Inside the Market’s roundup of some of today’s key analyst actions
Citing “elevated valuations and geopolitical uncertainty,” Canaccord Genuity analyst Matthew Lee now prefers Canadian banks with “the clearest pathways to multiple years of above-industry level earnings growth.”
“The banks delivered strong Q1 results, with aggregate EPS of $18.06 representing a 10.5-per-cent beat,” he said. “While nearly every metric looked solid (Figure 9), management teams consistently cautioned that early results may not be indicative of a F26 run rate. Apart from NA, which raised its F26 ROE guidance, the group largely maintained its outlook on earnings growth, which we view as conservative given strong revenue trends and improving operating leverage.
“Post-quarter, we have raised our estimates for trading and C&IB as early indicators suggest that Q2 may share many of the same characteristics as Q1 (M&A pipelines, equity market volatility, heightened investor activity). We have also raised our NIM expectations, which is benefitting from a combination of low loan growth and product mix. Offsetting this, we now take a more conservative stance on credit, assume a further rise in provisions in Q2 and a more modest decline in the second half of the year.”
In a client report released before the bell titled Looking for clear growth stories in a choppy macro environment, Mr. Lee said geopolitical tension “gives us pause on credit” while loan “softness” is likely to lead to continued net interest margin expansion.
“Since the quarter was reported, tensions in the Middle East have escalated significantly,” he said. “While there could be some economic tailwinds for oil-related Canadian industries, our concerns revolve around the impact of higher inflation and rate cuts delays (or rate increases) on credit. In our view, higher rates and inflation are likely to add pressure to the consumer, which already feels like a weakening spot in the portfolio. We note that although the Big-6 are well provisioned, economic uncertainty could drive performing builds in Q2.”
“We saw strong NIM across the board in Q1 with nearly every bank overdelivering. While the beat was partially related to tractors, we also believe the low growth environment has been a sizeable tailwind buttressed by stabilizing deposit betas. In particular, weakness in Canadian mortgage originations appears to be limiting the impact of competitive pressure while expediting the shift in mix to the higher NIM cards book, which continues to grow at 2 per cent. We expect that until loan growth picks up, NIMs will continue to trend upwards.”
Mr. Lee made one rating change, downgraded Bank of Nova Scotia (BNS-T) to “hold” from “buy” with a $110 target, down from $118. The average target on the Street is $112.50, according to LSEG data.
“Last summer, we saw a significant opportunity for a BNS re-rate with the bank trading at a 2.0 times P/E discount to the group, far below its historical range,” he explained. “Thanks to improving execution and a shift in perception around LATAM, this gap has largely closed with the bank now just 1.1 times below the industry average. In our view, BNS still has areas to address in the Canadian P&C bank and Wealth Management, where it has generally lagged the group. While we previously believed that BNS would close the P/E gap to 5 per cent, given the firm’s relatively modest ROE expectations, we now expect the discount to remain unchanged at approximately 10 per cent.”
He also made these target adjustments:
- National Bank of Canada (NA-T, “hold”) to $190 from $191. Average: $191.09.
- Toronto-Dominion Bank (TD-T, “buy”) to $149 from $147. Average: $147.92.
His other targets are:
- Bank of Montreal (BMO-T, “buy”) at $224. Average: $209.64.
- Canadian Imperial Bank of Commerce (CM-T, “hold”) at $145. Average: $150.69.
- Royal Bank of Canada (RY-T, “buy”) at $260. Average: $253.
National Bank Financial analyst Baltej Sidhu sees Algonquin Power & Utilities Corp.’s (AQN-N, AQN-T) as “a turnaround story” with its 2025 results reflecting “execution of its self-help plan.”
However, its “evident” operational progress is being overshadowed by its guidance, weighing on investor sentiment.
On Friday, the Oakville, Ont.-based company’s TSX-listed shares dropped 11.6 per cent after it reduced its fiscal 2027 earnings per share guidance by 4 US cents to 44 US cents driven primarily by higher tax assumptions. That came despite fourth-quarter 2025 EPS of 34 cents, which came in above the high end of guidance of 30-32 cents.
“While some pullback is understandable, the underlying fundamentals and earnings trajectory continue to improve, with upcoming rate case outcomes expected to provide incremental support and reinforce forward visibility,” said Mr. Sidhu. “Earned ROE improved 130 basis points year-over-year to 6.8 per cemt, reinforcing visibility toward management’s 8.5-per-cent target (but 70 bps/$0.04/share underperformance to allowed ROE 9.2 per cent), translating to $70-80-million (approximately $0.10/sh) of incremental earnings power. For context, each 50 bps move in earned ROE translates to $0.03/sh of EPS.”
Mr. Sidhu now sees an increased chance for Algonquin to redomicile following the guidance revision and commentary around higher post-2026 tax assumptions, “reflecting the roll-off of tax shields and other credits.”
“Addressing tax leakage could provide an offset to the $0.03/sh drop in guidance,” he said. “The company is currently assessing the rationale of a redomicile to the U.S., and should AQN pursue the change, we see that it will likely be framed as a multi-step process (vs. 1-step redomicile), with the first step seeing a move in its headquarters. AQN could also look at balance sheet optimization by recapitalizing debt into its Liberty Utilities structure.”
“Strengthened balance sheet supporting self-funded growth. AQN paid down $1.6-billion of debt in 2025, lifting its FFO-to-debt to 12.8 per cent from 10.4 per cent in 2024 (13-15-per-cent target). The improved leverage profile enhances financial flexibility and positions AQN to internally fund 65-70 per cent of its $3.2 bln 26E-28E capex program, while maintaining IG credit rating, and no expected equity issuance through 27E.”
Maintaining his “outperform” rating for Algonquin shares, Mr. Sidhu trimmed his target to US$7.25 from US$7.50. The average target on the Street is US$7.12.
“While near-term sentiment could remain fragile, we see improving fundamentals, identifiable earnings levers, and valuation support,” he added.
Elsewhere, Raymond James’ Theo Genzebu raised Algonquin to an “outperform” rating from “market perform” with a US$7.25 target, up from US$6.50.
“We believe Algonquin’s operational and regulatory execution continues to improve. With shares down 12 per cent (vs S&P/TSX down 1.6 per cent) following the revision of 2027 EPS guidance, we see the pullback as overdone. We view the guidance reset as non-operational in nature and not indicative of underlying business deterioration. With cost discipline taking hold, customer‑service performance stabilizing, and continued constructive outcomes across key rate cases, we believe AQN remains well on its way to strengthening its core regulated utility business. Given the combination of improving earnings visibility, operational execution, and regulatory momentum, we are upgrading AQN,” said Mr. Genzebu.
Meanwhile, Desjardins Securities’ Brent Stadler reduced his target to US$7 from US$7.25 with a “buy” rating.
“A higher expected tax rate in 2027 dominated the narrative in a promising quarter that showed the turnaround story is coming together,” said Mr. Stadler. “It was the fourth consecutive meet-or-beat quarter, 2025 guidance was conservative, earned ROE improved by 130 basis points while O&M as a percentage of revenue continued to decline, highlighting improving fundamentals as AQN works toward becoming a premium utility.”
RBC Dominion Securities analyst Matthew McKellar removed his “speculative risk” qualifier for his “sector perform” recommendation for Canfor Pulp Products Inc. (CFX-T) following last week’s approval by shareholders of its acquisition by majority owner Canfor Corp. (CFP-T).
“Management had noted the ongoing weakness in pulp markets coupled with the write-down and impairment charge taken in Q425 made it ‘highly probable’ that Canfor Pulp would breach its financial covenants in Q126 without a successful transaction with Canfor Corp,” said Mr. McKellar. “Canfor Pulp management stated that regardless of ownership structure, it continues to review its underlying business to mitigate financial losses.
“Pulp prices under pressure despite marginal improvement in February; markets remain oversupplied. According to RISI, NBSK [northern bleached softwood kraft] list prices increased $30/tonne m/m in February to $1,565/tonne, although prices are down $180/tonne from February 2025 levels. With NBSK prices in China at a discount to U.S. spot pricing, we would continue to expect pressure on U.S. pulp prices as producers look to redirect excess supply to U.S. markets given the premium. Management noted current inventory levels are elevated, and it expects pulp market conditions to remain weak into 2026 as global trade uncertainty weighs on market demand. On its outlook for paper, management expects demand (globally and within North America) to remain subdued through H126 as a result of ongoing trade uncertainty and overcapacity, with stable demand.”
He raised his target for Canfor Pulp shares to 60 cents from 50 cents, which is the current average, to reflect the exchange ratio of the Canfor Corp. transaction.
“Canfor Pulp is well positioned to meet Chinese demand for softwood pulp given its mills in Western Canada, although we expect BC to be a tricky operating environment for some time. We think there will be a relative scarcity of softwood pulp compared to hardwood pulp, although some ability to substitute between the two products will likely limit the spread in pricing to some degree,” he added.
National Bank Financial analyst Maxim Sytchev thinks there’s “no need to overthink” on the investment potential for Aecon Group Inc. (ARE-T) after “strong” results.
He raised his valuation multiple for the Toronto-based construction company in response to last week’s stronger-than-anticipate financial release and an increase to its quarterly dividend (19.25 cents per share from 19 cents per share previously), citing “improved two‑year visibility, underpinned by record backlog growth that now largely consists of de‑risked work with a stable margin profile, and expectations for continued backlog expansion in Nuclear>”
“Sometimes valuation matters; sometimes it does not,” said Mr. Sytchev. “We believe we are firmly in the latter regime. U.S. construction peers are currently trading at a material premium - approximately 50-per-cent higher EV/EBITDA multiples than ARE - despite ARE’s increasingly differentiated exposure. Roughly 1/3 of revenue is now nuclear‑related, a segment benefiting from significant project flows.
“In parallel, the growing narrative that ‘construction is safe from AI’ continues to drive sector rotation toward names positioned to benefit from the AI‑driven power and infrastructure buildout. Backlog is up +61% year‑over‑year, and ARE is likely to participate meaningfully in further ON nuclear development regardless of final technology selection (though we would be surprised if it were anything other than CANDU). Against this backdrop, we encourage investors to do nothing - and remain long. We were highly tactical on the name through the volatility of 2022 - 2024. However, as visibility improves and the investment thesis becomes increasingly thematically skewed to the upside, traditional long‑term relative or absolute valuation frameworks become less useful. In this environment, the opportunity cost of non‑participation risks outweighing concerns around near‑term valuation, particularly as EPS growth is expected to outpace the valuation inflection.”
Aecon shares soared 7.5 per cent on Friday after it reported revenue for the fourth quarter of fiscal 2025 of $1.541-billion, up 22 per cent year-over-year and well above the estimates of the analyst ($1.357-billion) and the Street ($1.399-billion) driven by “higher Nuclear operations revenue in the Construction segment (up $142-million year-over-year) as refurb/new build work in Ontario and the U.S. continued to ramp up. Adjusted earnings per share of 52 cents also blew past projections (35 cents and 32 cents, respectively).
“Management estimates that about 55 per cent of revenues are now derived from the power sector, with Nuclear (29 per cent) and Utilities (19 per cent) accounting for close to half of the company’s LTM [last 12-month] Construction revenues,” he said. “The nuclear renaissance continues in full force, and ARE’s capability to service all technologies opens up a broad revenue opportunity set, further lengthening the already impressive growth runway in this sector (confirmation of a new build in ON would be a major catalyst for shares). Utilities’ CapEx is also strong, and we expect further growth beyond 2025’s $1.026-billion in revenues for the business (74 per cent of which is recurring). All-in, management expects 2026E topline growth to outpace the low-to-mid single-digit growth rate for the broader industry in Canada, enabled by a near-record backlog and strong end-market demand across all core verticals.
“Defence opportunities are emerging, though project selection remains highly disciplined. Defence spending is quickly ramping up in Canada, providing ample opportunities for work on both military and dual-use infrastructure across the country (and especially in the Arctic). Management is very bullish on the space where ARE has historically had little exposure, and we expect additional awards over the next number of years following the March 4th announcement of the Arctic Over-the-Horizon Radar Program contract (a 50/50 JV with Pomerleau; STN is the engineering partner). That said, management remains very selective in the projects it takes on to maintain a high standard of expected risk-adjusted returns.”
Also seeing run-rate margins as “sustainable and far less risky,” Mr. Sytchev reiterated his “outperform” rating for Aecon shares while raising his target to $45 from $35. The average on the Street is $35.85.
Elsewhere, others making changes include:
* Canaccord Genuity’s Yuri Lynk to $52 from $40 with a “buy” rating.
“Aecon’s business has been flipped on its head over the last five years, yet its valuation multiple hasn’t kept pace. Lower risk, collaborative contracts as well as cost plus/unit price now dominate the revenue stream at 73 per cent vs. 38 per cent in 2020. Its nuclear business, where the barrier to entry is extremely high, is 29 per cent of revenue vs. 10 per cent in 2020. Its backlog is $11 billion vs. $6.5 billion in 2020. Its recurring revenue is nearly double 2020 levels despite some divestitures. With the legacy LSTK contracts down to de minimis levels of revenue (less than 5 per cent) and backlog (less than 1 per cent), we expect to finally see the benefits of Aecon’s improved fundamentals reflected in its financials through consistent and predictable FCF generation. We believe this should drive a multiple re-rating as nuclear and utility peers garner double-digit EBITDA multiples while Aecon trades at just 8.8 times EV/EBITDA (2026E), the third-lowest multiple among North American construction, utility, and nuclear peers,” said Mr. Lynk.
* Stifel’s Ian Gillies to $38.75 from $34.25 with a “hold” rating.
“Thematics continue to overwhelm fundamentals, as Aecon benefits from investor interest in nuclear development and Canadian government spending. The company is clearly on the mend from weak performance in the 2021-2025 period when EBITDA averaged $184-million, compared to our 2026 and 2027 forecasts of $343-million and $394-million, respectively. With that said, we believe a lot of this growth is priced in with the stock at 20.7 times P/E,” said Mr. Gillies.
* ATB Cormark Capital Markets’ Chris Murray to $39 from $35 with a “sector perform” rating.
“Aecon delivered a strong quarter with better-than-expected top-line growth and underlying margin profile in Construction combined with minimal legacy-based project losses contributing to the positive variance versus ATBe. While we remain constructive on ARE’s outlook and expect conversion of the higher-quality backlog to support top-line growth and an increasingly predictable margin profile, valuations have moved notably above the company’s typical 6.2 times range to now 9.0 times 2026, limiting the near-term upside and keeping us cautious on shares,” said Mr. Murray.
In a separate report, Mr. Sytchev argued Badger Infrastructure Solutions Ltd. (BDGI-T) “continues to deliver on its (very impressive) growth targets, continuing to gain market share in a strong spending backdrop with multi-year visibility and expanding into adjacencies to diversify the company’s revenue base.”
“This amplifies pricing power and supports a higher ceiling for utilization rates, increasing incremental ROIC [return on invested capital] for new fleet additions,” he added. “That said, there are significant costs to support this growth as the company scales and densifies its presence in key markets, and contributions from new trucks and operators will take time to fully ramp up. In addition, elevated CapEx and incremental tariff costs will create another burden on FCF conversion / generation.
“In our view, this is the issue at the crux of the (current) BDGI thesis; in times of growth, FCF is pressured by expansion costs but, in a dislocation, the larger asset base will amplify the drag on utilization rates. Of course, no one can reasonably blame a company for going where the growth is, but this is a fundamental issue that investors in somewhat cyclical and highly capital-intensive industries must keep in mind.”
On Friday, the Calgary-based provider of non-destructive excavating and related services slipped 5.8 per cent despite reporting quarterly revenue of US$214-million, up 14 per cent year-over-year and topping Mr. Sytchev’s US$211-million estimate and the Street’s US$207-million projection as fleet expansion and growth in revenue per truck (RPT) beat expectations. However adjusted EBITA and earnings per share of US$45-million and 34 US cents, respectively, missed forecasts (U$51-million and 55 US cents and US$49-million and 51 US cents) as margins fell and operating leverage “did not materialize.”
“End-market demand is as strong as ever,” said Mr. Sytchev. “The infrastructure buildout continues to accelerate across North America, with IIJA funds continuing to flow in the U.S. and Canada ramping up. Management noted that demand for Badger’s services is the strongest in memory, and there is ample revenue visibility for at least three to four years. In addition to building scale / density in target markets with new branches, BDGI is also expanding into adjacent services such as industrial cleaning and trench shoring work to diversify its revenue profile. Management also sees more long-term upside in utilization rates, and we expect pricing realization to be strong, but accelerated fleet expansion suggests a more moderate pace of RPT growth as new trucks / operators ramp up to full run-rates. Discussions around an additional production facility continue, with a positive decision being more likely if the newly-implemented 25-per-cent tariffs on non-U.S. content in Badger’s trucks stick around (also, would be geographically more efficient given that 90 per cent of revenues come from the U.S.).
“Expansion costs to pressure margins and FCF in the near-term. 2026E fleet growth came in slightly above our pre-quarter expectations and the incremental US$20-million investment into adjacencies pushed 2026E CapEx well above our prior estimates. With tariff costs of US$18-million to US$30-million and accelerated hiring/training of new technicians, we expect a near-term drag on margins and FCF as management continues to scale up the platform to meet demand (onboarding cycle is 90 to 100 days, pushing incremental revenue realization forward somewhat).”
While he thinks operational streamlining will support the company’s long-term 25-30-per-cent margin targets, he warned “savings will take time to be realized,” lowered his target to $74 from $82, keeping a “sector perform” rating “as increased costs constrain margin expansion, higher CapEx pressures FCF, and a weaker USD creates a translation drag.” The average is currently $82.21.
Elsewhere, other revisions include:
* Stifel’s Ian Gillies to $81 from $85 with a “buy” rating.
“Two issues in BDGI’s 4Q25 results caused concern, both of which can be dispelled,” said Mr. Gillies. “The first was a near-term slowdown in margin expansion as management invests in the business and the second was a larger-than-expected capital program. The operational reality is that market demand is exceedingly high and Badger needs to invest to retain and expand its leading market position. Volume ultimately drives margin expansion in this business. We estimate the new growth capital being invested has an incremental ROIC of 14.8 per cent without tariffs and 11.0 per cent with tariffs which sufficiently hurdles the company’s 8-per-cent cost of capital. Strategically, this new capital is going to further increase the company’s moat in its key U.S. operating regions. We are decreasing our TP to $81.00 from $85.00 due to lower EPS estimates but we maintain our BUY rating and would be accumulating aggressively post sell off given our bullish multiyear outlook.”
* Canaccord Genuity’s Yuri Lynk to $70 from $81 with a “hold” rating.
“We continue to see compelling growth opportunities for Badger and, in fact, are increasing our 2026 and 2027 revenue estimates. However, the $198 million to $230 million 2026 capital program, which includes some unexpected tariffs, was a negative surprise. We’re talking 13% of market cap. Combined with previously discussed growth expenses, this weighs on near to medium-term adjusted EPS and capital efficiency. The risk/reward appears balanced at current valuation levels, in our view,” said Mr. Lynk.
* Acumen Capital’s Trevor Reynolds to $80 from $82.25 with a “buy” rating.
“Based on strong activity levels and end market growth observed through H2/25 BDGI plans to build between 270-310 units in 2026 (210 in 2025) along with added capex for new branches and investments in new service lines. While the capex increase and expected tariff impact come as somewhat of a surprise, we are encouraged by management’s commentary around the strength of the market and growth visibility over the coming years. Our focus over the coming year will be on margins following the unexpected decline in Q4,” said Mr. Reynolds.
In a client report released Monday titled Bringing Back Gold Mining in the Yukon, National Bank Financial analyst Rabi Nizami initiated coverage of Fuerte Metals Corp. (FMT-X) with an “outperform” rating, seeing the Vancouver-based company “unlocking an orphaned major company asset.”
"Fuerte Metals Corporation is focused on bringing online the Coffee gold project in Yukon, one of Canada’s largest undeveloped gold projects, hosting 3.8 million ounces at 1.15 g/t [grams per tonne], with a large 70,000-hectare exploration package with many drill targets,“ he said. ”Recently released from Newmont where it was non-core, the project is now being advanced quickly by a motivated junior with strong institutional and technical backing. Coffee comes with a history of de-risking by prior operators who collectively spent over $300 million, drilled 617,000 metres, and completed the federal environmental assessment. The project is now at a clear inflection point, with final territorial permits, project financing and a construction decision within reach over the next 12 months."
Mr. Nizami called Coffee, which is located 95 kilometres north-east of Beaver Creek, a “high-quality” heap leach with “rapid payback economics” and a potential 40-per-cent internal rate of return.
“The open pit head grade of 1.25 g/t and strong oxide recoveries sit well above the range typical of global heap leach mines and underpin low unit costs, rapid capex payback, and strong Internal Rate of Returns (IRRs),” he explained. “Based on the 2026 Preliminary Economic Assessment (PEA) mine plan, we model $1-billion initial capex with 25-per-cent contingency, for a conventional open pit and heap leach mine with 250 koz annual production at low AISC of US$1,328/oz over the first five years of a 13-year life. Strong margins drive payback of less than two years, and a 40-per-cent IRR and NPV5-per-cent of US$1.9 billion upon construction at US$3,200/oz gold, rising to 60-per-cent IRR and US$4.2 billion at US$5,000/oz gold.”
Also touting Fuerte’s “best-in-class institutional and technical backing” through Newmont, Agnico Eagle, Pierre Lassonde and a “capable” management team, Mr. Nizami set a target of $15 per share with an estimated total return of 41.5 per cent, seeing “valuation re-rate on de-risking to construction and into production.” The average target on the Street is $14.50.
“Fuerte trades at a 0.70 times P/NAV versus our modeled Net Asset Value Per Share (NAVPS) (NPV6-per-cent and one-year to construction approval),” he added. “As the company finalizes engineering, permits, and project financing over the next year, our NAVPS increases 11 per cent and P/NAV is further discounted to 0.62 times (NPV5-per-cent, upon construction start). NBCM peers that are in production currently trade at over 1.0 times.
"Our thesis considers an attractive intermediate-scale, low-cost, heap leach gold project with rapid payback economics; at an inflection point with final permits and a construction decision anticipated in the coming months; strong institutional backing and respected leadership team that is gearing up to execute on the build and restore confidence in the Yukon’s gold mining industry. Our target price is based on a 1-time multiple to NAVPS plus corporate adjustments. We ascribe a Speculative risk rating given the pre-construction stage of the company."
In other analyst actions:
* Believing its “transition phase limits visibility,” Canaccord Genuity’s Robert Young downgraded Thinkific Labs Inc. (THNC-T) to “hold” from “speculative buy” with a $2 target, down from $4.25. The average is $2.17.
“Thinkific delivered Q4 results broadly in line with expectations as the company continues to execute its strategic transition towards upmarket, higher-value enterprise customers,” said Mr. Young. “Revenue grew 6 per cent year-over-year in Q4, driven by 13 per cent in Commerce and 5 per cent in Subscription. Plus segment revenue grew 17 per cent year-over-year to $5.0-million, consistent with Q3 and still light of the 30-per-cent target. Management highlighted continued traction in its upmarket go-to-market strategy, although the longer sales and implementation cycles of larger contracts are expected to delay the revenue impact until H2/26. At the same time, Thinkific is also accelerating its AI roadmap and has recently launched its new AI teaching assistant, Thinker. In the near term, the company expects margin pressure from incremental R&D investments in AI, while also navigating a leadership transition with the departure of the CFO. Given the company remains in a strategic transition phase with limited visibility on the timing and pace of growth reacceleration, we believe valuation remains constrained despite a strong balance sheet position. We lower our rating to HOLD from Spec Buy and our TP to $2.00 from $4.25. Our revised TP is based on 0.6 times (previously 2.0 times) NTM [next 12-month] EV/Sales. Admittedly, we are late to this downgrade, leaning previously on valuation and cash balance. With growth re-acceleration now expected in H2 alongside weaker EBITDA margin guidance, a CFO transition amid a difficult software tape and the continued overhang from Rhino shares, we are throwing in the towel.”
* In response to a “solid” finish to 2025, National Bank’s Patrick Kenny bumped his AltaGas Ltd. (ALA-T) target to $51 from $50 with an “outperform” rating. Other changes include: Scotia’s Robert Hope to $52 from $50 with a “sector outperform” rating, ATB Cormark Capital Markets’ Nate Heywood to $52 from $49 with an “outperform” rating and RBC’s Maurice Choy to $50 from $48 with an “outperform” rating. The average is $48.57.
“As AltaGas completed 2025 with financial results at the top-end of its EBITDA guidance range, we see 2026 as being a year that will highlight the criticality and strategic positioning of the company’s assets, from its LPG export terminals (which support evolving global demand and Canada’s desire to diversify energy exports), to its utilities that deliver essential gas supply amid extreme weather conditions and rising demand due to data centers. We see net tailwinds to its financial performance in the near-term that are backed by supportive commodity price and volume dynamics, as well as by new assets,” said Mr. Choy.
* Citing multiple expansion and positive estimate revisions following last week’s release of its fourth-quarter 2025 results, Desjardins Securities’ Chris MacCulloch raised his target for Canadian Natural Resources Ltd. (CNQ-T) to $56 from $52 with a “hold” rating. The average is $56.42.
“CNQ provided a solid update, highlighted by leaner capital spending and increased volumes following the Peace River acquisition. While acknowledging that adjusted corporate net debt targets will accommodate an acceleration of capital returns, we still see more compelling opportunities elsewhere in the Canadian large-cap oil space,” he said.
* Mr. MacCulloch also increased his Tourmaline Oil Corp. (TOU-T) target to $74 from $70, remaining above the $68.89 average, with a “buy” rating.
“We were perplexed by [the] negative market response to what we viewed as an overwhelmingly constructive update. Specifically, the company strengthened the sustainability of its business model through margin-enhancing initiatives, a leaner capital program and a more disciplined dividend policy—all critical improvements which will support long-term growth plans,” he said.
* Mr. MacCulloch’s target for Vermilion Energy Inc. (VET-T) jumped to $16 from $13.50 with a “hold” rating. The average is $15.
“Operational execution remains a mixed bag, with renewed downtime at Wandoo overshadowing an otherwise solid print, which reinforces our preference for a more focused portfolio. To that end, we remain cautious on the stock in view of elevated debt levels and muted near-term growth while acknowledging the potential for resurgent European natural gas prices to provide a material FCF lift,” he said.
* National Bank’s Zachary Evershed raised his Doman Building Materials Group Ltd. (DBM-T) target to $12.50 from $12, remaining above the $11.38 average, with an “outperform” rating. Other changes include: Raymond James’ Daryl Swetlishoff to $12 from $11 with a “strong buy” rating, Stifel’s Ian Gillies to $11.50 from $11.75 with a “buy” rating and Desjardins Securities’ Frederic Tremblay to $12 from $11 with a “buy” rating.
“While Q4 fell short of expectations, we are more constructive heading into Q1/26 as lumber cash markets have strengthened, supported by tighter supply and improving demand,” said Mr. Evershed. “Management’s outlook this year is a mix of caution and optimism as they warn against expecting anything straying far from roughly flat demand from R&R given the murky outlook, but sounded more positive on new residential demand, as with mortgage rates down from the high 6s, more buyers can engage with the market as affordability pressures ease.”
* Scotia’s Konark Gupta increased his Exchange Income Corp. (EIF-T) target to $129 from $121 with a “sector outperform” rating. The average is $120.64.
“We argue that it’s high time to use SOTP [sum-of-the-parts] rather than historical trading multiples given EIF’s portfolio has significantly diversified away from purely a small regional scheduled passenger airline that laid the foundation of the business in 2004. We note that the stock continues to fall under 'Passenger Airlines' GICS, which is not a true representation of the current business. Today, EIF generates 45 per cent of revenue and likely 40 per cent of EBITDA, in our estimation, from essential air services, which are quite distinct from commercial passenger airlines in terms of resilience and margins. Furthermore, the company is increasingly gaining exposure to secular infrastructure and defense themes (higher multiple) through various subsidiaries that it acquired over the past decade or so, which likely account for 40 per cent of EBITDA. To appropriately conduct our SOTP analysis, we have thoroughly examined each business line’s moat (summary inside), while significantly expanding our valuation comps set to 60 stocks," said Mr. Gupta.
* RBC’s Michael Harvey raised his Headwater Exploration Inc. (HWX-T) to $13, exceeding the $11.33 average, from $11 with a “sector perform” rating.
“Headwater released largely pre-announced results that fell in line with expectations; operational results remain robust with test well rates continuing to impress and HWX positioned to maintain 10-12 per cent year-over-year production growth. We shift our PT to $13 on higher estimates and target multiple expansion as exploration results continue to exceed expectations,” said Mr. Harvey