Inside the Market’s roundup of some of today’s key analyst actions
Heading into quarterly earnings season in Canada’s technology sector, National Bank Financial analyst Richard Tse is expecting in-line results for his coverage universe, emphasizing “the backdrop heading into the ‘prints’ is notably better than it was as recently as a month ago.”
“The question is – are we past the trough? In our view, the numbers would suggest yes, but that’s not to say those trough levels won’t be retested given the seemingly daily sways from increasingly disruptive AI announcements – most often care of Anthropic,” he said.
“As always, Canadian Technology stocks continue to be shaped by global (and more specifically, U.S. trends). As noted, that tone has improved in recent weeks as technology and, more specifically, software stocks have recovered from their earlier drawdowns. U.S. software has started to show some lustre, with the iShares Expanded Tech-Software ETF (IGV) trading at US$85.20 as of April 24 close (from its year-to-date low of US$73.93 on April 10), while our own leaders, like Shopify, have also rebounded meaningfully, with Shopify at US$125.83 as of April 24 close (from its year-to-date low of US$104.92 on Feb 12). In our view, that recovery does not mean the risk of AI disintermediation has disappeared; rather, the relative valuation when paired with fundamentals (that have yet to show erosion) are pulling in interest. As for our broader coverage group, we’ve seen little signs of a negative impact on our current estimates (forecasts).”
In a client report released before the bell, Mr. Tse recommends investors examine stocks that he has given “outperform” recommendations, emphasizing his view of “a growing risk of disintermediation” across his sector due to the impact of AI.
“Given that view, we were focused on names where we thought the fundamentals when paired with valuations reflected a positive risk-to-reward profile with relative AI resiliency — namely Shopify, Kinaxis, OpenText, CGI, VitalHub, Zedcor, and recently Kraken added to that list," he said.
“Shopify and Kinaxis still stand out as among the best positioned to benefit from AI tailwinds, followed by names like Coveo, OpenText and CGI. If anything, the recent rebound in software stocks suggests the market is beginning to differentiate more clearly between potential AI beneficiaries and names perceived to be more exposed to disruption. Of course, this analysis reflects data as of a point in time and, given rapidly changing business models, such rankings remain subject to change.”
Mr. Tse made four target adjustments to stocks he covers:
- CGI Inc. (GIB.A-T, “outperform”) to $150 from $185. The average target on the Street is $152.34, according to LSEG data.
- Computer Modelling Group Ltd. (CMG-T, “sector perform”) to $5 from $6. Average: $5.75.
- Coveo Solutions Inc. (CVO-T, “sector perform”) to $7 from $9. Average: $9.83.
- Tecsys Inc. (TCS-T, “sector perform”) to $40 from $32. Average: $34.25.
For his other “outperform”-rated stocks, his targets are:
- Kinaxis Inc. (KXS-T) at $240. Average: $209.75.
- Kraken Robotics Inc. (PNG-X) at $13. Average: $9.50.
- Open Text Corp. (OTEX-Q, OTEX-T) at US$45. Average: $30.43.
- Shopify Inc. (SHOP-N, SHOP-T) at US$200. Average: US$164.23.
- VitalHub Corp. (VHI-T) at $14. Average: $12.60.
- Zedcor Inc. (ZDC-X) at $7.50. Average: $8.50.
Elsewhere, BMO’s Thanos Moschopoulos lowered his CGI target to $122 from $137 with an “outperform” rating.
“We remain Outperform on CGI and have reduced our target price, reflecting the multiple compression among peers. We think better clarity on the macro, and on CGI’s ability to navigate AI, will be needed in order for the stock to work—and we expect that uncertainty to persist post the print. However, we think concerns on both fronts are likely to be less pronounced as the year progresses. In the meantime we view the stock’s risk/reward as favorable given CGI’s depressed valuation and our view that consensus FY2026 estimates are achievable," said Mr. Moschopoulos.
Seeing its “momentum” continuing, Stifel analyst Martin Landry expects “another strong quarter” from Aritzia Inc. (ATZ-T) when it reports results on May 7.
“Following strong observed credit/debit card data published by Bloomberg, we are raising our Q4FY26 comparable sales growth expectation by 700 basis points to 21 per cent year-over-year, higher than consensus of 18 per cent,” he said in a client note. “We expect Aritzia to introduce a FY27 guidance higher than current consensus expectations, potentially driving upwards earnings revisions.
“Shares of Aritzia touched an all-time high on Friday as investors are pricing the company’s strong operational performance. Hence, buyside expectations appear to already reflect an earnings beat and momentum continuing into Q1FY27 as credit card data is now widely available. Valuation at 26-times forward earnings is higher than historical averages of 21 times but warranted given the strong earnings growth expected. We expect EPS growth of 34 per cent year-over-year in FY27, higher than peers and reflecting a reasonable PEG ratio of approximately 1 time.”
For the fourth quarter of its fiscal 2026, Mr. Landry is now projecting earnings per share of $1.07, up 7 cents from his previous estimate and 5 cents above the consensus expectation. That is a gain of 29 per cent from the same period a year ago.
“Despite lapping strong growth last year, Aritzia’s sales momentum in the U.S. continues with observed credit card data from Bloomberg Second Measure suggesting that U.S. sales are up 40-45 per cent year-over-year. “It is a similar pace than what the
company reported on average in the last four quarters. This is explained by a growth of 21 per cent in the number of U.S. stores year-over-year and most probably a growth in square footage that is slightly higher than that. Aritzia’s number of U.S. stores has almost doubled in four years, contributing to the company’s rising brand awareness."
The analyst is now expecting the Vancouver-based clothing retailer to guide for fiscal 2027 revenue growth of 15-19 per cent with the mid-point representing $4.3-billion. He’s anticipating an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 17.5 per cent to 18.5 per cent, pointing to a 1-per-cent year-over-year improvement.
“We model Aritzia’s cash balance to reach $750 million at year-end, the highest level ever,” he added. “We expect the company’s cash balance to continue to increase in FY27 with expectations for strong free cash flows of ~$500 million. Aside from a potential new distribution center in the United States, we don’t expect out of the ordinary CAPEX needs in FY27. We would like to see management accelerate the company’s buyback program above and beyond the current strategy of simply offsetting the share dilutions from stock based compensation.”
Keeping his “buy” rating for Aritzia shares, Mr. Landry raised his target to $158 from $150 after increasing both his fiscal 2027 and 2028 revenue and earnings forecast. The average on the Street is $151.50.
“Aritzia has significant momentum currently as its products are well received by customers, the company has ample inventory to support heightened demand and digital marketing investments are paying off,” he said. “While this strong pace is bound to slow down at some point, comparable sales growth could stay above historical levels for several more quarters.
“Long growth runway with high ROIC. In our view, Aritzia has a long growth runway both in the United-States and internationally. In the U.S., the company operates fewer than 80 stores, only one-third to one-quarter the size of some of its peers’ networks. Internationally, Aritzia has yet to establish a brick-and-mortar presence, despite having online customers across multiple countries in Europe and Asia. As a result, we see significant opportunities for management to reinvest cash flows back into the business. With a strong ROIC above 20 per cent, these reinvestments should compound rapidly.”
Pointing to intensifying end market strength, Canaccord Genuit analyst Yuri Lynk raised his rating for shares of Toromont Industries Ltd. (TIH-T) to “buy” from “hold” previously.
“Our upgrade reflects an acceleration in data centre build-out activity that should layer on to the positive trends witnessed in Q4/2025 in mining, where orders increased 324 per cent year-over-year, and product support, which hit its highest growth rate (up 9 per cent year-over-year) in 2.5 years. We see upside to 2026 and 2027 consensus EPS estimates and would be proactively adding to positions.”
Ahead of the release of its first-quarter results on Tuesday, the analyst said “what’s happening in the data centre construction market demands our attention.”
“Year-to-date through February, data centre construction starts increased from US$1.4 billion-to US$36.9-billion, according to ConstructConnect,” he said. “Importantly, [partner AVL Manufacturing Inc.’s] new facility in Charlotte, North Carolina, will serve the data centre market in its home state and neighbouring Virginia. These two states account for 31 per cent of year-to-date data centre spending.
“Companies in the data centre construction ecosystem are doing well. nVent Electric plc (NVT-NYSE | Not Rated) set a three-year organic sales growth target between 10 per cent and 13 per cent at its March 18, 2026, investor day. Separately, on April 24, Comfort Systems USA (FIX-NYSE | Not Rated) reported Q1/2026 revenue growth of 57 per cent year-over-year to US$2.9-billion with EPS exceeding the consensus estimate by 59 per cent.”
Mr. Lynk hiked his target to $235 from $200. The average is $215.29.
RBC Dominion Securities analyst Andrew Wong thinks Aclara Resources Inc. (ARA-T) has “a strong strategic position as Western- aligned countries are determined to reduce reliance on Chinese rare earth supply, especially for heavy rare earths (HREE).”
Touting “continued progress” at its flagship Carina project in Goiás, Brazil, which he thinks was “recently validated by the Serra Verde acquisition (similar size, same locale, later stage, compared to Carina) that included a U.S. government-backed offtake including price floors,” Mr. Wong raised his rating for the Vancouver-based company’s shares to “outperform” from “sector perform” previously.
“We are encouraged by continued progress at Carina, with the recent feasibility study update confirming strong economics, with capex increased modestly 15 per cent on more refined engineering/FX while opex was mostly unchanged,” he added. “Aclara plans to start early works mid-2026 followed by full construction in 2027 after receiving regulatory approval late-2026, with first production by late-2028. In parallel, Aclara is also developing HREE separation capacity in Louisiana to ensure full value extraction from HREE production and metals processing capabilities to become vertically integrated in the pre-magnet value chain.
“HREE market heating up as market bifurcates: As U.S/.China tensions continue, HREE prices at Western benchmarks continue to climb, with EU HREE prices 3-5x compared to Chinese prices. More recently, yttrium prices have jumped to $900/kg, up from less than $10/kg through mid-2025 - yttrium is critical to advanced technologies and coatings, but has previously been overlooked with focus on magnet REEs.”
The analyst also sees the recent US$2.8-billion acquisition by Oklahoma’s USA Rare Earth Inc. (USAR-Q) of Serra Verde Group as a “validation of Aclara’s strategic value.”
“Serra Verde’s Pela Ema mine is an HREE-focused ionic clay project with a similar profile to Aclara’s Carina project and also in the State of Goias,” he explained. “The acquisition was also supported by a 15-year offtake contract with the US government with floor prices for NdPr, Dy, and TB ($110/kg, $575/kg, $2050/kg).”
Mr. Wong doubled his target for Aclara shares to $6 from $3. The average on the Street is $3.99.
“We believe Aclara’s valuation is highly sensitive to REE price assumptions and base our valuation analysis on the upside/downside scenarios,” he concluded. “We apply a 60/40 weighting to our upside/downside scenarios due to Carina’s strategic value and potential for offtakes with floor prices. We have also raised the yttrium and NdPr [neodymium and praseodymium] prices used in our upside scenario, offset by lower dysprosium to reflect recent market moves - our upside scenario basket price is 50-per-cent below spot.”
Desjardins Securities analyst Doug Young remains “underweight” on the Canadian property and casualty insurance sector heading into earnings season, citing “softening conditions in some markets, potential rotation from defence into offence and the sector being, for the most part, fairly valued (TSU is the exception).”
“CAT losses for both IFC and DFY should be in line or slightly below expectations,” he said. “Aside from a few winter storms that hit Canada and the UK, there were no significant CAT events to our knowledge and neither company preannounced CAT loss estimates.
“Canadian personal auto trends are always topical for IFC and DFY. We expect earned premium growth to be above or in line with loss cost trends. Neither company is overly concerned with potential inflationary pressures from US tariffs, and rate increases continued to be approved in Ontario in 1Q26 (albeit not to the same extent as 2025). Anything new in Alberta around the rate cap and potential reforms which are expected to come in January 2027? Ontario will also implement reforms beginning July 1, 2026—how might this impact each company’s Ontario business? Any changes in each company’s outlook?“
In a report titled Riding the cycle, Mr. Young thinks all three companies in the space can “manage through a change in the P&C insurance cycle.”
“A few points on this. (1) We expect a continued softening in large-case commercial lines; however, all three companies are somewhat insulated from this. Both IFC’s and DFY’s commercial lines exposure is weighted more toward the SME and mid-market space, and the majority of TSU’s Canadian businesses (ie surety and warranty) are outside of the typical P&C insurance cycle. (2) Could we begin to see softening in personal lines? If so, this could negatively impact IFC’s and DFY’s businesses. (3) Softer reinsurance pricing or more reinsurance capacity benefits TSU’s US Programs business (which is a consumer of reinsurance),” he explained.
He reaffirmed Trisura Group Ltd. (TSU-T) as his “top pick” in the sector, keeping his “buy” rating and $60 target. The average is $56.20.
Mr. Young tweaked his targets for the other companies. In order of preference, they are:
- Intact Financial Corp. (IFC-T, “buy”) to $300 from $305. Average: $315.67.
- Definity Financial Corp. (DFY-T, “hold”) to $73 from $75. Average: $77.33.
In other analyst actions:
* Citing stronger ammonia pricing and improved potash market indicators, Barclays’ Benjamin Theurer upgraded Nutrien Ltd. (NTR-N, NTR-T) to “overweight” from “equalweight” with a US$85 target, rising from US$80. The average on the Street is US$82.60.
“We continue to expect strength in the nitrogen segment due to the Iran conflict, leading us to upgrade NTR,” he said.
* Seeing “a promising new direction with cyclical uncertainty,” CIBC’s Scott Fletcher initiated coverage of Onex Corp. (ONEX-T) with a “neutral” rating and $135 target, which is $1 under the average.
“Following the February 2026 acquisition of specialty P&C insurer Convex, ONEX is undertaking a meaningful strategic pivot, reallocating proprietary capital out of its funds and into majority-owned operating investments. While we like the new approach, and believe that consolidating the NAV into 2-3 operating businesses can help narrow the NAV discount and accelerate NAV/share growth, adding an insurance platform in the beginning stages of a softening market introduces near-term uncertainty. We prefer to remain on the sidelines in the early stages of the pivot as Convex establishes its through-the-cycle earnings profile,” he said.
* Ahead of the release of its first-quarter results on May 8, TD Cowen’s Cherilyn Radbourne reduced her Brookfield Asset Management Ltd. (BAM-N, BAM-T) target to US$69 from US$75 with a “buy” rating. The average is US$61.27.
“Amid cautious investor sentiment on the alt managers, BAM offers a highly resilient/diversified FRE-driven earnings profile, anchored in real assets. BAM has minimal software exposure, and meaningful scale/experience in power, which enables it to offer a truly differentiated AI backbone solution. Upcoming first closes on three flagship funds offer potential catalysts,” she said.
* National Bank’s Mohamed Sidibe bumped his target for shares of Endeavour Mining plc (EDV-T) to $115 from $113 with an “outperform” rating to reflect the definitive feasibility study for its Assafou deposit on the Tanda Iguela property in Côte d’Ivoire. The average is $103.68.
“[We] view the DFS as a material de-risking milestone that supports the removal of that discount as the project advances through mining convention approval and toward FID later in 2026,” he said.
* Desjardins Securities’ Gary Ho reduced his Fiera Capital Corp. (FSZ-T) target to $6.25 from $6.50 with a “hold” rating. The average is $6.67.
“FSZ reported preliminary March AUM [assets under management] of $160.2-billion, down 2.4 per cent quarter-over-quarter. While private markets AUM rose 0.9 per cent sequentially, public markets AUM declined 3.0 per cent, partially driven by higher-than-expected redemptions and equity market volatility. Otherwise, we will look for an update on private alts new mandate pipeline, PineStone redemption and commentary on the CEO’s return to his role,” said Mr. Ho.
* While seeing its first-quarter results as “solid, particularly against the uncertain macro,” Stifel’s Daryl Young trimmed his FirstService Corp. (FSV-Q, FSV-T) target to US$200 from US$215 with a “buy” rating. The average is US$207.
“Overall, the macro remains tepid which is delaying a more fulsome re-acceleration of results, but FSV should still be able to grind out mid-single-digits growth (plus upside from tuck-ins and potential restoration storm-revenues). We view the stock as trading at a trough valuation on trough estimates,” he said.
* BMO’s Ben Pham bumped his South Bow Corp. (SOBO-T) target to $45 from $44 with a “market perform” rating. The average is $44.57.
“While we maintain our Market Perform rating on SOBO, we increase our target ... to reflect our increased confidence in proposed Prairie Connector project (i.e., revival of KXL) in the context of higher commodity prices, favorable political environment, and expectations for increasing WCSB crude production that would require additional export egress.
“Project return is expected to be attractive levering existing right of way (i.e., Cdn portion of canceled KXL and excess capacity on Cushing Marketlink), where we estimate future value of US$3.50/sh or 10-per-cent uplift,” said Mr. Pham.
* RBC’s Christopher Dendrinos trimmed his Westport Fuel Systems Inc. (WPRT-Q, WPRT-T) target to US$1.75 from US$2 with a “sector perform” rating. The average is US$6.50.
“Focus continues to be on cash burn, cost management, liquidity, and growth opportunities now that the business is smaller and more focused. The company should benefit from new lower-cost production this year, following the facility change over in 4Q25. WPRT reaffirmed its strategy to capitalize on commercial opportunities in key markets for hydrogen and for NG heavy-duty transport. We think proof points of growth are needed in addition to the self-help initiatives,” he said.