Inside the Market’s roundup of some of today’s key analyst actions
Energy equity analysts at Raymond James see a constructive, “Goldilocks” setup for Canadian exploration and production companies with the potential for further improvement amid attractive valuations.
“Spot commodity prices have ripped higher (currently more than $100/bbl) and the WTI curve doesn’t dip below US$70/bbl until late-2028,” they said. “Further, we believe the medium-term macro gets increasingly constructive every day the Strait of Hormuz remains closed (continued drawdown in global inventory), and given there are an abundance of signals suggesting this conflict draws out well into April (or beyond), real energy infrastructure is being damaged in the meantime, demand destruction has so far appeared limited, and North American E&Ps are remaining extremely disciplined (the oil supply response - so far - looks nonexistent), we think it’s likely the setup gets better from here.
“Improving Canadian egress picture: significant progress on new takeaway initiatives was already being made with MLO1, MLO2, TMX DRAs, and the Bridger Pipeline open season. With the conflict in Iran, we suspect many foreign buyers will also be rethinking energy security, and we’ve seen reports last week that sovereign wealth funds are entertaining becoming equity partners in the proposed West Coast pipeline being put forward by the Alberta government; while we’re still skeptical that moves forward, the probability has certainly increased, and that would be a game changer."
In a client report released before the bell, the analysts updated their commodity price deck to reflect strip pricing as of Friday close. While their mid-cycle WTI assumption of US$65 per barrel remains unchanged, their strip pricing over the next few years is “up significantly” with a “material” impact on their estimates, valuations, and ratings.
“The big things to point out are that oil pricing moves higher, AECO strip moves lower, the C$ weakens, crack spreads improve materially, and we increase our mid-cycle WCS differential assumption modestly,” they noted.
With that view, the analysts upgraded many of the small-to-mid-cap oil E&P companies in their coverage universe to “outperform” from “market perform” previously. They are:
- Athabasca Oil Corp. (ATH-T) with a $13 target, up from $8. The average target on the Street is $8.79, according to LSEG data.
- Baytex Energy Corp. (BTE-T) with a $7 target, up from $5.50. Average: $5.35.
- Cardinal Energy Ltd. (CJ-T) with a $13 target, up from $9.50. Average: $10.50.
- Gran Tierra Energy Inc. (GTE-T) with a $15 target, up from $9. Average: $9.17.
- Obsidian Energy Ltd. (OBE-T) with a $15 target, up from $10. Average: $11.
- Surge Energy Inc. (SGY-T) with a $11 target, up from $9. Average: $9.58.
Conversely, they downgraded royalty companies, noting: “While we believe each Canadian royalty offers reasonably compelling long-term value, we have downgraded the space as a whole given a preference for more direct producer exposure in the near-term combined with an average 18-per-cent move in the group year-to-date.”
In that group, they moved these stocks to “market perform” from “outperform” previously:
- Freehold Royalties Ltd. (FRU-T) with an $18 target, up from $17.50. Average: $18.17.
- PrairieSky Royalty Ltd. (PSK-T) with a $35.50 target, up from $35. Average: $33.50.
- Topaz Energy Corp. (TPZ-T) with a $35 target (unchanged). Average: $33.15.
As well, analyst Luke Davis downgraded Canadian Natural Resources Ltd. (CNQ-T) to “market perform” from “outperform” with a $65 target, rising from $55. The average is $60.46.
“CNQ has outperformed our oil-weighted peer group month-to-date (up 17.5 per cent vs. group ex-GTE up 16.0 per cent), which we find unusual given CNQ has the 2nd least torque to higher oil prices,“ he said. ”Even with our updated price deck, CNQ is trading through our revised target, and we are therefore downgrading the stock to Market Perform on valuation."
The analysts concluded: “Our bias today - which is reflected in our rating changes - is absolutely skewed toward the Oil E&Ps. That’s true in the SMID space where we highlight ATH, SGY, and WCP as top picks, and it’s true for CVE and SU in the large cap/integrated space.”
Stifel analyst Martin Landry sees Lassonde Industries Inc. (LAS.A-T) entering its current fiscal year with “strong momentum” following last week’s release of fourth-quarter 2025 results that exceeded his expectations.
Shares of the Quebec-based agri-food company soared 12.8 per cent on Friday after it reported revenue of $768-million, up 4.1 per cent year-over-year and narrowly ahead of the analyst’s $760-million estimate and the consensus forecast of $759-million. Earnings per share jumped 47 per cent from the same point a year ago to $7.52, blowing past projections ($5.87 and $5.93, respectively) driven by higher gross margins.
“Lassonde caps another strong year, with EPS up 20 per cent year-over-year, above and beyond the 45-per-cent year-over-year EPS growth reported in 2024,” said Mr. Landry. “Management discussed the company’s outlook for 2026 which is cautiously optimistic. The company should benefit from the decline in the price of orange concentrate as well as cost savings initiatives and manufacturing efficiencies. However, the rise in crude prices may increase operational costs for Lassonde reflected in higher resin costs and freight costs.
“Lassonde’s shares trade at 8 times forward earnings, one of the lowest levels in the last ten years and five turns lower than its historical average providing investors with an appealing entry point.”
In response to a “strong” gross margin performance and impressive EBITDA growth, the analyst raised his 2026 and 2027 EPS estimates by 7 per cent each, pointing to a lower tax rate than previously modeled.
That led him to hike his target for Lassonde shares by $15 to $280, keeping a “buy” rating. The average on the Street is $258.50.
“Lassonde’s shares trade at 8.2 times forward P/E, a valuation that is difficult to understand given the company’s growth prospects, healthy balance sheet and historical valuation,” he added. “The company’s 10-year P/E average stands at 13 times; hence, the current valuation is depressed vs historical levels. Lassonde’s valuation is also heavily discounted relative to its peers, trading at a discount of almost 60 per cent to peers, despite having similar growth prospects, by our model.”
“Lassonde has embarked on a sizable CAPEX program following several years of under-investments. These capital projects, aimed at modernizing and increasing automation in the company’s production lines, could unlock opportunities for introducing new product formats and enhancing efficiencies. In our view, these benefits may not be fully reflected in the earnings estimates and the company’s valuation.”
Elsewhere, Desjardins Securities’ Frederic Tremblay bumped his target to $275 from $270 with a “buy” rating.
“Lassonde wrapped up a solid 2025 with better-than-expected 4Q results supported by pricing actions and US market share gains. With macro uncertainties poised to continue in 2026, we view the company as well-equipped to reach its financial targets on the back of business resilience, operational adaptability, product innovation, category diversification and a solid financial position,” said Mr. Tremblay.
RBC Dominion Securities’ Sabahat Khan sees a “a good outlook amidst a dynamic backdrop” for BRP Inc. (DOO-T) following quarterly results that beat the Street and an outlook that at least matched the expectations of most analysts.
“Overall, Q4 results reflected a continuation of recent trends, with good uptake on new product introductions (as indicated by the company’s share gains, with North American retail sales up 12 per cent year-over-year vs. up low single digits for the industry) and improving inventory levels throughout the network (North America inventory was down 17 per cent year-over-year and down 6 per cent vs. pre-COVID levels). Although some competitors are still carrying high levels of noncurrent inventory, the environment is improving meaningfully compared to the past 12-18 months, which is expected to result in less promotional activity over the coming year (50 basis points tailwind to margins).
“Overall, while the macro/industry backdrop remains uncertain given the evolving situation in the Middle East (discussed below), trends to-date remain consistent with prior expectations (i.e., flat retail sales), and we believe the cleaner inventory setup positions BRP well going forward.”
Mr. Khan thinks the Valcourt, Que.-based company is “well-positioned to execute against its guide (and M28 targets) given the company’s momentum with its new product introduction (i.e., gaining share) and its cleaner inventory position (right-sizing largely
complete; sales expects to largely match retail going forward)."
He noted its fiscal 2027 guidance calls for sales growth of 5-8 per cent with the company yet to experience any consumer-related disruptions from Middle East fallout. That is likely to translate to 6-16-per-cent normalized EBITDA growth.
The bottom-end of the guide reflects a mid-single-digit decline in H2 retail sales, driven by an assumed deterioration in consumer demand as a fallout from the Middle East situation," he noted. “While we will continue to monitor the consumer demand backdrop, we believe this assumption is conservative given BRP’s sales skew toward higher income households ($170K+), which we believe should insulate the company from shorter-term demand swings.”
Believing it is “well positioned to deliver strong results through the cycle,” Mr. Khan trimmed his target to $124 from $131, keeping an “outperform” rating after a modest adjustment to his 2027 earnings projection. The average on the Street is $120.12.
“We believe our target multiple fairly reflects our outlook for long-term topline and earnings growth, improving FCF generation, and BRP’s strong track record,” he said.
“We believe BRP’s culture of innovation distinguishes the company from its peers and positions it for long-term growth. We see runway for continued growth and believe the company is well positioned to deliver strong results through the cycle.”
RBC Dominion Securities analyst Jimmy Shan thinks the valuation for Colliers International Group Inc. (CIGI-Q, CIGI-T) “remains attractive though heightened macro uncertainty (including AI) can continue to weigh on stock near term.”
With its U.S.-listed shares down over 32 per cent thus far in 2026 over fears of how artificial intelligence will disrupt its business model, Mr. Shan said it was no surprise that recent investors meetings with the company’s CFO and CEO of Commercial Real Estate, Christian Mayer, focused on those concerns.
“CIGI remains cautiously optimistic across all segments although recent rate increase can have an impact if it persists,” he said. “The question of whether CIGI should be viewed as sum-of-parts or cohesive story was a topic of discussion, which in our view, becomes a moot point if CIGI delivers on its growth objective.”
“Residential brokerage has not been disrupted despite its relative homogeneity and data transparency. CRE transactions are larger and more complex, relationship driven, and involve negotiation. Valuation and Engineering services provide ‘risk transfer’ for clients – Valuation process can be enhanced by AI but a credentialed human is part of the value proposition. Similarly, engineering design work process can be automated but accountability and human inspection sign offs are necessary/mandated. CIGI views AI as an enabler and is focused on improving broker work flow and productivity (e.g., comparable analysis, deck presentation etc..). CIGI expects larger firms to be better positioned given they have the data and financial strength to invest in AI.”
In a client note released before the bell on Monday, Mr. Shan said the Toronto-based company “made the case that it should be viewed similar to its large brokerage peers who also have distinct segments but not viewed as ‘holdcos.’”
“CIGI has a decentralized operating model but segments are synergistic and there are cross selling opportunities. We think quantifying cross-selling revenues or tangible case studies could help address this perception,” he added.
“Why not buy back stock? Acquisition of Ayesa will take net debt/EBITDA to 2.7 times, which should decline to 2.2 times with free cash flow by year end, at which point, CIGI would consider buying back stock. Management has been buying stock, including Jay Hennick (100K for C$16-million in February).”
Maintaining his “outperform” rating for Colliers shares, the analyst reduced his target by 11 per cent to US$160 from US$180, “reflecting where peers are trading and heightened uncertainty with respect to macro conditions and AI impact on its business.” The average on the Street is US$172.
“Colliers’s average ROIC of 15 per cent since spin-off in 2015 ranks top-quintile within the broader S&P/TSX index and above its U.S.-listed commercial real estate brokerage peers,” he noted.
“Long-term compounding potential: Colliers’s business is advantaged by its globally recognized brand and its asset- light and high free cash flow generation, matched with its decentralized/partnership model and its small size relative to the acquisition opportunities that run across countries and diverse segments that service the CRE industry. Accordingly, we believe it is capable of compounding capital in the low- to mid-double-digit range over the long term.”
Citi analyst Scott Gruber likes Ovintiv Inc.’s (OVV-N, OVV-T) portfolio and recent balance sheet “resets,” however, seeing a better risk-reward proposition in peers in Devon Energy Corp. (DVN-N) and Permian Resources Corp. (PR-N), he lowered his rating for its shares to “neutral” as he reduced his list of “buy”-rated equities.
“We commend OVV on streamlining their portfolio down to two core basins and deleveraging the balance sheet,” said Mr. Gruber. “The company retains a long inventory position, especially in Canada (20 years of condensate rich inventory), and are a leader in shale operations (both in terms of technique and technology deployment).
“However, shares are up 53 per cent year-to-date, above the XOP at 46 per cent, and at $60 the stock is broadly in-line with our fair value estimate. Further OVV is trading at a 6-per-cent yield on our 2026 estimate and a 4.6-per-cent yield on our 2027 estimate, essentially blending to 5.3 per cent at a low $70s WTI price. While we see longer-term prospects for greater oil and gas exports out of Canada, near term the market likely remains well supplied. In addition, OVV could be aggressive on buybacks given the 75-per-cent cash return pledge for 2026, but we view this as more of a stock cushion versus an alpha driver now that the stock has hit $60.”
With his downgrade, the analyst raised his target for Ovintiv shares to US$62 from US$52. The average is US$59.74.
“The domestic oily E&Ps have been our preferred way to increase exposure to Energy given leverage to the commodity, limited to no exposure to Middle East operational risk and being less well-owned prior to the conflict ... We update our oil-levered E&P models for Citi’s latest WTI price forecast ($74/$65 in 2026/’27) and scrutinize valuation following a 46-per-cent year-to-date rally for the group,” he added.
“After rising 53 per cent year-to-date and hitting $60, OVV presents EV/DACF [enterprise value to debt-adjusted cash flow] multiples of 5.5 times/6.0 times on 2026E/’27E, in-line with companies of similar scale. However, FCF is worse given less oil leverage with FCF yields of 5.9 pr cent/4.6 per cent in 2026E/’27E, blending to 5.3 per cent in a low-$70s WTI scenario. This is below some larger-cap peers and thus we downgrade OVV to Neutral.”
Pointing to its valuation and an “upcoming free cash flow uplift,” ATB Cormark Capital Markets analyst Amir Arif upgraded Vermilion Energy Inc. (VET-T) to “outperform” from “sector perform” previously.
“VET is a value name and our thesis remains the same that the multiple on the name has room to expand as Deep Basin execution takes place and as corporate FCF begins to improve in 2027/2028 from Germany and Montney buildouts,” he said after recent investor meetings with the Calgary-based company’s management team. “The Deep Basin execution began to show up in Q4/25 results and we believe it will also be a standout in Q1/26. The FCF increase with Germany and Montney is longer-term in nature but helps solidify the underlying asset value and FCF transition that is taking place longer-term.
“With the move in TTF European gas pricing and given the potential for European gas to remain tight through at least the summer refill and winter season, the valuation on VET at strip pricing has improved again to levels that we believe warrant an upgrade. VET trades at 2.4 times 2027 strip EV/DACF and provides a CF sensitivity of 3-per-cent corporate CF for every $1/mcf move in TTF pricing.”
Mr. Arif raised his target for Vermilion shares to $24 from $16. The average on the Street is $16.71.
While noting AGT Food and Ingredients Inc. (AGTF-T) has “materially scaled the top-line, de-risked its equity, and expanded margins since going private in 2019,” TD Cowen analyst Derek Lessard sees limited near-term upside due to its “lower margin profile and weaker FCF conversion relative to its processor peers.”
That led him to initiate coverage of the Regina-based company, which completed an initial public offering on March 9 for gross proceeds of $425-million, with a “hold” rating.
“We believe the market needs to see AGT close the gap on these financial metrics before assigning a higher multiple: 1. Execution progress is evident, but still early in scale and consistency. We believe further proof is needed that returns, utilization, and customer demand can scale consistently across regions. 2. Residual commodity exposure, FX, and geographic complexity temper earnings visibility. While AGT’s diversified footprint mitigates single-market risk, exposure to commodity pricing, FX volatility, and execution risk in new geographies (i.e. India expansion) continue to weigh on earnings visibility relative to peers with simpler operating models. 3. Catalysts are present, but timing remains uncertain,” he explained in a client report.
“As we’ve pointed to above, we see a clear path to value creation. However, the timing of a meaningful re-rating depends on further evidence of execution rather than immediate catalysts, which is the basis of our HOLD recommendation.”
Mr. Lessard believes closing AGT’s valuation gap is “an execution story, with management already reaching several key milestones since privatization in 2019.”
He explained: “1. AGT has materially de-risked its equity by reducing leverage to approximately 0.2 times (from 7 times prior to privatization), divesting non-core and capital-intensive assets, and resetting the business around an asset-light, modular growth model. 2. Margin expansion is already evident (up 180 basis points since privatization), supported by capital deployment into higher-return, demand-backed projects (most notably better-for-you pasta lines, which generate 20-per-cent EBITDA margins versus 10–13 per cent in traditional categories). 3. Modular capacity additions with more than 20-per-cent IRRs are underway across Türkiye, India, and North America, with utilization ramping and customer demand confirmed (i.e. supply-constrained) rather than speculative. 4. AGT has accelerated its mix shift towards private label, strengthened FCF generation, and improved its earnings resilience through greater geographic and end-market diversification.
“Collectively, these milestones demonstrate tangible (rather than aspirational) execution progress. We outline the progress to date, capital already deployed, and visible demand throughout this presentation. We believe AGT is positioned to steadily narrow its valuation discount as it builds consistency and scale.”
Mr. Lessard, who is the first analyst to initiate coverage, set a target of $21 per share, representing 12.4-per-cent upside from Friday’s close.
Pointing to the permitted status of its Goldboro project in Nova Scotia, a “strong” balance sheet and an increasing level of on-site activities, National Bank Financial analyst Alex Terentiew said he continues to view NexGold Mining Corp. (NEXG-X) as “one of the most undervalued companies in the sector and reiterate the company as a Top Pick amongst its project developer peers.”
He updated his forecast for the Toronto-based exploration stage miner ahead of “active” year, moving his timeline for development of Goldboro, which is located in Guysborough County, forward, though he noted it is “a little behind” his prior estimates. He also emphasized exploration at its Goliath complex in Northwestern Ontario is “showing upside potential.”
“Although we were anticipating an updated feasibility study in Q2/26, we think it could now be a Q3/26 event as the resource update is finalized and incorporated into an updated mine plan,” said Mr. Terentiew. “Positively, however, management reiterated that they continue to advance and de-risk Goldboro and are moving towards an investment decision later this year, in line with our prior expectation. A tightly spaced, 30,000-metre drill program has commenced, and we expect the program’s results to de-risk the project’s early years as grade expectations are refined. We continue to assume construction commencing in Q1/27 with first production in 2029.
“Recent drilling success at the Ontario-based project has confirmed the potential for open pit extensions at the Goldlund deposit, as well as higher grade underground potential. With Goldlund showing more upside, the likelihood of a revised mine plan we see as increasing, with infrastructure more likely to be situated at Goldlund, rather than the current plan for ore to be trucked to Goliath.”
Continuing to view the Goldboro project, which represents 63 per cent of its current net asset value, as “the primary driver of value in 2026,” the analyst sees NexGold as “attractively valued” and reiterated his “outperform” recommendation.
However, Mr. Terentiew, who is currently the lone analyst covering the company, lowered his target for its shares to $6.00 from $7.25 to reflect an assumption that all warrants will ultimately be exercised.
“The decline in our target price is almost entirely attributed to our inclusion of additional shares in our fully diluted share count,” he added. “Given our view that we expect NexGold’s shares to re-rate higher as catalysts in 2026 unlock value (namely the completion of the updated resource estimate and FS in Q3/26, followed by arranging financing in Q4/26 and Board approval to commence construction), we now assume that all the company’s outstanding warrants will be exercised, bringing in cash to fund Goldboro’s development, but also adding some dilution to the shareholder base.”
In other analyst actions:
* Coming off research restriction following the closing of its 4.4 million share, $172.5-million treasury offering, Desjardins Securities’ Benoit Poirier raised his Aecon Group Inc. (ARE-T) target to $45 from $43 with a “hold” rating (unchanged). Others making changes include: ATB Cormark’s Chris Murray to $42 from $39 with a “sector perform” rating, BMO’s Devin Dodge to $45 from $40 with an “outperform” rating and TD’s Michael Tupholme to $49 from $47 with a “buy” rating. The average on the Street is $42.96.
“We view the equity financing as another step in derisking the ARE story, reinforcing our post‑4Q decision to lower our risk rating to Average and raise our multiples following structural improvements by management. The next catalyst that could further support higher multiples/conviction would be consistent margin execution or introduction of multi‑year growth targets. That said, following the AI‑driven pullback in engineering names, we continue to favour WSP/STN/ATRL given their stronger relative potential returns," said Mr. Poirier.
* Barclays’ Dan Levy trimmed his Magna International Inc. (MGA-N, MG-T) target to US$66 from US$67 with an “equalweight” rating. The average is US$66.07.