Inside the Market’s roundup of some of today’s key analyst actions
While noting CAE Inc.’s (CAE-T) long-term targets came in below the Street’s expectations, RBC Dominion Securities analyst James McGarragle is “constructive on the long-term opportunity” for the Montreal-based company, calling its objectives for fiscal 2030 “achievable.”
“Fiscal 2027 will be a transition year, and visibility into the pace of execution is limited — we wanted to probe management on what tangible proof points investors should expect to see throughout FY27, but were unable to get that question in on the call [with analysts],” he said. Without a clearer read on how execution tracks in FY27, we struggle to identify what drives the stock in the near term."
Alongside Thursday’s post-market release of fourth-quarter 2026 results that fell under forecasts, CAE, , which builds flight simulators and trains military and commercial pilots, announced 2023 segment operating income (SOI) of $950-million to $1-billion. That was below both Mr. McGarragle’s estimate of $1.105-billion as well as the consensus projection of $1.004-billion.
CAE warns conflict in Middle East could continue to batter earnings
“Investor feedback ahead of the print suggested the buy-side was positioned even more bullishly, and the targets were met with broad disappointment,” the analyst said. “That said, we view the guide as deliberately conservative. Management was explicit on the call that the targets embed meaningful execution risk and reflect a cultural reset. Given these dynamics, we are comfortable with our updated adjused SOI estimate of $1.007-billion, just outside the high end of the guided range. On FCF, we continue to flag that the 100-per-cent cumulative cash conversion target excludes lease liability principal payments ($61-million in FY26) and SBC, both of which we deduct in our own FCF calculation.”
“Management framed FY27 as a deliberate year of reset, with margins and earnings suppressed by transformation-related cost inefficiencies and underutilization from expected customer attrition. The adjusted EPS guidance of $1.00 to $1.07 (stripping out the $0.21 amortization add-back under the updated definition) fell below our estimate ($1.11) and the Street ($1.22). Civil revenue guidance of flat-to-slightly-down and Defense mid-single-digit growth compared to our prior estimates of negative 9 per cent and up 7 per cent year-over-year, respectively, with Civil softness driven by soft market conditions, mainly Middle East disruptions, and Defense supported by structural A&D spending tailwinds. Overall, F27’s guidance reinforces our view that CAE is lacking near-term catalysts, with profitability remaining compressed through the network rationalization and transformation execution period.”
While he raised his 2027 earnings per share estimate to $1.21 (from $1.11), which includes a 20-cent benefit from CAE’s new amortization adjustment, Mr. McGarragle reduced his target for the company’s shares to $36 from $42 to reflect a lower 2030 expectation as well as to reflect “increased market and execution risk,” keeping an “outperform” rating. The average on the Street is $46.79.
“CAE shares appear the most expensive in our coverage group, trading at approximately 25 times FY27 consensus EPS,” he said. “While CAE’s premium valuation is justified by strong defence demand tailwinds, near-term catalysts appear limited in our view especially given a weaker demand environment in Civil.
“Aircraft OEM supply constraints remain a challenge, impacting airline pilot hiring and associated training activities. Macroeconomic pressures could hinder growth with the near-term conflict in Middle East adding additional volatility. That said, we see potential upside to our forecasts if pilot training recovers sooner than anticipated and/or defence margins exceed guidance expectations.”
Elsewhere, others making changes include:
* National Bank’s Cameron Doerksen to $49 from $53 with an “outperform” rating.
“The market is clearly underwhelmed by CAE’s F2027 guidance and while the long-term financial targets are within our range of expectations, the timeline to reaching (4-years to F2030) is more extended than we would have hoped,” said Mr. Doerksen. “However, while CAE will not benefit from any earnings-driven catalysts in the next several quarters, we believe patient investors will be rewarded over the longer-term as industry fundamentals remain supportive, and we are confident that margins and FCF can meaningfully improve over the longer-term.”
* Desjardins Securities’ Benoit Poirier to $48 with a “buy” rating.
“While the market was disappointed with the cautious FY30 outlook, we do not believe it changes the investment case. This is not a broken stock: the FY27 air pocket is less severe than feared and CAE emerges as a cleaner story with reset expectations. Back-solving EPS under the FY30 framework still points to more than $2.00, broadly in line with our view, suggesting the earnings algorithm is intact (100-per-cent conversion driving $2-billion in FCF, supporting buybacks), with upside if Civil outperforms the conservative assumptions,” said Mr. Poirier.
* TD Cowen’s Tim James to $43 from $49 with a “buy” rating.
“The extent of earnings pressure from commercial training and equipment demand combined with transformation program costs and inefficiencies is greater than expected. We believe this could weigh on share price short-term but anticipate strong cyclical backdrop for both commercial air travel and defense will regain investor focus late in 2026. Pending excess capital could also provide a catalyst,” said Mr. James.
* BMO’s Fadi Chamoun to $47 from $50 with an “outperform” rating.
“With expectations reset, solid Civil and Defense fundamentals, and a clear path to improved execution, profitability, and FCF generation, we see an attractive risk/reward, supporting a $47 near-term target and $59 medium-term upside, with recent weakness presenting a compelling buying opportunity,” said Mr. Chamoun
Following last week’s release of its fourth-quarter fiscal 2026 results, Scotia Capital analyst Kevin Krishnaratne is expecting “stronger trends” in the second half of the calendar year from Lightspeed Commerce Inc. (LSPD-N, LSPD-T).
“LSPD’s Q4 featured several positives including the 4th consecutive quarter of growth engine location adds acceleration, with the company’s revamped G2M [go-to-market] efforts appearing to be gaining traction, and SSS across geos & verticals now firmly positive,“ he explained. ”We’ve updated our forecasts to reflect slightly better GTV & GPV trends, which drives our Transaction revenue assumptions higher. On the other hand, subscription trends were softer than anticipated (6-per-cent growth vs. our 7-per-cent [estimate] and in line with Q3), with a sharper deceleration in growth engine markets (9 per cent vs. 13 per cent in Q3), leading us to now model a more gradual ramp in subscription growth that sees strength more 2H weighted.
“Stepping back, Q4 was essentially in line, with F27 guide on revenue/GP introduced ahead of our estimates. LSPD’s weak share price performance off of the print was sharper than we expected, though we acknowledge the tough market backdrop for perceived non-AI tech stocks. We look forward to stronger trends in 2H, but for now see shares likely remaining more rangebound near-term.”
Mr. Krishnaratne emphasized the Montreal-base company’s “growth engine momentum continues” and recommends investors also monitor its software growth.
“Growth engine locations grew 11 per cent year-over-year to 97K (up 3,200 quarter-over-quarter), marking the fourth consecutive quarter of acceleration,” he explained. “Total locations reached 150K and ARPU [average revenue per user] rose 10 per cent year-over-year to $602. Management expects location growth to remain in the 10-15-per-cent CAGR [compound annual growth rate] range in F27, supported by the now fully ramped 150-person outbound team and expanding European field sales. LTV-to-CAC on outbound is the best of any motion in the company, and the vast majority of adds are new logos.
“That said, software revenue growth in the growth engines decelerated to 9 per cent year-over-year(from 13 per cent in Q3), impacted by lapping prior-year price increases and the continued focus on annual contracts. While this creates a short-term headwind, it drives lower churn and higher LTV [lifetime value]. Management pointed to the new CRO’s focus on cross-sell/upsell, expanded channel strategies, and a strong product cadence as catalysts for improvement.”
Maintaining his “sector perform” rating, the analyst trimmed his target to US$10 from US$12. The average is US$12.52.
Elsewhere, other changes include:
* BMO’s Thanos Moschopoulos to US$12 from US$13 with an “outperform” rating.
“LSPD introduced Q1/27 and FY2027 revenue guidance, which were in line, in our view, when adjusting for Upserve (we believe there may have been some confusion on this front as consensus hadn’t reflected the divestiture),” said Mr. Moschopoulos
“We’re encouraged by the accelerating revenue and location growth that LSPD is demonstrating within its core markets, which now represent 75 per cent of its revenue mix, and continue to view valuation as attractive.”
* CIBC’s Todd Coupland to $25 (Canadian) from $30 with an “outperformer” rating.
“Lightspeed’s Q4 was largely in line, but softer Q1/F2027 guidance pressured the shares. The more important takeaway, in our view, is that the medium-term setup improved: F2028 gross profit, EBITDA margin, and free cash flow targets moved above Street expectations, the portfolio is cleaner post-Upserve, and growth engines now account for 75 per cent of revenue with a path to 80 per cent by the end of F2027,” said Mr. Coupland.
National Bank Financial analyst Shane Nagle said a recent visit to Agnico Eagle Mines Ltd.’s (AEM-T, AEM-N) Meliadine operation and Hope Bay project in Nunavut highlighted notable growth opportunities in Canada’s North.
“With the approved development of Hope Bay, Agnico Eagle will have three operating mines in Nunavut, including Meliadine, Meadowbank and Hope Bay - collectively accounting for 18 per cent of our overall project NAV of the Company,” he said in a client note. “Agnico Eagle has been operating in the region for over 18 years and its operations currently represent 25 per cent of the total GDP of the Territory, with mining activities in total accounting for 47 per cent of the region’s total GDP.
“We model 390 koz of production from Meliadine in 2026 (within the range of Company guidance), representing 11 per cent of Agnico Eagle’s consolidated production. With throughput to average 6,750 tpd by early 2027, subsequent expansion to 7,000-7,500 tpd in the future is being targeted through the addition of a fourth mine at the operation. The Company’s vision is for production at Meliadine to ultimately average 500,000 oz/yr of production. We currently model a remaining 12-year mine life at Meliadine, with production averaging 325,000 oz/yr over that period.”
In a client report released before the bell, Mr. Nagle incorporated results of Agnico’s Hope Bay Preliminary Economic Assessment, which was released last week, and now projects US$2.4-billion of initial capital costs, leading to a “modest” reduction in his net asset value per share assumption.
“We continue to model incremental resource conversion supporting an 18.5-year mine life, compared with the 11-year stated mine life in the PEA; however, we remain broadly aligned with all other key operating assumptions,” he added.
Mr. Nagle kept an “outperform” rating and $350 target for Agnico shares. The average is $357.95.
“Our Outperform rating remains based on AEM operating in low-risk jurisdictions combined with its continued strong/consistent operational performance and improving organic growth outlook,” he said.
Despite its first-quarter results falling under expectations, Desjardins Securities analyst Kyle Stanley continues to see Canadian Net Real Estate Investment Trust (NET.UN-X) “well positioned to execute on external growth.”
“[Debt to gross book value] decreased 50 basis points quarter-over-quarter to 54.0 per cent, the lowest level since early 2022,” he said. “Management estimates NET has $12-million of acquisition capacity within the existing equity base, and upward of $40–45-million with near-term mortgage refinancing/up financing opportunities, which we estimate would take leverage back up to the high-50-per-cent range.
“While management is optimistic about its acquisition pipeline, we continue to believe a more defined capital recycling program could allow for a more substantial portfolio high-grading and deleveraging opportunity.”
On May 21, the Montreal-based REIT, which focuses on single tenant triple net and management-free domestic retail properties, reported quarterly funds from operations per unit of 16.6 cents, up 0.9 per cent year-over-year but below both Mr. Stanley’s 17.3-cent estimate and the consensus projection of 17 cents. He attributed the miss a drop in net operating income linked to seasonality from rents accrued.
“Total portfolio occupancy remained stable in 1Q26 at 100 per cent and NET has renewed 99.9 per cent of expiring NOI from its 2026 lease maturities at an average spread of 6.5 per cent,” he added. “Management has also already renewed 19 per cent of expiring NOI related to the 2027 leasing program at an average spread of 2 per cent; that said, the average spread on full-year 2027 lease maturities is expected to be 5–7 per cent, largely consistent with the last couple of years.
“Our revised forecast has FFOPU growth moderating to 3 per cent in both 2026 and 2027, from 9 per cent in 2025, but excludes any speculative acquisition activity which would provide upside to our numbers.”
While investors were “rewarded” with a 3-per-cent distribution increase (to 36 cents from 35 cents), Mr. Stanley kept a “hold” rating and $6.50 target after narrowly reductions to his FFO expectations. The average on the Street is $6.75.
“NET’s total return of 15.9 per cent year-to-date (vs non-sponsored retail peers at 16.9 per cent) has it trading near its recent peak FFO multiple of 9.1 times and largely in line with its 9.6 times long-term average which, combined with a tighter NAV discount (4 per cent vs LTA of 8 per cent), keeps our Hold rating intact,” he noted.
In other analyst actions:
* Seeing “multiple verticals” enhancing its backlog and margin expansion, BMO’s John Gibson raised his Bird Construction Inc. (BDT-T) to $70 from $60, keeping an “outperform” rating, after meetings with the company’s management team. The average on the Street is $59.86.
“Overall, we expect multiple verticals to drive backlog and margin growth into 2027 and beyond. Post update, we are increasing our target price to $70 ($60 prior),” said Mr. Gibson. “Admittedly, the opportunities in front of Bird continue to be larger than expected (most notably on the data centre front).”
* Citing elevated expense levels and hardware cost pressures, Jefferies’ Samad Samana lowered his price target on Constellation Software Inc. (CSU-T) to $3,185 from $3,500, keeping a “buy” rating. The average on the Street is $3,919.29.
* Scotia’s Ben Isaacson cut his Lithium Americas Corp. (LAC-N, LAC-T) target to US$4.50 from US$5, keeping a “sector perform” rating. The average is US$6.08.
“We have reduced our PT to $4.50, following LAC’s Q1 update, which included a sell-side call with management,” he said. “First, mechanical completion of Thacker Pass Phase 1 (TP1) is on track for completion in late ‘27, with ramp to 40k mt LCE in ‘28. Recent construction progress includes 95% engineering design completion, 70-per-cent procurement completion, significant progress on long lead-time equipment arrival to site, as well as the start of equipment installation. Second, LAC has undertaken a definitive capex estimate, due out in 2H. Higher capex is now a reality, driven by general inflation, U.S. tariffs, and now the ripple effect of the Iran war. On this point alone, LAC’s NAV must move lower, all else equal. Third, equity dilution is also a reality, and risks moving LAC’s NAV lower as well, at least based on our modeling of the ATMs + financing scenarios for project completion. Finally, and based on the above, our LAC NAV10% and PT move to $4.50/sh. In the absence of higher-for-longer LCE pricing, it’s tough to see why LAC should outperform near-term. Both capex and share count are likely moving higher, while the stock is already trading slightly ahead of our revised NAV. Accordingly, we maintain a Sector Perform rating."
* ATB Cormark’s Nicholas Boychuk hiked his 5N Plus Inc. (VNP-T) target to $56.50 from $45 with a “top pick” rating. The average is $36.50.
“We visited VNP’s St. George, Utah, facility last week. We needed to learn more about this part of VNP after the U.S. Department of War (DoW) granted the company $18.1-million to expand capacity and, like our site visits across Germany last year (recap note here), we left this tour with greater confidence in the outlook. VNP’s St. George facility is incredibly well positioned in global supply chains and is only beginning to capture this value. The team also exemplified a rare level of expertise and institutional knowledge that will further defend the moat. Some of the growth dynamics we discuss in this note like space-based data centres will take time to materialize in financial results, but our view is that further upside in the share price from here is all but assured. We’re maintaining our Top Pick rating and increasing our price target,” said Mr. Boychuk.