-T) investment portfolio.
“Many of Fairfax’s largest equity investments (e.g. Eurobank, Fairfax TRS, Digit) have seen considerable share price gains since the close of 2Q55, and while some of these are equity-accounted (and thus market gains excluded from book value), we estimate the fair value gain on Fairfax’s known public equity positions is $2.4 billion for the quarter,” he said. “We also believe the gap between the carrying value and book value for these investments has widened to $2.5 billion as of 2Q25, up from $1.4 billion at the end of 2Q25 and equivalent to 9 per cent of reported book value.
However, Mr. Boland also thinks “the market is well aware of this dynamic,” noting Fairfax shares are up 21.5 per cent in 2Q25, and his revised estimates “suggest the company is well on track to deliver a 20-per-cent-plus ROE this year.”
“To be clear, the shares still screen inexpensive; if we adjust our 2026 book value estimate for the current gap between reported and investment fair values, Fairfax is trading at 1.2 times 2026E book value – 36 per cent off our chosen peer group despite a superior (and we argue, more reliable) ROE outlook,“ he said. ”Recall this is a company that continues to execute across all facets of the business – solid underwriting performance, exceptional equity returns, and a low-risk, $2.5 billion+ interest/dividend revenue stream that we view as effectively locked-in for the next 3 years."
Retaining his “outperform” rating for Fairfax shares, Mr. Boland raised his target to $2,900 from $2,600. The average is $2,680.31.
“Unsurprisingly, Fairfax remains our top insurance pick and among our top picks overall,” he said. “The company has an abundance of excess capital (approximately $6-billion by our estimates), continues to buy back shares at attractive prices, and looks a reformed business since ending its shorting/hedging program in 2020. With the other insurers trading close to peak multiples following several years of hard market conditions, Fairfax remains the cheapest insurer in our coverage, notwithstanding a more diversified business mix that leaves it arguably less exposed to a softer North American P&C cycle. We are moving our BVPS and GAAP EPS estimates higher to reflect the strong quarterly investment gains, while increasing our target to $2,900 (from $2,600).”
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Paradigm Capital’s Jeff Woolley thinks Taseko Mines Ltd.‘s (TKO-T) Florence Copper development project in Arizona is “a potential game changer” and “represents the next stage of low-cost growth and production diversification.”
“Taseko is fast approaching an inflection point which will transform the company to become a multi-asset copper producer and set the stage for materially increased cash flow generation and balance sheet deleveraging,“ the equity analyst said. ”Construction of the Florence Copper project in Arizona is nearing completion with well field activation targeted for late Q3/25 and first cathode copper production by year-end. Additionally, the recent agreement between Taseko, the B.C. government and the Tŝilhqot’in Nation concerning the long-stalled New Prosperity project has supplemented Taseko’s coffers by $75-million, providing a larger liquidity cushion during the Florence project ramp-up period.“
In a client report released before the bell, Mr. Woolley emphasized Florence has the potential to produce 85 million pounds of copper annually at fully capacity over a 22-year mine life, which will increase Taseko’s annual production 65 per cent. Cash costs are estimated to be “materially” lower than at its current open-pit Gibraltar mine in B.C.
“The Florence Copper project is an In-situ Leach (ISL) mine making it unconventional among copper operations, but well suited to the geology present at Florence,” he said. “The ISR process consists of injecting a low-pH solution (weak sulphuric acid) into the naturally fractured copper orebody via a series of injection wells causing copper minerals to dissolve into solution which is pumped back to surface through recovery wells. The copper-rich Pregnant Leach Solution (PLS) is then processed through a conventional solvent-extraction and electrowinning plant (SX/EW) where copper is precipitated and then plated on site to produce 99.99-per-cent-pure copper cathodes. The benefits of ISR are multiple, including minimal land disturbance, lower greenhouse gas emissions, lower operating costs compared to conventional openpit or underground mining, and no need to transport concentrates around the globe for further smelting and refining.”
Maintaining his “buy” rating for Taseko shares, Mr. Woolley raised his target to $5.25 from $4.50, seeing several potential milestones ahead. The average is $4.83.
“With Taseko’s coffers topped up from the $75-million New Prosperity agreement, the company is derisked from a liquidity standpoint in our opinion, now with an estimated US$250-million of combined cash on hand and credit lines available versus our estimated US$65-million remaining initial construction costs,” he explained. “The next milestone for Florence will be acidification of the well field targeted for late Q3. Presuming well flow rates can be quickly established this would have plating of the first copper cathodes by year-end; 2026 would be a ramp-up year and we would expect full production levels to be achieved by late next year.”
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In other analyst actions:
* Following Friday’s announcement from H&R Real Estate Investment Trust (HR-UN-T) of the formation of a special committee of independent directors to consider its strategic options, which sent it shares soaring over 17 per cent, Scotia’s Mario Saric raised his target for its units to $14 from $12 with a “sector perform” rating, while TD Cowen’s Sam Damiani hiked his target to $14.50 from $11.50 with a “buy” rating. The average is $12.42.
“We’re short-term tactical buyers as opposed to sellers given we also considered H&R a fundamentally preferred ‘Sector Perform’ REIT going into 2025,” Mr. Saric said.
* Barclays’ Theresa Chen reduced her Pembina Pipeline Corp. (PPL-T) target by $1 to $57 with an “overweight” rating. The average is $61.
“Looking past the noise, we think PPL’s base assets will perform ratably per typical seasonal patterns,” she said.