Inside the Market’s roundup of some of today’s key analyst actions
While its fourth-quarter 2024 results were “mixed,” RBC Dominion Securities analyst Maurice Choy thinks Emera Inc.’s (EMA-T) near-term rate base as well as earnings and dividend per share growth trajectories” remain very much intact, with evidence that risks have also reduced (e.g., approval of its storm restoration cost recovery request; S&P’s outlook revision to Stable).”
“Ahead, there is more to look forward to, from further derisking via the closing of the NMGC sale in October, to the delivery of Emera’s organic 7-8-per-cent rate base CAGR [compound annual growth rate] plan that is centered on the favourable Florida jurisdiction,” he said.
“Near-term outlook reaffirmed. Following the company’s December 2024 Investor Day, Emera has maintained its $20 billion capital plan for the 2025-2029 period, which supports a 7-8-per-cent rate base CAGR, and its expected 1-2-per-cent annual dividend growth rate through 2027, with the goal of lowering the payout ratio to around 80 per cent by the end of 2027. The company also reiterated its 5-7-per-cent EPS CAGR through 2027, which anticipates 2027 EPS to be in the range of $3.43-3.63, assuming a $1.35 USD/CAD exchange rate.”
Shares of the Halifax-based company rose 1.9 per cent on Friday after it reported headline quarterly earnings per share of 84 cents, exceeding the 76-cent estimate of both Mr. Choy and the Street. He attributed the beat to a number of tax matters within the NSPI and Corporate segments.
“We note that adjusted earnings contributions from Emera’s regulated utilities increased by 6 per cent year-over-year in 2024, despite the impact of lost earnings from the sale of the LIL [Labrador-Island Link],” he said. “Ahead, with its newly introduced 2025 segment outlook ), and recent USD/CAD exchange rate strength (every +/- $0.05 change in the rate equates to a +/- $0.05 change in 2025 EPS), management expects 2025 EPS to grow stronger than its 5-7-per-cent three-year CAGR outlook.”
After raising his 2025 EPS forecast to $3.21 (from $3.15) to reflect more favourable FX rate assumptions, Mr. Choy increased his price target for Emera shares to $63 from $60, reiterating an “outperform” recommendation. The average target on the Street is $57.82.
“Our updated price target uses a higher 19 times forward P/E valuation multiple (previously 18 times), reflecting the supportive growth environment across the company’s electricity and gas utilities,” he said.
Elsewhere, others making changes include:
* Raymond James’ to Theo Genzebu to $59 from $57 with an “outperform” rating.
“We maintain our constructive view on Emera — a function of the company’s premium regulated footprint, discounted valuation, and strong rate base growth,” said Mr. Genzebu. “With asset sales bringing EMA’s credit metrics essentially in line with required levels, new rates at TEC, and the securitization of fuel costs, we believe this overhang is largely addressed, and the stage is set for the stock’s valuation to reflect its solid fundamentals. We are increasing our target price ... reflecting this.”
* CIBC’s Mark Jarvi to $59 from $58 with an “outperformer” recommendation.
“The Q4 update affirmed our view that EMA is on better financial footing and should deliver stronger earnings in the next few years vs. prior results. EMA management confirmed our view that year-over-year EPS growth in 2025 should exceed the 5-7-per-cent medium-term target. Further, continued balance sheet de-risking (e.g. closing of the NMGC sale in H2/25) should allow EMA to achieve key credit metric thresholds and Moody’s should remove its negative outlook, while also allowing EMA to avoid near-term ATM usage. Overall, EMA is on a better trajectory, which has allowed it to narrow the valuation gap with peers. We believe the momentum can continue,” said Mr. Jarvi.
* BMO’s Ben Pham to $60 from $58.
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Citi analyst Alexander Hacking thinks “there is a lot to like” about the new Teck Resources Ltd. (TECK.B-T), however he emphasized the firm remains “cautious” on copper in the near term, leading him to “prefer the more idiosyncratic coppers,” including Ivanhoe Mines Ltd. (IVN-T) and First Quantum Minerals Ltd. (FM-T).
“We update our Teck model following 4Q results with minimal changes,” he said. “Investor focus continues to be on the QB2 ramp-up with the company confident in 2025 targets. Throughput & recoveries were both at design levels by year end (note: 87-per-cent recoveries in Nov-Dec vs design 86-92 per cent).”
In a note released Monday, Mr. Hacking raised his 2025 EBITDA estimate by 5 per cent to $3.7-billion (based on $4.08 per pound copper), while he cut his 2026 forecast by 1 per cent to $5.2-billlion ($4.54/lb).
“Bull Case — Teck is a simpler company today operating only four mines (plus a minority stake in Antamina) & this should help to tighten up on execution; 12M dividends & buybacks will total 10 per cent of market cap funded by coal proceeds; Zafranal and QB Optimization can deliver 25-30-per-cent near-term, low capex-intensity, copper growth; There is an implicit M&A put option, in our view (i.e. miss on execution and potential buyers will be pitching ‘we can run it better’),” he said.
“Bear Case — Execution remains a ‘show me’ story following QB2 capex overruns; Highland Valley, Antamina and Red Dog all require near-term life-of-mine extensions (5-8 yrs remaining) which will eat into FCF & leaving a lot riding on performance at QB; M&A is complicated by the controlling structure (until 2029) and maybe the Canadian government; Citi is ST cautious on copper given trade tensions.”
Mr. Hacking reiterated a “neutral” rating and $68 target for Teck shares. The average on the Street is $71.72.
“We rate Teck at Neutral,” he explained. “Positive factors include exposure to copper, several interesting growth options, and a strong balance sheet. Negative factors include historical challenges on execution and a dual-class share structure. On balance, we see equal upside and downside at current levels.
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Ahead of the March 4 release of its fourth-quarter 2024 financial results, Stifel analyst Martin Landry is expecting Pet Valu Holdings Ltd. (PET-T) to continue to face notable headwinds to its growth in the near-term.
“We expect Q4/24 revenues to grow 5 per cent year-over-year, to reach $301-million vs. consensus of $292-million,” he said. “We forecast same-store-sales growth of 1.5 per cent, a sequential improvement from a decline of down 2.5 per cent year-over-year in Q3/25. However, we do not expect much changes in recent trends where customers continue to prioritize needs-based purchases over discretionary items like toys. Aside from same-storesales growth, revenues should be boosted by store openings and increased wholesale revenue. We forecast adjusted EBITDA margin to compress 270 bps year-over-year, to 22.2 per cent due to promotional investments, higher distribution and occupancy costs from new DCs and a higher wholesale mix. This translates to a Q4/24 EBITDA estimate of $66.8-million, down 6 per cent year-over-year and slightly higher than consensus of $64.6-million. Our Q4/24 EPS estimate of $0.41 represent the highend of the company’s 2024 EPS guidance which implies a Q4/24 EPS range of $0.38-0.41.”
Maintaining his quarterly estimates, which fell in-line with both the consensus projection on the Street and the retailer’s own guidance, Mr. Landry is expecting management to introduce 2025 earnings per share guidance in a range of $1.60 to $1.65, which represents a growth rate of 6 per cent year-over-year at the mid point of the range and sits within the Street’s projection of $1.62.
“Hence we do not expect major upside surprises,” he said. “Pet Valu needs to cycle through its supply chain upgrades which is expected to create a $0.10 EPS headwind in 2025. We expect Q1/25 EPS growth to be muted on supply chain headwinds, promotional intensity and adverse weather. While we see limited downside risks for the shares at current levels, we also see limited catalysts to move them higher. We would need to see higher EPS growth rates or lower valuation to turn positive on Pet Valu.”
He added: “We expect Pet Valu to grow its revenues at a high-single digits pace for 2025. Revenue growth could contribute to 2025 EPS growth of $0.12 to $0.17, all else equal. Management previously indicated that supply chain investments are expected to be a $0.10 EPS headwind in 2025. We expect share buybacks to be accretive to EPS by 3-5 per cent or by $0.06. Hence, this algorithm would suggest an EPS growth of $0.08 to $0.13 over 2024. Under a scenario where Pet Valu reaches the mid point of its 2024 guidance ($1.515), we expect the company’s 2025 EPS guidance to come in at $1.60 to $1.65. Consensus stands at $1.62 and we stand at $1.64, so we expect limited upside surprise at the onset of the introduction of the guidance.”
Mr. Landry kept a “hold” recommendation and $27.50 target for Pet Valu shares. The current average is $31.82.
“While Pet Valu’s shares are down 20 per cent in the last 12 months, the decline was related to negative earnings revision and hence did not translate to cheaper valuation metrics,” he said. “In fact, we see limited multiple expansion potential from current levels as we believe Pet Valu’s shares are fairly valued, trading at 15 times 2025 earnings estimates. This represents a PEG ratio of 1.25-1.85 times assuming a normalized earnings growth rate of 8-12 per cent. Hence, we see the risk/reward profile currently balanced on Pet Valu’s shares.”
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Believing stabilizing acquired properties should provide boost to cash flow growth in 2025, Canaccord Genuity’s Mark Rothschild upgraded StorageVault Canada Inc. (SVI-T) to “buy” from “hold” following better-than-anticipated quarterly results, seeing a more attractive valuation.
“Internal growth accelerated to 3.3 per cent compared to growth of 2.7 per cent in 9M/24 and 2.8 per cent in 2024,” he said. “We understand the growth was driven by greater same-property rental rates, which more than offset lower same-property occupancy. With internal growth of 2.8 per cent in 2024, operating performance was below management’s expectation of 3.5-4 per cent due to a slower economy and lower moving activity than initially expected.
“Following year-end results which were in-line with our expectations, we are not making any material revisions to our outlook. We forecast FFO per diluted share of $0.23 for 2025 and $0.26 for 2026, equating to year-over-year growth of 10.0 per cent and 11.3 per cent, respectively. Our forecast assumes healthy same-property NOI growth driven by greater same-property rents. Further, continuing to lease-up recently acquired properties combined with replacing variable rate debt with lower-cost fixed rate mortgages should contribute to greater cash flow growth in 2025.”
His target slid to $4.50 from $5. The average target on the Street is $5.15.
“While there are concerns about the economy and a slower pace of population growth will likely weigh on operating performance in the near term, we believe the shares are trading at an attractive valuation. Reflecting an attractive entry point, we are upgrading SVI to BUY (from HOLD),” he said.
Elsewhere, other changes include:
* National Bank’s Matt Kornack to $5.50 from $5.25 with an “outperform” rating.
“SVI Q4 results were better than expected, ending the year with a sizable beat to our/Street estimates,” said Mr. Kornack. “Going into the quarter, we were working off an assumption that occupancy weakness experienced in Q2/Q3 may continue into Q4, however this trend reversed. In speaking with management, it was noted a pickup in activity allowed them to reach seasonal occupancy levels in the 85-per-cent range in Q4 vs. 200-300 basis points below seasonal levels in Q3. The result was a 3.3-per-cent SPNOI figure compared to up 1.2 per cent in Q3/24 and up 5.1 per cent a year ago. This remains below the long-term goal of 4-6 per cent however well ahead of our negative 4-per-cent expectation. It was also noted there was a continued improvement in rents although at the expense of using slightly more incentives.”
* Desjardins Securities’ Lorne Kalmar to $4.75 from $5 with a “hold” rating.
“We were surprised by the stock’s reaction to 4Q results, which we viewed as largely in line,” he said.” Management’s tone around the 2025 outlook was cautious in our view, noting that the political uncertainty on both sides of the border has clouded near-term visibility. For 2025, we understand SVI is targeting 3–5-per-cent SP NOI growth. While SVI’s valuation appears attractive, the ongoing uncertainty combined with our 2-per-cent 2025 AFFOPS growth forecast keeps us on the sidelines for now.”
* CIBC’s Dean Wilkinson to $4.75 from $5 with a “neutral” rating.
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Despite investor “caution” following last week’s quarterly results due to elevated capex and the expected deferral of a substantial issuer bid, Desjardins Securities analyst Chris MacCulloch continues to think Imperial Oil Ltd. (IMO-T) “remains one of the best-performing names in the Canadian energy sector, reflecting its insulation from potential U.S. tariffs.”
In a note titled You say goodbye, and I say hello, Mr. MacCulloch said he’s “eagerly” anticipating the company’s April investor day event, which he expects will provide incoming CEO John Whelan with his first opportunity to address the market on strategic priorities.
“During his five years at the helm of IMO, CEO Brad Corson created a shareholder-return monster on the back of outperformance at Kearl, offering an attractive combination of NCIBs augmented by SIBs during periods of elevated commodity prices, which supported a growing dividend,” he said. “While this formula has proven highly successful, as evidenced by IMO’s superior performance vs its Canadian and global peers, investor focus is gradually shifting toward longer-term organic growth projects. Specifically, it is becoming increasingly difficult to ignore management’s persistent highlighting of the attractive organic growth opportunities on offer. Not only has the company been quick to emphasize the outperformance of Grand Rapids Phase 1, which provides a foundation for future expansions, but it has also hinted at potentially revitalizing Aspen.
“In fairness, this shift in tone is partially attributable to the success of its shareholder-friendly capital allocation as the value proposition between SIBs and internal growth prospects continues to narrow, with the stock currently trading at a lofty 8.5 times EV/DACF multiple (2026E) while offering a 7.9 per cent FCF yield based on current strip prices. With a new leader incoming who was instrumental in the development of Kearl, investors are naturally curious about what comes next. Meanwhile, we feel compelled to tip our hat to Mr Corson on a job well done.”
Mr. MacCulloch raised his target for Imperial Oil shares by $1 to $100, but he kept a “hold” recommendation based on a “limited potential return.” The current average is $102.19.
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In other analyst actions:
* UBS’ Gavin Parsons upgraded Bombardier Inc. (BBD.B-T) to “neutral” from “sell” with a $95 target, up from $77 but below the $113.93 average on the Street.
* Canaccord Genuity’s Timothy Hoff initiated coverage of Q2 Metals Corp. (QTWO-X) with a “speculative buy” rating and $2 target.
“Q2 is an early stage exploration company with its primary asset being the Cisco lithium project in the James Bay region of Quebec, Canada. Cisco has already delivered some world-class exploration drill intercepts, with its best hit (347m at 1.35-per-cent Li2O) giving Cisco the third highest reported grade interval (metres x grade). We have modelled the asset and believe the deposit has the potential to deliver a +200Mt Resource, with exploration potential beyond this. We value Cisco using a 50-per-cent risked EV/Resource multiple, based on hard rock peers,” he said.
* Canaccord Genuity’s Aravinda Galappatthige initiated coverage of Stack Capital Group Inc. (STCK-T) with a “buy” rating and $13.75 target. The average is $13.
“Stack Capital is an investment holding company offering investors access to a highly sought after investment category—innovative, high-growth companies in the pre-IPO stage,” he sai. “Typically, this could involve investing in private equity, which has a number of limitations including liquidity, minimums, and accreditation. The company had its IPO in 2021 and over the last several years has accumulated investments in high-quality businesses like SpaceX, Canva, Locus Robotics, and Hopper.”
“We believe that Stack’s broader offering of ‘blue-chip, private company exposure with liquidity’ has genuine appeal. However, based on our research this opportunity appears under-exploited. Consequently, as awareness around this thesis and Stack grows, we expect to see movement in terms of a meaningful premium to NAV, increased trading volumes, and float, etc. We believe a key milestone would be the beginning of a few exits; this allows investors to see the full cycle of the investment and returns. As we discuss in this report, we believe there are at least a couple of potential IPOs out of Stack’s existing portfolio in the near term. Stack is also benefitting from headlines on SpaceX, its largest position which has recently seen sharp upward movement in reported valuations.”
* Jefferies’ Sheila Kahyaoglu lowered her target for Air Canada (AC-T) shares to $18 from $23 with a “hold” rating. The average is $25.42.
* Stifel’s Justin Keywood bumped his Andlauer Healthcare Group Inc. (AND-T) target to $52 from $50 with a “buy” rating (unchanged) ahead of its quarterly release on Wednesday. The average is $49.
“Our Q4 forecasts are in-line with consensus at $172.2-million revenue, up 2 per cent year-over-year, and $43.2-million adj. EBITDA (25.1-per-cent margin),” he said.
“We are more focused on the 2025 outlook with growth anticipated to ratchet up to 4-7-per-cent organically, along with an M&A update with a balance sheet to support (more than $300-million capacity). Tariffs may also be of focus, but we see no impact.”
* CIBC’s Todd Coupland raised his BlackBerry Ltd. (BB-N, BB-T) target by US$1 to US$7 with an “outperformer” rating. The average is US$4.24.
“Following a non-deal investor roadshow (NDRS) CIBC hosted for Blackberry’s CEO John Giamatteo and CFO Tim Foote in Toronto, we increase our Blackberry price target to $7 (prior $6),” said Mr. Coupland.
“Our revised target is based on the F2027 outlook Blackberry provided at its October 16, 2024 Investor Day, and higher valuation multiples. We previously included the F2027 outlook and excluded Cylance, but we raise our multiples to include 8 times 2027E EV/sales (prior 7 times) and 40 times EV/EBITDA (prior 30 times) for QNX – both of which are comparable to peers. During this NDRS, Blackberry confirmed the favorable trends reported in FQ3. Those, together with C-suite decisions throughout C2024, a conservative guiding philosophy, and adjustments to the Board of Directors, support our positive thesis that guidance is achievable. We believe Blackberry shares are attractive and should be purchased. In our view, these factors outweigh risks including slower growth from global vehicle production, potential tariffs, China exposure and slower cyber enterprise spending related to DOGE cost reductions within the U.S. government.”
* CIBC’s Dean Wilkinson cut his Boardwalk REIT (BEI.UN-T) target to $80 from $86 with a “neutral” rating. Other changes include: Scotia’s Mario Saric to $78.50 from $79.50 with a “sector perform” rating, RBC’s Jimmy Shan to $86 from $90 with an “outperform” rating and Desjardins Securities’ Kyle Stanley to $80 from $79 with a “buy” rating. The average is $81.75.
“We bumped our target to $80 (from C$79) following solid 4Q results and healthy (albeit in-line) 2025 guidance,” said Mr. Stanley. “While we understand the risks as they relate to population growth and new supply, we believe BEI stands to benefit from a potential change in government given its exposure to commodity-producing markets. Despite a slower earnings growth profile vs recent years (6 per cent in 2025), we believe BEI’s discounted valuation (3 times below LTA P/FFO, 29-per-cent NAV discount) more than adequately reflects it.”
* Ahead of its March 19 earnings release, Desjardins Securities’ Gary Ho raised his Boyd Group Services Inc. (BYD-T) target to $270, exceeding the $269.85 average, from $260 with a “buy” rating.
“We remain constructive on BYD’s 2025 outlook—peer reporting/commentary validates this,” he said. “In particular, BYD should benefit from easier year-over-year comps, used vehicle pricing normalizing and insurance rate increases levelling off. Moreover, for investors worried about tariff risk, we believe BYD has minimal impact, with 90 per cent plus of revenue from the U.S. and with third-party parts primarily sourced from Taiwan.”
* Desjardins Securities’ Allison Carson trimmed her Centerra Gold Inc. (CG-T) target to $10.50 from $11 with a “hold” rating, while Raymond James’ Brian MacArthur cut his target to $12 from $12.50 with an “outperform” rating. The average is $11.63.
“Heading into 2025, Centerra intends to focus on further development of existing assets, including extending the life of mine at Mount Milligan and development at Kemess,” she said. “With more than $1-billion in liquidity, we believe Centerra should also be focusing on M&A in 2025 (which has been an overhang on the stock) to grow its portfolio of gold assets and its production profile.”
* Canaccord Genuity’s Robert Young cut his Dye & Durham Ltd. (DND-T) target to $19 from $21 with a “buy” rating. The average is $20.84.
“Dye & Durham announced [Friday] morning that current board member Sid Singh will replace Hans Gieskes as interim CEO, effective immediately,” he said. “The search for a full-time CEO will continue. This was an unexpected announcement which injects new uncertainty at a time when investors were hopeful of a new phase with reduced noise and drama. We expect investors will look at this new development as a sign of deeper issues behind the scenes. We note that Sid Singh has been highly engaged and working with Dye & Durham on multiple parts of the business, which suggests he can hit the ground running. We remain BUY rated, although we are reducing our target multiple ... to reflect the higher risk. This leads to a new C$19.00 target price (from C$23.00). We continue to see a higher level of risk as Dye & Durham’s new management and board progress through a 100-day assessment period and permanent CEO transition.”
* Raymond James’ Daniel Magder reduced his Innergex Renewable Energy Inc. (INE-T) target to $11.50 from $13 with an “outperform” rating. The average is $11.61.
“With their continued focus on the Canadian market, which we believe limits the impact of the ongoing actions of the Trump administration, recent refinancings, growing power demand, and steadily rising PPA prices, we continue to like the setup for INE in 2025,” he said. “While the market continues to be volatile for IPPs, with Innergex currently trading close to historical lows at 9.4 times 2025 estimated EV/EBITDA, we believe the stock represents compelling value.”
* JP Morgan’s Ryan Brinkman cut his Magna International Inc. (MGA-N, MG-T) target to US$53 from US$55 with an “overweight” recommendation. The average is US$46.72.
* TD Cowen’s Graham Ryding lowered his Onex Corp. (ONEX-T) target to $137 from $140 with a “buy” rating. The average is $144.
“This was a fairly neutral quarter, in our view,” he said. “NAV/share growth was muted, while modestly negative FRE was in line with expectations. CLO fundraising remains strong. Portfolio realization activity remains a focus for management (albeit could be softer in 1H/25, in our view). We see a constructive outlook for buybacks, given excess cash, and the potential for portfolio realization activity.”
* Jefferies’ Anthony Linton lowered his Paramount Resources Ltd. (POU-T) target to $21, below the $27.39 average, from $35 with a “buy” rating.
* Scotia’s Konark Gupta raised his Secure Waste Infrastructure Corp. (SES-T) target by $1 to $22 with a “sector outperform” rating, while Raymond James’ Michael Barth increased his target to $18 from $16.25 with an “outperform” recommendation. The average is $18.53.
“We maintain our SO rating while raising our target .... driven mainly by lower Q4 debt than expected as our EBITDA outlook remains intact,” said Mr. Gupta. “SES reported EBITDA in line with expectations but with better-than-expected margins and cash flows. The company maintained 2025 outlook, which was provided in December 2024, as it closed the larger of the two planned tuck-ins on time. Management also noted that it is not witnessing any slowdown in business due to tariff risks for customers and highlighted that scrap metal won’t be subject to U.S. tariffs on commodities, which could benefit the metals recycling business. Overall, SES expects positive organic growth this year along with contributions from growth investments (internal and inorganic). The planned smaller metals recycling tuck-in is now expected to close later this year, while the company continues to repurchase shares and maintains a strong pipeline of M&A and organic growth opportunities with a conservative balance sheet. Following the recent pullback, the stock is even more attractively trading at only 7.3 times EV/EBITDA on 2025 estimates vs. Big4 waste comps at 15.8 times and niche peers at 10.6 times, while offering stronger FCF yield of 6 per cent.”
* Jefferies’ Lloyd Byrne raised his target for Suncor Energy Inc. (SU-T) to $59 from $58 with a “hold” rating. The average is $62.69.
* JP Morgan’s Brian Ossenbeck lowered his TFI International Inc. (TFII-N, TFII-T) target to US$138 from US$177 with an “overweight” rating. The average is US$140.52.
* Following a fourth-quarter earnings miss, National Bank’s Adam Shine, currently the lone analyst covering TVA Group Inc. (TVA.B-T), lowered his target to $1 from $1.25 with a “sector perform” rating.