Inside the Market’s roundup of some of today’s key analyst actions
While warning valuations for Canadian bank stocks are near “peak levels” entering first-quarter 2026 earnings season, TD Cowen analyst Mario Mendonca thinks fundamentals for the sector “remain strong.”
“The ERP [equity risk premium] at 4.2 per cent is below average (6.6 per cent),” he explained. “A low ERP given the uncertainty with the direction of Canada’s economy supports a cautious outlook on the sector. However, fundamentals remain strong and until that changes, we believe elevated multiples can be sustained. While the banks are not directly connected to the tech sector, a shift from tech to value stocks should support the P&C names and life insurers over the banks. Recent performance and relative valuation support this call.”
In a client report released before the bell, Mr. Mendonca emphasized valuations remain “stretched,” but he thinks most investors will not be concerned as long as fundamentals continue to flourish.
“Canada’s large cap banks have outperformed the life companies and U.S. money centers by approximately two to one over the last 6 to 12 months,” he said. “We attribute this to weak performance from Sun Life (SLF-T Buy; TP $104.00; $88.99) which is up 5 per cent and 6 per cent over the last 6 and 12 months, respectively. As discussed in our Life Insurance preview note, we expect SLF to narrow the performance and valuation gap in 2026. The big question for SLF heading into Q4/25 reporting season is did the company build sufficient reserves in the U.S. stop loss business in Q3/25. A good comparable in the stop loss space, VOYA (not rated), was down sharply after reporting a US$37-million reserve build in Q4/25.
“We also find it notable that over the last six months, Canada’s banks have materially outperformed the U.S. banks (money centers and regionals). In the context of a strong H2/26 showing from the U.S. banks, a weaker economic outlook for Canada and the uncertainty associated with negotiating USMCA, the Canadian banks’ outperformance is surprising ... Canadian bank fundamentals proved to be very resilient in 2025 and we expect results to remain strong heading into 2026.”
For the quarter, Mr. Mendonca expects “good” pre-tax, pre-provision growth, “supported by net interest income growth (year-over-year NIM gains remain good, but quarter-over-quarter is stable), strong fee income (WM particularly) & positive operating leverage.”
“Other than lumpy credit results in commercial and weaker consumer credit we expect credit to be stable,” he added. “Strong fundamentals (NIM, fees, capital markets, buybacks) continue to support elevated multiples.”
“At 6.8 per cent, EPS growth is expected to be in line with the long-term average (7 per cent). Our EPS estimates for CM & NA are 3-4 per cent above consensus and in line for BNS & RY. For BMO our estimates are 5 per cent below cons., however, we expect BMO consensus to drop as revised estimates are published and others incorporate the $200-million restructuring charge and higher seasonal severance costs into their forecasts.”
Mr. Mendonca adjusted his target prices for stocks in the sector. They are:
- Bank of Montreal (BMO-T, “buy”) to $219 from $209. The average target on the Street is $188.60, according to LSEG data.
- Bank of Nova Scotia (BNS-T, “buy”) to $112 from $104. Average: $100.88.
- Canadian Imperial Bank of Commerce (CM-T, “buy”) to $142 from $134. Average: $129.22.
- National Bank of Canada (NA-T, “hold”) to $175 from $181. Average: $169.90.
- Royal Bank of Canada (RY-T, “buy”) to $260 from $246. Average: $234.41.
"“Our top picks are BMO & RY. Among our coverage, we favour those with large capital markets operations in the U.S. (BMO, RY); greater exposure to U.S. lending (BMO) and a strong ROE progression story (BMO, potentially CM)," he said.
Desjardins Securities analyst Doug Young expects Canadian banks to report a 7-per-cent year-over-year increase in cash earnings per share and adjusted pre-tax, pre-provisions earnings on average for the first quarter of 2026, bolstered by “strong” wealth management results and a “solid” capital markets performance while acknowledging the group faces a tough comp versus 2025.
"We declare open the first quarter 2026 bank results! Yes, the theme this quarter is the Olympics," he said. “The banks have been training hard.
“Five themes we’ll be watching: (1) Any change in the management teams’ outlook or mood? (2) We expect cash EPS and adjusted pre-tax pre-provision (PTPP) earnings growth to be bolstered by strong wealth results. That said, the capital markets divisions could thrill to the upside with a podium finish. (3) We expect on average a slight increase in total PCL rates sequentially. Will anyone default in agony? We are not expecting any material surprises. (4) Any new views on the risks with CUSMA? If we could only settle this on the ice! (5) If the banks can achieve stated ROE targets sooner than expected, estimates need to go higher. Let the games begin.“
In a client report released before the bell titled Citius, Altius, Fortius, Mr. Young updated his targets for stocks in the sector, while he maintained his pecking order of preference. It is:
- Canadian Imperial Bank of Commerce (CM-T, “buy”) with a $139 target, up from $135. The average target on the Street is $129.22.
- Toronto-Dominion Bank (TD-T, “buy”) with a $139 target, up from $133. Average: $128.
- Royal Bank of Canada (RY-T, “buy”) with a $247 target, up from $240. Average: $234.41.
- National Bank of Canada (NA-T, “buy”) with a $182 target, up from $180. Average: $169.90.
- EQB Inc. (EQB-T, “buy”) with a $125 target, up from $110. Average: $104.86.
- Bank of Nova Scotia (BNS-T, “hold”) with a $106 target, up from $104. Average: $100.88.
- Bank of Montreal (BMO-T, “hold”) with a $195 target, up from $189. Average: $188.60.
- Laurentian Bank of Canada (LB-T, “tender”) with a $40.50 target (unchanged). Average: $40.38.
"Canadian bank stock prices increased by 9 per cent on average during 1Q FY26, outperforming the S&P/TSX, and both Canadian and U.S. lifecos, while underperforming the U.S. banks,“ said Mr. Young. ”LB was the best-performing Canadian bank (up 20 per cent) while NA underperformed (up 4 per cent).
“The Big 6 Canadian banks trade slightly above their 20-year historical average P/BV multiples. Since 4Q FY25, the average P/BV multiple of the Big 6 increased by 7 per cent.”
RBC Dominion Securities analyst Michael Harvey applauds Arc Resources Ltd.’s (ARX-T) decision to withdraw its asset-level guidance for the Attachie project in northeastern British Columbia due recent underperformance, saying a “pause is warranted” and will “likely results in a period of sideways trading as investor confidence will need to be rebuilt.”
Shares of Calgary-based Arc fell 10.1 per cent on Friday after its guidance for Attachie was pulled due to early production results from the most recent Upper Montney pads at the $740-million facility, which were brought on stream in late 2025 and early 2026, being deemed “variable and below expectations.” The company is now in the process of adjusting its development schedule to further evaluate performance and determine an appropriate plan.
Mr. Harvey said that move overshadowed “solid” 2025 fourth-quarter financial results, including production of 408,382 barrels of oil equivalent per day, which topped both the analyst’s 391,050-barrel estimate and the Street’s expectation of 389,267 boe/d. Cash flow per share of $1.52 was also above projections ($1.41 and $1.36, respectively).
“Guidance for 2026 was unchanged, with $1.8-$1.9-billion intended to drive volumes of 412,500 boe/d (39-per-cent liquids), said Mr. Harvey. “Flexibility is embedded within the budget to recalibrate capital intensity depending on how commodity prices evolve over the year. Guidance for Attachie (previously 30-35 mboe/d) was pulled as results fell below expectations (Attachie produced 28,000 boe/d in Q4/25).
“We update our estimates to reflect changes to marketing and hedging, with CFPS in 2026 declining 4 per cent, but remaining relatively flat in 2027. Our production estimates remain largely unchanged.”
Keeping an “outperform” rating, the analyst dropped his target to $28 from $32. The average on the Street is $28.85.
“We like ARC due to its high-quality assets, strong management, and valuation, which we see as having room for multiple expansion,” he said.
Elsewhere, “taking a breather,” Raymond James analyst Luke Davis downgraded Arc to “market perform” from “outperform” with a $28 target, down from $31.
“ARC’s 4Q print was punctuated by a headline beat (on moderated consensus figures) and a reserve book that was better than feared, but likely featuring negative technical revisions at Attachie (asset detail not disclosed). In our view, the company’s approach to disciplined capital allocation and cost reduction is a theme with durability, though we recognize management needs to restore investor confidence as execution and messaging around Attachie has missed the mark. Given the importance of the project on the growth and development profile, we’re looking for concrete next steps to reset the stage but recognize the sheer size and scale justifies some tolerance for variability. Despite investors discounting the asset today, which is likely warranted, we ultimately expect operational issues will be resolved and believe the current entry point remains compelling for those with a long-term view but move to a Market Perform, awaiting more clarity,” said Mr. Davis.
CIBC’s Jamie Kubik moved Arc to “neutral” from “outperformer” with a $25.50 target, down from $27.50.
“We have fine-tuned our model following a deeper review of ARX’s Q4/25 financial disclosures. While there was potential for ARC’s recent pads to restore confidence in Attachie, we believe the company’s guidance revision indicates further uncertainty ahead for this asset. We maintain our view that there are better days ahead for Attachie, but we do believe a demonstration of stable performance from the asset will be required for investors to have confidence in Phase 1 and potential for Phase 2 execution. We have therefore removed capital spending from our 2027 outlook for the Attachie Phase 2 project. While we are intrigued at the strong performance from Kakwa during Q4, we do expect the shares could remain range-bound in the near term. We move our production estimates towards the lower end of company guidance, and as a result our cash flow revisions are negative for 2026 and 2027,” said Mr. Kubik.
Meanwhile, other target revisions include:
* BMO’s Randy Ollenberger to $28 from $33 with an “outperform” rating.
“In our view, the decision to withdraw Attachie-specific guidance underscores a more disciplined approach to forward expectations following past missteps,” said Mr. Ollenberger.
* Desjardins Securities’ Chris MacCulloch to $27 from $31 with a “buy” rating.
“We are slashing our target on ARC ... reflecting negative revisions to our estimates following last week’s disappointing update from Attachie, where recent well performance fell short of expectations. Although we remain optimistic that further refinements in well design will drive improved production rates, particularly with respect to casing, we recognize that management faces considerable challenges in rebuilding investor confidence for an asset critical to the company’s long-term growth outlook,” said Mr. MacCulloch.
National Bank Financial analyst Vishal Shreedhar is “remaining constructive” on Saputo Inc. (SAP-T) after its third-quarter 2026 financial results showed “strong” year-over-year EBITDA growth across all of its business segments.
On Thursday after the bell, the Montreal-based dairy giant reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $492-million, up from $417-million during the same period a year ago and above both the analyst’s $472-million estimate and the consensus projection of $480-million. While revenue was narrowly lower than anticipated, earnings per share of 57 topped expectations (53 cent and 54 cents) and blew past the 39-cent result on fiscal 2025 as the company’s EBITDA margin rate was the highest since the third quarter of 2021.
“U.S. improvements reflect benefits from investments and network optimization,” he said. “We believe upside remains (full benefits of removed duplicate cost NTM [next 12 months], warehousing consolidation, etc.); NBCM models USA F2027 EBITDA margin of 8.2 per cent (long-term target of high single to double digits).
“Canada was solid (similar factors to prior quarter). SAP expressed optimism for Australia (strong demand/price recovery) and Argentina (favourable milk supply). International recovery is gaining traction, albeit NBCM remains cautious on longer-term opportunity (EBITDA growth year-over-year of 49 per cent in F2026 vs. 5 per cent in F2027). Europe investments are largely complete (focus on benefit extraction). SAP’s target of mid-teen EBITDA margin suggests upside remains (NBCM falls short at 10 per cent over our forecast horizon).”
With the results, Mr. Shreedhar raised his earnings per share projections for fiscal 2026 to $2.01 from $1.93 and 2027 to $2.31 from $2.22 to reflect lower expense expectations and higher EBITDA margins.
“Q3/F26 net debt to EBITDA of 1.76 times is supportive of share buybacks (NBCM models 5 per cent in F2027) and/or M&A (North America focus; channel/market expansion),” he said. “Our preference is for SAP to continue realizing efficiencies from its current initiatives.”
Maintaining his “outperform” rating and investment thesis for Saputo shares, Mr. Shreedhar increased his target by $1 to $46. The average on the Street is $45.43.
“We expect investor focus to be on steady execution amid a volatile commodity and macro backdrop,” he said. “SAP will benefit from a variety of initiatives/factors that will contribute to profitability more fulsomely in F2026+ (we believe these benefits are being realized), including efficiency initiatives, improved commodities backdrop and share repurchases.”
Elsewhere, other target revisions include:
* Desjardins Securities’ Chris Li to $47 from $45 with a “buy” rating.
“Despite volatile industry conditions, EBITDA growth accelerated for the third straight quarter and exceeded expectations thanks to strong execution and solid demand. While we have tempered our U.S. EBITDA growth for 4Q due to negative market factors, higher A&P and share based comp, we still expect solid total EBITDA growth of 18 per cent. With SAP’s valuation having recovered to its average of 10.5-times forward EBITDA, we expect share price appreciation to be largely driven by solid EBITDA growth of 8 per cent in FY27,” said Mr. Li.
* BMO’s Étienne Ricard to $42 from $41 with a “market perform” rating.
“Saputo continues to reap margin benefits from commercial and operational initiatives providing a new foundation for future growth,” said Mr. Ricard. “With most cost restructurings now in the rear-view mirror, focus is likely to tilt towards product innovation, volume and market share initiatives as key drivers of further profitability improvements.
“In our view, meaningful upside to the shares resides in Saputo achieving double-digit margins in the U.S., a feat last achieved in fiscal 2018, that requires volume/market share outperformance and more favorable commodity value.”
* TD Cowen’s Michael Van Aelst to $51 from $49 with a “buy” rating.
“Profit growth accelerated for third straight quarter, and we see this continuing in Q4 with EBITDA/EPS up 19 per cent/up 63 per cent. Dairy demand is growing amid the global quest to consume more protein, and Saputo’s strong execution, customer relationships and reliably high order fill rates are allowing it to gain share while exhibiting price discipline. ROI from past capital projects still have more to contribute,” said Mr. Van Aelst.
In a client note released before the bell titled Giving Investors What They Want, Citi analyst Alexander Hacking increased his forecast for Barrick Mining Corp. (B-N, ABX-T) to reflect its fourth-quarter results result, updated guidance and his firm’s gold price forecasts.
On Thursday, the Toronto-based miner confirmed it is moving forward with plans to spin out its North American assets into a new publicly listed company and also named Mark Hill as its permanent chief executive officer.
“Barrick investors had been asking for key changes and the company is endeavoring to fulfill these: 1. Recognize value for North American assets via some separation from the EM assets, 2. Reconsider Reko Diq (now under review citing ‘escalation of security risks”', 3. Set guidance more conservatively (updated 2026 guidance lower vs 2025 for every mine ex-Mali) and 4. Deliver better operational results (TBD),“ he explained.
“Barrick’s stock is pricing around $4,000/oz gold in our model or approximately 20-per-cent discount to spot. This is the lowest in our coverage. The key question for 2026 – outside of gold prices – is what value public markets and/or NEM will put on the Fourmile resource."
Mr. Hacking raised his 2026 EBITDA estimate by 31 per cent to US$15.0-billion based on higher Citi gold price forecasts (now US$4,600 per ounce versus US$4,000 previously). His 2027 projection is now US$13.5-billion.
Maintaining his “neutral” rating for Barrck shares, he also increased his target to US$48 from US$38. The current average is US$56.
“We rate Barrick Mining Neutral,“ he explained. ”Positive factors include low operating costs, a stable balance sheet, new management with a strong operating track record, and potential upside from synergies at the new Nevada JV. Negative factors include some challenging legacy assets, geopolitical risk, challenges to grow production from such a large base, and limited FCF. On balance, we see equal upside and downside at current levels."
Elsewhere, ATB Capital Markets’ Richard Gray cut his target to $94 from $100 with an “outperform” rating.
“Barrick reported Q4/25 financial results generally better than our estimates, including a beat on production, EPS, and FCF. On the other hand, guidance for 2026 missed our estimates on both production and costs. Barrick has decided to move forward with the previously discussed IPO of its North American assets (NGM, Pueblo Viejo, Fourmile), expected in late 2026. We see potential for this move to daylight value in these assets, given their high quality and Barrick’s current multiple relative to other senior producers,” said Mr. Gray.
REC Dominion Securities analyst Bart Dziarski predicts TMX Group Ltd.’s (X-T) “solid” execution “should get rewarded after time.”
“We believe operating results continue to serve as a powerful reminder of TMX’s strong business model, with double-digit revenue growth and operating leverage driving margin expansion,” he said in a client note released Monday. “The stock has continued de-rating on AI/tokenization concerns which has now reached oversold territory. TMX is trading at 19.6 times forward P/E, a discount to global exchange peers, and a premium is warranted given TMX’s fundamentally stronger business model.”
On Friday, the financial services company, which operates s the Toronto Stock Exchange and the TSX Venture Exchange for equities, and the Montreal Exchange for derivatives, reported fourth-quarter adjusted operating earnings per share of 60 cents, blowing past both Mr. Dziarski’s 51-cent forecast and the 54-cent consensus estimate. He attributed the beat to higher-than-forecast revenue from TMX’s highest operating margin segments, which drove “solid” core EBITDA margin expansion of 200 basis points year-over-year.
“AI-narrative focused on the downside, what about the upside? In our view, AI can be a positive enabler of TMX generating positive operating leverage,” he said. “In 2025, Trayport rolled out development updates while keeping headcount flat, an important win. With approximately 60 per cent of TMX’s expense base in compensation, we believe AI-related efficiencies will help TMX deliver operating leverage and margin expansion. In 2025, TMX delivered organic operating leverage of 7 per cent, with EBITDA margins expanding 100 basis points to 56.3 per cent. We estimate operating leverage of 2 per cent in 2026 & 1 per cent in 2027, driving EBITDA margins to 57.5 per cent in 2027.
“Stock is approaching oversold levels, in our view. TMX forward multiple has de-rated from 28 times to 19.6 times, below its 20.8 times 5-year historical average, and only 1.5 times higher than 5-year historical average -1 STD DEV of 18 times. TMX trades at a 2-times discount to global exchange peers. Our downside case assumes 18 times P/E and the stock is there on 2027E EPS. We believe the upside/downside skew creates an attractive entry point for investors.”
While he remains bullish on the stock’s potential, Mr. Dziarski lowered his target to $64 from $67, keeping an “outperform” rating, after reducing his target multiple to “partially reflect recent market volatility.” The average is $60.57.
“Our 25-times multiple represents a 3-times premium to global exchange peers, which we believe is warranted given TMX’s structurally better business model,” he noted.
“We believe a continued favourable mix shift towards stickier, recurring, and high growth revenue will drive a higher multiple over time. TMX currently trades at 19.6 times NTM [next 12-month] P/E, below long-term historical averages. We believe the current multiple understates the extent to which the business has been fundamentally repositioned over the last 10 years, with recurring revenue increasing from 40 per cent to 50 per cent and management targeting a continued positive mix shift towards 67 per cent over the long term. TMX has a fundamentally strong business model characterized by a dominant market share in Canada and high barriers to entry. Following a meaningful de- rating in the P/E multiple, we see significant room to grow as the successful execution of management’s strategy will improve TMX’s fundamental performance and drive a multiple re-rate to 25 times.”
Elsewhere, seeing an “opportune time to buy after [a] market overreaction,” Raymond James analyst Stephen Boland upgraded TMX to “strong buy” from “outperform” with a $61 target, up from $59.
“Overall, this was another positive quarter for TMX. Management also highlighted the IPO pipeline is the deepest it has been in many years,” said Mr. Boland. “There has been a general sell-off with technology related companies including capital markets data providers and exchanges. Multiples have moved from averages in the mid to high 20.0x to under 20.0x on a forward basis. We believe is an overreaction. We also believe this is an opportune time to purchase the TMX at this valuation. As a reminder, the company operates as a near monopoly is its core businesses with a moat around the proprietary data businesses.
“We are introducing our 2027 estimates. We are increasing our target to $61.00 from $59.00 and upgrading to a Strong Buy rating.”
Other analysts making target revisions include:
* Canaccord Genuity’s Aravinda Galappatthige to $61 from $64 with a “buy” rating.
“While AI-related concerns have put pressure on the stock of late (down 13 per cent year-to-date), led by a broad sell-off in software and analytics names, we continue to see genuine value in TMX with double-digit growth prospects in its Derivatives business as well as Global Insights. Further, its rapidly de-levering balance sheet opens up interesting M&A prospects, especially if the public markets sell-off extends to private valuations,” he said.
* Barclays’ Benjamin Budish to $52 from $59 with an “equal weight” rating.
While Acumen Capital analyst Trevor Reynolds thinks the outlook for Information Services Corp. (ISC-T) “remains positive,” he lowered his rating for its shares to “speculative buy” from “buy” due to the uncertainty around its ongoing strategic review and a “ramp in valuation since the process was announced.”
“Notably, the Strategic Review process remains ongoing with no updates expected until a decision is made by the Board,” he said. “Management cautioned in the release that there is no assurance that the Strategic Review will result in a transaction, or the timing of a transaction if it is undertaken. As a reminder ISC announced a review of strategic alternatives early September 2025 to identify opportunities to maximize value for all shareholders.”
On Feb. 4, the Regina-based provider of registry and information management services for public data and records released its initial 2026 guidance for revenue ($273-million to $283-million) and adjusted EBITDA ($100-million to $107-million) versus the analyst’s projections of $268-million and $102-million, respectively. It also said its expects 2025 results to feature revenue at the low end of its range ($257-million to $267-million) and adjusted EBITDA exceeding the top end of its expectation ($89-million to $97-million) by about 5 per cent.
Mr. Reynolds raised his Street-high target for ISC shares to $48.50 from $40. The average is $35.
In other analyst actions:
* In response to weaker-than-anticipated full-year 2026 guidance, BofA Securities’ Guilherme Rosito downgraded Ero Copper Corp. (ERO-T) to “neutral” from “buy” previously with a $45 target, down from $49. The average target on the Street is $46.01.
* TD Cowen’s Wayne Lam initiated coverage of AbraSilver Resources Corp. (ABRA-T) with a “buy” rating and $16 target. The average target is $13.50.
“In our view, ABRA is well-positioned advancing the Diablillos project in Argentina, which represents one of the largest advanced-stage primary silver projects globally. We anticipate several key derisking milestones, including EIA permitting, RIGI [Argentina’s Large Investment Incentive Regime] approval, and resource update/DFS ahead of a construction decision later this year,” he said.
* Mr. Lam also initiated coverage of Americas Gold and Silver Corp. (USA-T) with a “buy” rating and $13 target, exceeding the $9.84 average.
“In our view, USA is backed by a proven team employing a familiar, successful playbook, ramping up silver production via operational improvements at the Galena Complex in Idaho. We also see substantial upside as the largest producer of antimony in the U.S with significant re-rating potential as Galena ramps up,” he said.
* Ahead of the release of its fourth-quarter 2025 results on Tuesday, Canaccord Genuity’s Yuri Lunk raised his Finning International Inc. (FTT-T) target to a high on the Street of $100 from $90 with a “buy” rating. The average is $88.67.
“The company is enjoying several secular tailwinds such as electrification’s positive impact on copper demand, the data centre build-out, and infrastructure renewal and replacement,” said Mr. Lynk. “These activities drive a virtuous circle of equipment sales that, in turn, require parts and service, which come at very nice margins. With a near record backlog and upside still afforded by continued data centre investment, a recovery in construction markets in W. Canada, longer-term mining opportunities in Argentina, a management team delivering the operating leverage that was sorely lacking in past upcycles, and a discounted valuation, Finning continues to afford investors good upside potential.”
* Previewing Wednesday’s release of its fourth-quarter results , BMO’s Thanos Moschopoulos reduced his Shopify Inc. (SHOP-Q, SHOP-T) target to US$150 from US$190 with an “outperform” rating.
“We expect a solid quarter, driven by sustained market share gains against U.S. holiday ecommerce sales that modestly exceeded expectations,” he said. “Looking past the quarter, we expect the growth vectors that SHOP capitalized on in FY2025 to persist in FY2026 — supplemented by growing interest from brands/retailers in agentic commerce, which we view as a competitive differentiator for SHOP given the leadership it’s demonstrated in this area.
“We’ve reduced our target price, reflecting the recent de-rating across the software sector.