Inside the Market’s roundup of some of today’s key analyst actions
Scotia Capital analyst Mike Rizvanovic thinks Canada’s large banks showed their “resilience yet again” during the recently completed second-quarter earnings season.
He says their performance came “in the face of mounting macroeconomic headwinds, with an across-the-board EPS beat that featured an expected boost from market-sensitive businesses, but also included solid gains in fee-based revenue more broadly, signs of a pickup in loan volumes, and further evidence that credit costs remain very manageable at this stage of the credit cycle.”
Accordingly, he says he continues to have “a positive bias” on the group’s earnings per share trajectory through fiscal 2027, despite acknowledging “stretched valuation multiples that we believe limit any meaningful share price upside.”
“As of 5/28/2026, the large Canadian banks traded at an average P/E multiple of 14.2 times (market cap-weighted), which is well above the group’s 10-year historical average of 11.2 times,” he said. “We acknowledge that valuation multiples have become stretched, reflecting a lot of positives in the near-term outlook and suggesting that consensus EPS estimates are still too low. We believe that current market dynamics are still favorable for the group, making it possible for further upward EPS revisions in the quarters ahead, which we believe will help keep valuation multiples well above historical levels for the time being, particularly with credit costs still looking to be very manageable. Having said that, we see only limited upside potential to share prices and risk skewed to the downside, as reflected in our revised target prices, which imply relatively modest total returns in the high-single-digit range (inclusive of dividends).”
In a client report released before the bell, Mr. Rizvanovic upgraded Bank of Montreal (BMO-T) to “sector outperform” from a “sector perform” recommendation.
“Our rating change is premised on (1) strong potential lending volume upside in the U.S. with optimization now complete and the bank actively expanding within its targeted footprint in California; (2) clear momentum in the bank’s ROE trajectory, which improved to 13.5 per cent this past quarter, making the 15-per-cent target (exiting F2027) appear more achievable; and (3) higher upside potential on EPS growth, driven largely by momentum in the U.S. business,” he said.
The analyst’s target for BMO shares rose to $234 from $209. The average target on the Street is $229, according to LSEG data.
Conversely, Mr. Rizvanovic downgraded Canadian Imperial Bank of Commerce (CM-T) to “sector perform” from “sector outperform” with a $155 target, falling from $159 and below the $160.81 average.
“While we still have a favorable view on CM’s medium-term outlook, we believe that the bank’s roughly 2-year stretch of consistent outperformance relative to peers is set to moderate in the quarters ahead given: (1) diminishing NIM upside, which had been a material catalyst for CM; (2) a bit more potential downside risk in the Capital Markets business as CM’s growth since F2024 has been the most outsized; and (3) more exposure to the lending market in Canada, which we believe will trail growth rates in the U.S. through our forecast period,” he explained.
The analyst made these other target adjustments:
- EQB Inc. (EQB-T, “sector perform”) to $125 from $122. Average: $121.
- Royal Bank of Canada (RY-T, “sector outperform”) to $275 from $252. Average: $275.05.
- Toronto-Dominion Bank (TD-T, “sector outperform”) to $165 from $150. Average: $160.45.
Following first-quarter earnings season for Canadian pipeline, utility and energy infrastructure companies, National Bank Financial analyst Patrick Kenny continues to see “strengthening” macroeconomic tailwinds, “namely the intensified spotlight on North American energy security/reliability.”
“Over and above heightened WTI price volatility during the U.S./Iran war, the three-month (and counting?) disruption of the Strait of Hormuz is having a structural impact on trade flows and investor sentiment surrounding North America’s role in delivering global energy security and reliability,” he said.
“This comes at a time when domestic support for pipeline egress is picking up steam, bringing 1.0 mmbpd [million barrels per day] of medium-term expansions into focus (ENB up 250 mbpd [thousand barrels per day] MLO2; TMX up 300 mbpd; SOBO up 450 mbpd Prairie Connector), while the longer-term over 1.0 mmbpd West Coast pipeline is to be submitted to the Major Projects Office by July 1, 2026, following the Government of Canada’s recent implementation agreement. On the natural gas front, heightened global security of supply concerns also amplify market demand for Canada’s over 6.0 bcf/d of potential LNG projects off the West Coast.”
Mr. Kenny also emphasized the impact of the surge in power demand related to data centre construction.
“We continue to expect the sanctioning of 1.2 GW of Phase I Alberta data centre capacity (Greenlight, Keephills) over the near term, as well as implementation of the AESO’s Phase 2 large load allocation process (’bring your own generation’) on the back of the Government of Canada and Alberta providing clarity on Alberta’s long-term carbon pricing under TIER, maintaining the Clean Electricity Regulations (CER) in abeyance while the constitutional reference and any appeals proceed (i.e., Alberta gas-fired plants will not be forced to achieve net-zero by 2035),” he said. “More broadly, we continue to observe hyperscalers prioritizing speed-to-power, positioning natural gas and behind-the-fence generation solutions as supporting North America’s ability to compete for global AI-related infrastructure projects.”
In a client report released before the bell, Mr. Kenny adjusted his valuations for companies in his coverage universe to reflect this bullish view, while touting a “Strait up premium for energy security.”
“Even if and when blockages on the Strait of Hormuz are lifted, we believe the global trade diversification train has left the station, with North America’s energy infrastructure companies benefitting from rising international demand for reliable and affordable energy exports, while presenting a generational opportunity for Canada to reach its potential as an energy superpower,” he said. “As such, on the heels of ourAnnual Canadian Energy Infrastructure Conference, we are reducing our equity risk premiums embedded in our cost of equity assumptions by 100 bps on average across our coverage list (i.e., increasing our EV/Free-EBITDA valuation multiples by 1.0 per cent), with our target prices moving up approximately 11 per cent.”
Mr. Kenny continues to see “attractive” entry points for his unchanged top picks for the year ahead, which are:
* AltaGas Ltd. (ALA-T, “outperform”) with a $60 target, up from $52. The average target on the Street is $55.62, according to LSEG data.
* Capital Power Corp. (CPX-T, “outperform”) with an $82 target, up from $75. Average: $84.07.
* Gibson Energy Inc. (GEI-T, “outperform”) with a $33 target, up from $30. Average: $30.50.
* Rockpoint Gas Storage Inc. (RGSI-T, “outperform”) with a $35 target, up from $32. Average: $32.
* TC Energy Corp. (TRP-T) with a $102 target, up from $92. Average: $96.24.
His other target revisions are:
- Atco. Ltd. (ACO.X-T, “sector perform”) to $69 from $62. Average: $72.80.
- Brookfield Infrastructure Partners LP (BIP-N/BIP.UN-T, “outperform”) to US$43 from US$38. Average: US$43.73.
- Canadian Utilities Ltd. (CU-T, “sector perform”) to $51 from $46. Average: $49.17.
- Emera Inc. (EMA-T, “sector perform”) to $75 from $69. Average: $78.81,
- Enbridge Inc. (ENB-T, “sector perform”) to $81 from $73. Average: $79.62.
- Fortis Inc. (FTS-T, “sector perform”) to $82 from $75. Average: $79.72.
- Hydro One Ltd. (H-T, “sector perform”) to $61 from $56. Average: $58.83.
- Keyera Corp. (KEY-T, “sector perform”) to $56 from $50. Average: $59.64.
- Pembina Pipeline Corp. (PPL-T, “outperform”) to $71 from $63. Average: $67.
- South Bow Corp. (SOBO-N/SOBO-T, “sector perform”) To US$35 from US$31. Average: US$33.31.
- Superior Plus Corp. (SPB-T, “sector perform”) to $8.50 from $7.50. Average: $8.93.
- TransAlta Corp. (TA-T, “outperform”) to $24 from $22. Average: $24
- Tidewater Midstream and Infrastructure Ltd. (TWM-T, “sector perform”) to $17 from $15. Average: $14.83.
Seeing it “organically outperforming its U.S. storage peers in a challenging North American housing market, Raymond James analyst Brad Sturges upgraded StorageVault Canada Inc. (SVI-T) to “strong buy” from “outperform” previously.
“Since mid-2015, StorageVault has generated average quarterly SP-NOI [same-property net operating income] growth of 9.5 per cent year-over-year, or 390 basis points above the U.S. storage peer average of 5.6 per cent,” he said. “In 2025 and 2026 year-to-date, StorageVault’s SP-NOI growth has recently recovered back to a quarterly average of 4.5 per cent year-over-year, or 450 basis points above the U.S. storage peer average. StorageVault’s recent SP-NOI growth year-over-year reflects same-store revenue growth in the 4-7-per-cent range year-over-year, while its SP-NOI margin has been stable year-over-year at 69 per cent.”
In a client report released Monday, Mr. Sturges said his upgrade to the Toronto-based company is based on three main factors: “1) NAV/share discount and improved relative P/AFFO multiple valuation; 2) above-average SP-NOI and AFFO/share growth prospects; and 3) greater private market M&A activity in the Canadian storage sector that validates a higher NAV/share estimate.”
“Institutional investor interest remains strong for direct Canadian storage real estate, as illustrated by recent larger portfolio transactions executed by large, reputable buyers in key Canadian urban markets,” he added. “Notable portfolio transactions in Vancouver, Montreal, and Ontario have been executed by larger institutional investors such as QuadReal Property Group and Brookfield occurred at valuations (going-in cap rate: less than 5 per cent) well above StorageVault’s implied trading valuation (cap rate: more than 6 per cent).
His target for the company’s shares slid to $5.25 from $5.50, which is below the $5.75 average on the Street.
“After outperforming its U.S. storage peers by 29 pp on average in 2025, StorageVault’s relative total return performance has reversed in 2026 year-to-dare (at May-29), as StorageVault has relatively underperformed its US storage peers by 27 pp. While StorageVault’s total return performance last year benefited from increased private market Canadian storage M&A activity, the total return performance in 2026 year-to-date for the company’s U.S. storage peer group has been supported by Public Storage’s pending takeout offer for National Storage Affiliates Trust (NSA) earlier this year. Currently, StorageVault trades at a substantial NAV/share discount, versus a slight historical NAV/share premium. StorageVault’s P/AFFO multiple versus its US storage peers has also contracted to an ~0.5x turn premium, versus a long-term historical P/AFFO multiple premium average of approximately 6 times,” he concluded.
When Dollarama Inc. (DOL-T) reports its first-quarter fiscal 2027 results on June 11, National Bank Financial analyst Vishal Shreedhar expects the discount retailer to see the benefits of improving same-store sales growth while near-term investments, particularly in Australia, may limit earnings expansion.
“Our forecast of sequentially higher sssg (Q4/F26 was 1.5 per cent; 3.5-per-cent adjusted for the calendar shift) largely reflects positive article price inflation and a recovery from unfavourable weather last quarter, among other factors,” he said. “Our price checks of items suggest like-for-like article price inflation of 1.6 per cent year-over-year. Further, our analysis suggests a higher mix of $4-$5 articles (4 per cent year-over-year, largely within consumables), which may contribute to higher aggregate article inflation.
“Our data suggests that sssg accelerated quarter-over-quarter. Recall, DOL noted:“...Towards the end of fiscal 2026, we started seeing some price increases from the domestic side, which will trickle into fiscal 2027.”(3) Our review of peer commentary suggests: (i) consumer spending remains focused on value, (ii) competitive environment is intense, yet rational, and (iii) higher growth in younger and more affluent consumer cohorts within discount retailing."
Mr. Shreedhar is now projecting earnings per share of 99 cents, which is a penny less than the consensus on the Street but 4 cents higher than the same period a year ago. He attributes that 4-per-cent year-over-year gain to “(i) 4.0-per-cent sssg, (ii) net new store openings (73 year-over-year), (iii) share buybacks, and (iv) 24-per-cent year-over-year higher Dollarcity contribution.”
“These factors are expected to be partly offset by: (i) 230 basis points lower EBITDA margin at 29.6 per cent, largely reflecting a lower margin contribution in Australia, (ii) higher D&A, (iii) higher interest expense, and (iv) a higher tax rate,” he added.
Reaffirming his “outperform” rating for Dollarama shares, Mr. Shreedhar raised his target to $203 from $198. The average is $205.41.
“We hold a positive view on DOL reflecting a stable, high return on capital international growth story supported by strong cash flows, a solid balance sheet and resilient sales performance,” he said. “While near-term investments are elevated, we expect DOL to execute effectively on improvement initiatives over time, consistent with its track record of disciplined conservatism and success in international markets.”
Following better-than-expected first-quarter results and a “positive” update to its guidance, Desjardins Securities analyst Benoit Poirier is “encouraged” by BRP Inc.’s (DOO-T) “balance sheet, premium positioning and supportive trends.”
The Valcourt, Que.-based recreational vehicle manufacturer reported quarterly revenue of $747-million, exceeding the Street’s expectation of $736-million and at the top of its guidance range of $710-million to $750-million. Adjusted basic earnings per share of 36 cents fell under the consensus of 44 cents despite a 30-per-cent year-over-year jump in sales.
Seeing “modest growth” in fiscal 2027, BRP now expects the company to generate normalized earnings before interest, taxes, depreciation and amortization of $925-million to $975-million this fiscal year, compared to a previous forecast at the end of March of between $1.18-billion to $1.28-billion.
“We are not concerned about the softer-than-expected 2Q FY27 guided EPS, as it is primarily driven by timing factors rather than underlying demand weakness,” he said. “Specifically, the outlook reflects lower PWC shipments delivered earlier in 1Q, combined with the full tariff impact as mitigation factors are going to have a positive impact only in 2H. We therefore model margins of 4.3 per cent for 2Q and 10.3 per cent for the full year.
“Underlying trends remain strong. BRP’s premium mix continues to be supported by an affluent customer base more insulated from inflation and fuel price volatility. Management highlighted continued retail momentum, especially in ORV, and strong snowmobile pre-orders, and stated that May retail was positive on a consolidated basis, with both ORV and personal watercraft up. It emphasized that pricing is a minimal component of the mitigation strategy and does not expect any significant pricing actions. We model revenue growth of 6.6 per cent for 2Q and 9.1 per cent for the full year.”
Also emphasizing share buybacks are “back on track,” Mr. Poirier raised his target for BRP shares to $103 from $97, keeping a “buy” rating, after increased his revenue and earnings expectations through fiscal 2029. The average on the Street is $95.11.
Toronto-based Minera Alamos Inc. (MAI-X) “has emerged from a significant organizational and financial restructuring with a clean capital structure and clear multi-year growth roadmap,” according to National Bank Financial analyst Rabi Nizami.
“The start of construction at Copperstone marks an important milestone which puts the company back in position to execute and demonstrate its mine-building capabilities,” he added. “We model consolidated production scaling quickly from 35 koz in 2026 to more than 150koz/yr through a series of low-cost mine builds, starting with Copperstone (46 koz/yr; mid-2027 ramp up), Goldrock (40 koz; 028), followed by Cerro de Oro (55-60koz).”
In a note released before the bell, Mr. Nizami updated to his model for the Toronto-based junior miner to reflect several developments over the past week, including the close of a US$75-million credit facility and a US$45-million initial drawdown, elimination of gold prepays and call options, adoption of U.S. dollar reporting, and a pre-feasibility study and fully-funded construction go-forward decision at its Copperstone project in La Paz County, Arizona.
“We have adopted the Copperstone PFS mine plan, with first production now in Q3/27 (was Q1/27), adding 42 koz/yr at US$1,430/oz LOM AISC [life-of-mine all-in sustaining cost] (was 38koz/yr at US$1,546), opex conservatively 15 per cent higher and initial capex in line with the study,” he said. “In addition, we have incorporated a US$80-million NAV credit for300 koz of M&I resources that were not captured in PFS reserves, reflecting optionality for potential open pit mining. We model a restructured balance sheet with initial capex for Copperstone fully funded, supported by the credit facility plus cash flows from the operating Pan mine which is now fully exposed to gold prices going forward.”
Maintaining his “outperform” rating for Minera Alamos shares, Mr. Nizami raised his target by $1 to $9.50, matching the average, “in recognition of the company entering an execution and de-risking phase with the construction of Copperstone now underway.”
In other analyst actions:
* In response to its first-quarter results, Canaccord Genuity’s Jeremy Ho upgraded Wesdome Gold Mines Ltd. (WDO-T) to “buy” from “hold” with a $31 target, up from $30 and 20 cents above the higher on the Street.
“Model changes were modest, with the target price increase primarily reflecting our quarterly roll-forward, which increased our NTM [next 12-month] EBITDA estimate (50-per-cent weighting in our target price framework),” said Mr. Hoy. “At current levels, our revised target implies an 18% return, supporting our rating upgrade. We continue to forecast average annual production of 187 koz over the next five years at US$1,632/oz AISC, generating average free cash flow yields of 14 per cent. Per [Friday’s] Daily Gold Update, shares trade at 3.1 times 2027 estimated EBITDA (vs. junior peers at 4.2 times) and 0.89 times NAV (above junior peers at 0.42 times, but broadly in line with WDO’s three-year historical average).
“While our overall view of the company is largely unchanged, we believe the shares have already reflected the impact of last year’s guidance revisions, with risk increasingly skewed to the upside, particularly ahead of upcoming technical reports and reserve/resource updates for Kiena and Eagle River.”