Inside the Market’s roundup of some of today’s key analyst actions
Scotia Capital analyst Maher Yaghi came away from investor meetings with Quebecor Inc. (QBR.B-T) CFO Hugues Simard believing Canada’s wireless market is “returning to a state of stability.”
“When we published our upbeat report on wireless in early June, investor mood was negative, but we described then the reasons why we thought pricing levels were un-sustainably low,” he said. “We continue to stand by the underlying assumptions and conclusions of that report. While we are feeling better about the general market tone, we believe expectations need to remain in check as we don’t believe we will likely see additional wireless price increases in the near future after the recent ones implemented in late June. We also continue to believe that Canadian wireless pricing needs to move away from data buckets to make sure the market does not fall back into the trap that drove it down in 2023/2024.
Quebecor poised to pull ahead in cellphone wars as price competition eases, analysts say
In a client report released Monday, Mr. Yaghi said he sees the sector “healing” and stock valuations “offer support and could potentially move higher still as we head into 2026.”
That led him to raise his valuation multiples, leading to new target prices for stocks in the sector. They are:
- BCE Inc. (BCE-T, “sector outperform”) to $41.50 from $39.50. The average target on the Street is $35.20, according to LSEG data.
- Quebecor Inc. (QBR.B-T, “sector perform”) to $43.25 from $40.50. Average: $43.89.
- Rogers Communications Inc. (RCI.B-T, “sector perform”) to $54.25 from $51.50. Average: $54.68.
- Telus Corp. (T-T, “sector outperform”) to $26 from $25. Average: $23.
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Seeing “clearer waters ahead,” TD Cowen analyst Wayne Lam upgraded OceanaGold Corp. (OGC-T) to “buy” from “hold” previously, believing it is “primed for growth in 2026.”
“In our view, OGC has navigated well through a transition year centred around large capital stripping programs at Haile and Macraes, which had previously driven our cautious thesis at the start of the year,” he said. “We view the performance to-date having exceeded expectations, given stronger grades at Haile, helped by a stronger gold price, which has solidified its robust balance-sheet position. While management has well-telegraphed Q3/25 as being the seasonal low point for the year, we view investor focus now turning to production growth in 2026, driven by higher grades via Ledbetter Phase 3 at Haile alongside the ramp-up of the underground at Didipio. We estimate production of 585 Koz in 2026 at AISC of $1,578/oz, representing 22-per-cent growth at 20-per-cent lower costs as stripping programs are completed.”
Mr. Lam also emphasized the company’s free cash flow generation is adding to its net cash position.
“Despite a higher guided cost structure this year due to significant capital stripping, OGC has generated $165-million in FCF through H1/25, helping bolster the balance sheet exiting Q2/25 with $299-million in cash and no debt,” he said. “Given the higher cost structure this year, we view the company as one of the primary beneficiaries of a significantly stronger gold price. Looking ahead, we estimate robust FCF generation averaging $425-million per year at spot through 2026/2027 as Haile enters its peak years of operation, opening up a wider range of capital opportunities, including increased shareholder returns on top of the dividend and $41-million in share buyback to-date, along with the evaluation of M&A to support its organic pipeline.”
He hiked his target for OceanaGold shares to $30 from $22. The average is $26.63.
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Believing near-catalysts “appear more limited,” BMO Nesbitt Burns analyst Ben Pham cut Gibson Energy Inc. (GEI-T) to “market perform” from “outperform” previously.
“We continue to have a positive view on GEI’s growth initiatives at Gateway,” he said. “This has allowed the company to grow EBITDA and FCF even as its Marketing segment is at the bottom of cycle levels (tight diffs).
“However, considering the recent run-up in the stock, we believe this positive outlook is already reflected in the share price.”
While noting there is more than $1-billion of potential growth “not yet embedded” into his revised target for Gibson shares ($27 from $26), Mr. Pham emphasized ”these projects are longer-dated." The average target on the Street is $26.71.
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National Bank Financial analyst Dan Payne thinks InPlay Oil Corp. (IPO-T) is “a very well-entrenched” producer, logging 20,000 thousand barrels of oil equivalent per day with “solid exposure across 735 net sections of land at Pembina and Willesden Green (positioning it as the largest Cardium oil landowner and producer).”
He also emphasized the Calgary-based company “maintains a long duration (at least 10-15-year inventory) of opportunity across a low-decline asset base (24 per cent) from which to support the high-efficiency harvest of free cash in support of shareholder returns (principally, through its prevailing cash yield & deleveraging).”
Citing its “consolidated position in the Cardium, overlaid by asset synergies and operating leverage, supports a view towards strong sustainability of free cash, which continues to drive towards optimal shareholder value in a stout cash yield (10 per cent) and direct accretion of deleveraging,” Mr. Payne initiated coverage with an “outperform” recommendation.
In a research report released Monday titled The Cardium Play, the analyst argued the company’s “value to date has been significantly supported by its refined development parameters”, which he thinks have “proven the ability to positively unlock the strength of the underlying reservoir characteristics on a low-capital efficiency basis.”
“To that end, the company recently noted second quarter production trending about 5 per cent ahead of internal forecasts, with 3 times sequential oil growth, which was driven by outperformance of asset performance and integration, including the strength of recent well results (exceeding type-curve by more than 2 times),” said Mr. Payne. “The application of its development aptitudes (with synergies across superior reservoir characteristics and regional infrastructure) should compound acquired and existing asset exposures to support overall operating leverage in support of long-term value.
“Again, and indicative of the strength of performance therein, current production sits in the range of 19.4 mboe/d (with no new wells being brought on stream since March), and it expects to achieve the high end of production guidance within the low end of its capital budget (indicative of those tailwinds to sustainability). With that, we see the company’s production maintained (18.8 mboe/d) within a less than 70-per-cent payout ratio, to imply a more than 25-per-cent annualized FCF yield with net debt and leverage trending towards $131-million and 0.7 times D/CF, respectively. Excess FCF should continue to be directed towards its prevailing cash dividend ($1.08 per share annualized; 10-per-cent cash yield) under a 15-20-per-cent payout ratio (in line with peers)”
Seeing an “opportunity for compounding upside on the order of at least 50 per cent,” he set a target of $16 per share. The average target on the Street is $14.60.
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After incorporating its proposed US$2.2-billion acquisition of HanesBrands Inc. into his financial model, TD Cowen analyst Brian Morrison sees Gildan Activewear Inc. (GIL-N, GIL-T) displaying an “attractive” growth-at-a-reasonable-price (GARP) profile, believing the deal could prove to be a share price catalyst if earnings per share gains accelerate.
"Gildan’s cost structure advantage/in-place capacity positions it to gain share in the activewear segment (fleece/ringspun/national accounts), expand its margin profile, and generate strong FCF, we believe,“ he said. ”The HBI acquisition should elevate Gildan to a leader in both the wholesale and retail channels due to HBI’s brand strength and similar product portfolio. In combination, this should support top line growth for HBI’s activewear portfolio in the retail channel as it leverages Gildan’s innovation/cost structure. Along with material synergy opportunities, a lower HBI cost of debt, and strong FCF, this should heighten Gildan’s growth outlook, resulting in upward revisions to consensus/expansion of its applied multiple."
In a note released before the bell, Mr. Morrison predicted increases to the company’s financial revisions by the Street with Gildan’s multiple “gravitating to its average.”
“Gildan’s initial push (mid-2015) into the branded retail industry stalled as required advertising expenses to drive loyalty mitigated its cost structure advantage,” he added. “We believe its updated retail channel focus on private label, acquiring the industry leader in branded penetration, and applying its industry leading cost structure is a much improved recipe for success. This should vastly improve HBI’s growth/earnings profile while further benefiting from asset optimization of the combined entity. We believe strong FCF and asset sales could restart an active NCIB in early 2027.
“Catalysts & Milestones To Watch Key catalysts include Gildan achieving its 2025 financial targets, successful integration of HBI/realized synergies, asset sales, improved terms of HBI’s debt, and early illustration of share gains/cost efficiencies supporting its 20-per-cent EPS growth target.”
Reaffirming Gildan as one of the firm’s “Canada Best Ideas” and his “buy” rating, Mr. Morrison hiked his target for its U.S.-listed shares to US$67 from US$60. The average is currently US$66.86.
"We believe that Gildan’s financial performance continues to illustrate the material advantages of its focus on an industry-leading cost structure, which we maintain should lead to market share gains in what we view as a ‘commodity-like’ industry,“ he said. ”We believe Hanes reflects a strong vertical integration opportunity into the Retail channel (that is 50 per cent of the global apparel industry) and should position Gildan as a global leader in apparel basics. We have updated our financial forecast for 2026 that incorporates its acquisition of HBI, which is expected to close before Q1/26."
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Seeing “strong execution all around” in its third-quarter financial results, RBC Dominion Securities analyst Drew McReynolds thinks Transcontinental Inc. (TCL.A-T) possesses a financial, risk and capital return profile that “remains compelling.”
"Transcontinental is successfully transitioning from legacy commercial printing to packaging and retail services with a return to underlying EBITDA growth in F2024 bolstered by cost efficiencies," he said in a client note. “With the stock trading at 5.3 times FTM [forward 12-month] EV/EBITDA versus an average of 7.5 times for packaging peers (each 0.5 times increase in multiple equates to $2.50/share), we continue to see value in the shares, particularly given significant FCF generation ($2.50/share), management’s track record of solid execution, the strong balance sheet (net debt/EBITDA of 1.6 times in F2025E) and healthy capital returns (dividends, share repurchases).”
While its shares suffered a narrow decline on Friday, falling 0.4 per cent, following the release of its quarterly report, which exceeded the analyst’s forecast, Mr. McReynolds emphasized the Montreal-based company remains “confident” in its full-year forecast, and he thinks its “strong execution points to continued momentum in fiscal 2026.”
“Looking into F2026 and beyond: (i) Packaging should continue to benefit from innovation with management reiterating sufficient capacity and an easing capex intensity profile that should translate to segment FCF growth; (ii) Retail Services and Printing should benefit from the $60-million annualized revenue contribution from recent ISM tuck-in M&A (and likely additional ISM M&A in Canada) and related revenue and cost synergies, offset by a stable mid-single year-over-year decline in flyer volumes and lower book printing revenue that benefited from an outsourcing contract in F2025; (iii) management expects previously-announced non-core real estate sales could finally be consummated in early F2026; (iv) management is targeting 10-per-cent annual adjusted EPS growth; and (v) while M&A remains the FCF priority, management indicated that the resumption of an NCIB is a possibility in F2026,” he explained.
“Following a modest increase in the margin trajectory and increase in target multiple for Retail Services and Printing to reflect what we believe is improving revenue visibility/mix,” Mr. McReynolds bumped his price target for Transcontinental shares from $25 to $26, maintaining an “outperform” rating. The average is $24.61.
Elsewhere, TD Cowen’s Sean Steuart moved his target to $27 from $26 with a “buy” rating and reaffirmed its spot on the firm’s “Canada Best Ideas” list.
“Our TCL Buy rating is supported by a robust underlying FCF base and a history of value-accretive capital deployment, including returns to shareholders, debt reduction, consistent capex, and opportunistic M&A,” he said. “Our FCF yield estimates for TCL (2025E = 13 per cent; 2026E = 16 per cent) are the highest in our coverage universe. In our view, the company’s valuation discount is excessive given a compelling growth path.”
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National Bank Financial analyst Don DeMarco sees the ramp-up in operations at Aris Mining Corp.’s (ARIS-T) Segovia operations in Colombia as “running hot.”
On Friday, the Vancouver-based company released an update on the progress of the underground mine following commissioning of a second mill in June with an increase in processing capacity to 3,000 tons per day (from 2,000 tpd). It also provided early results for the third-quarter which show in-line production at increasing milling rates.
“Early results show strong throughput, grade and production performance in July/Aug. lending de-risking with readthrough to an uptick in FCF,” said Mr. DeMarco. “Accordingly, we’ve adjusted our production estimates higher at Segovia (and Marmato), and now model FY25 consolidated production of 259k oz above the reiterated guidance midpoint of 252.5k oz (230-275k oz). Further, we adjusted our carrying values for projects and resources to reflect the ongoing strength in the gold tape. After model changes our NAVPS [net asset value per share] is up 22 per cent to $21.75 (was $17.82).”
That led him to increase his target for Aris shares to $17.50 from $12.50 with an “outperform” rating (unchanged). The average target is $16.08.
"Our thesis considers an internally funded production trajectory to approximately 500k oz/year, supported by a diversified asset portfolio, NAV accretion on deck to be unlocked by execution, strong liquidity position and discounted valuation tempered by development de-risking milestones and jurisdiction,“ he concluded. ”Trading at P/NAV of 0.70 times (LUG 2.78 times, TXG 0.77 times). Target is based on 0.80x NAVPS (was 0.70 times) to reflect the strong gold tape, operational de-risking and sector sentiment trending favourably."
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After lower-than-anticipated organic growth pushed the third-quarter results for Enghouse Systems Ltd. (ENGH-T) below the Street’s forecast, RBC Dominion Securities analyst Paul Treiber emphasized he’s "still waiting for M&A to ramp."
"The company’s restructuring ($3-million charge Q3) to align costs with revenues suggests near-term organic headwinds are permanent,“ he added. ”Despite organic challenges, Enghouse continues to generate healthy FCF and has ample cash on hand; management indicated Enghouse has a robust M&A pipeline and anticipates deploying more capital on acquisitions."
Shares of the Markham, Ont.-based enterprise software company dropped 8.3 per cent on Friday after it reported quarterly revenue fell 4 per cent year-over-year to $126-million,. missing both Mr. Treiber’s $128-million projection and the consensus estimate of $130-million. It was the fourth consecutive quarter of revenue below expectations, which he attributed to “negative organic growth and a slower pace of M&A.” That led EBITDA to fall 15 per cent to $32-million, falling below the $34-million consensus.
“Headwinds to organic growth remain similar to the last several quarters and include macro delaying new deals, post-acquisition normalization at Lifesize, and Enghouse’s ongoing premise to cloud transition. Customer churn is not being offset by new bookings,” said Mr. Treiber. “Enghouse’s $3-million restructuring implies a lower sustained revenue run-rate. Additionally, Enghouse’s focus on ‘deal quality and customer creditworthiness’ implies a challenging environment.
“An increase in capital deployment is needed. Despite $115-million TTM [trailing 12-month] FCF and $259-million net cash, Enghouse has only deployed $33-million TTM on 3 acquisitions (the last one being Trafi in April). Additionally, Enghouse has only repurchased $11-million shares TTM. Management indicated the company has a robust M&A pipeline and anticipates an increased pace of acquisitions going forward. We believe that Enghouse deploying more capital on acquisitions or share buybacks could act as catalysts for the stock. We estimate every $100-million deployed on acquisitions to be 17-per-cent accretive to annual adj. EPS.”
Seeing Enghouse’s current valuation “near trough levels,” Mr. Treiber cut his target for its shares to $24 from $26, keeping a “sector perform” rating. The average is currently $24.33.
“Enghouse is trading at 6.9 times NTMe [next 12-month estimated] EV/ EBITDA, 67 per cent below peers and 51 per cent below its 10-year average (14 times). Additionally, the stock is trading at a 13.2-per-cent FCF yield and 5.9-per-cent dividend yield. However, we think Enghouse’s valuation may remain discounted pending a material ramp in M&A or improved organic growth. Our updated $24.00 price target reflects our revised financial estimates and is based on 8.0 times calendar year 2026 estimated EV/EBITDA (previously 8.4 times).”
Elsewhere, CIBC’s Erin Kyle cut her target to $25 from $25.50 with a “neutral” rating.
"Enghouse reported FQ3 results that met our estimates, but fell short of consensus expectations. While the environment remains uncertain, management is focusing on what it can control, prioritizing margin preservation amid tempered revenue and a targeted restructuring at quarter-end that should improve margins going forward," said Ms. Kyle.
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In other analyst actions:
* Applauding its shift to a year-round lifestyle outerwear maker, TD Cowen’s Oliver Chen upgraded Canada Goose Holdings Inc. (GOOS-T) to “buy” from “hold” and raised his target to $25 from $22. The average is $18.75.
"Fundamentals are improving based on compelling product assortment married with captivating marketing and enhanced in-store experience,” he said.
* Scotia’s Orest Wowkodaw reduced his Teck Resources Ltd. (TECK.B-T) target to $55 from $57 with a “sector outperform” rating. The average is $58.26.
“While we await the conclusion of Teck’s Comprehensive Operations Review focused on the company’s flagship QB2 Cu mine in Chile, we have further reduced our LOM [life-of-mine] expectations for the asset given the current operating uncertainty related to the tailings management facility (TMF),“ he said. ”We believe our revised outlook likely represents a potential worst case scenario for QB2 that may prove conservative relative to impending negative guidance revisions (due by the end of October). Due to the significant ramp-up underperformance of the asset to date and the company’s very poor guidance track record, we think an overly conservative outlook is prudent at this stage. Overall, given the valuation discrepancy vs. peers despite another reduction to our estimates, we continue to believe that Teck shares are poised to rally once guidance is formally reset this fall.
“Teck shares are rated SO based on valuation, Cu growth, balance sheet strength, and an impressive share buyback.”
* Peel Hunt’s Peter Mallin-Jones raised his target for Wheaton Precious Metals Corp. (WPM-T) to $161, exceeding the $153.54 average, from $149 with a “buy” rating.