Inside the Market’s roundup of some of today’s key analyst actions
Citi analyst James Hardiman warns powersports companies in his coverage universe, including Valcourt, Que.-based BRP Inc. (DOO-T), have “done little (to date) to soften what could now be a devastating blow” from the implementation of U.S. tariffs.
“Despite this weekend’s announcements, the tariff situation remains fluid with respect to how much remains on the negotiating table, what exclusions may be made available (and for who), and how companies will adjust to this new reality,” he said.
“As much as possible, companies will attempt to pass new tariffs on to consumers in the form of pricing, although we believe that this tactic is much less likely to be effective than it was during the first Trump administration, when overall demand was much more robust and consumers were not coming off of a period of unprecedented inflation and dealing with historically-high interest rates. Companies will also likely step up their lobbying efforts in an attempt to gain exclusions from the new tariffs, while also re-optimizing their cost structure in an effort to balance tariff costs, labor costs, and manufacturing investments.”
U.S. tariffs turn Canadian Ski-Doo maker BRP’s Mexico production hub into a liability
Mr. Hardiman sees BRP in an “untenable situation” with almost 70 per cent of its cost of goods sold (COGS) coming into the U.S. via Mexico, equating to more than US$1-billion in tariff impacts.
“The impending tariffs would put BRP firmly into the red, to the tune of a $6.65 loss per share in FY26 and a $4.63 loss per share in FY27,” he noted.
That led him to lower his recommendation for BRP shares to “neutral” from “buy” previously.
“The near-term skew is clearly a negative one, and the burden of proof has probably shifted to the company to map out a plan for a profitable business in the new reality, whatever that may be,” he said.
Mr. Hardiman cut his target for BRP shares to $70 from $90, saying it reflects 10 times his fiscal 2027 estimates, which does not yet reflect any of the impact of new tariffs. The average on the Street is $87.98.
“While BRP shares have performed poorly over the past year (down 18 per cent year-over-year) the stock is fairly flat since the U.S. Presidential election, whereas PII is down 33 per cent since the election, as investors have been laser focused on the potential fallout to PII given the earnings destruction that took place during the first Trump administrations,” he said.
“In contrast, it is unclear just how much of the tariff story is in DOO shares, which we see as yet another reason to step back and see where the dust settles, even as we continue to believe that DOO is a relative share gainer over time.”
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Scotia Capital analyst Ben Isaacson thinks the “steep ... unwarranted, and punishing U.S. tariffs on Canadian imports have brought another material economic risk to Canada’s already-declining softwood lumber industry.”
“We don’t expect investors to stick around to find out, based on feedback over the past two weeks,” he added. “At least, not at first. From a market cap perspective, the Trees are a small/niche space, which usually means the buyside can and will avoid the space entirely when times are tough, rather than ‘being a bit underweight’. Accordingly, and in anticipation of investors’ shoot first market response, we have cut valuation multiples across the board, brought all PTs down.”
In a report released Monday, Mr. Isaacson said the U.S. will not be able to fully displace the import of tariffed Canadian lumber with cheaper alternates, suggesting there is likely to be some “demand destruction” moving forward.
“Rising lumber prices alone isn’t the issue. The issue for the Canadian mills is, by how much will lumber prices rise relative to the tariff? This matters, as many Western Canadian lumber mills are already fourth quartile and marginal on the cost curve, in part due to already-punishing duties the U.S. imposes on Canadian softwood lumber. Even before the 25-per-cent tariff that comes into effect on Tuesday, Canadian softwood lumber exports are already subject to cumulative duties of more than 14 per cent, which in some cases, will rise to 25 per cent, 30 per cent, or even above 35 per cent by the end of the year. Again, this is before the U.S. administration’s 25% tariff.
“Canadian lumber mills are at risk if U.S. importers are unable to pass the full tariff onto the consumer on a dollar for dollar basis. This is precisely what could lead to more permanent or indefinite mill closures in across Canada. (As if the past two years haven’t been punishing enough on the lumber supply chain- on both sides of the border.).”
Mr. Isaacson downgraded Canfor Corp. (CFP-T) to a “sector underperform” rating from “sector perform” with a $15 target, down from $19. The average on the Street is $20.17.
He also made these target changes:
- Canfor Pulp Products Inc. (CFX-T, “sector perform”) to $1.25 from $1.50. Average: $1.45.
- Interfor Corp. (IFP-T, “sector outperform”) to $21 from $27. Average: $24.17.
- Western Forest Products Inc. (WEF-T, “sector perform”) to 50 cents from 55 cents. Average: 54 cents.
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Pointing to the downside potential from U.S. tariffs, TD Cowen analyst Aaron MacNeil downgraded both Ensign Energy Services Inc. (ESI-T) and Precision Drilling Corp. (PD-T) to “hold” recommendations from “buy” previously.
“With the proposed 10-per-cent tariff on Canadian oil and gas imports to be implemented on February 18, 2025, we believe that Duvernay (high-cost light oil), Clearwater (short-cycle heavy oil), and other light oil plays are the most likely to experience reduced D&C activity,” he said. “Precision, Ensign, and to a lesser extent Trican and Pason have exposure to these plays. Conversely, we believe the Montney (LNG Canada/localized condensate demand) and oil sands (long-cycle heavy oil) are less likely to be impacted, unless tariffs are applied over a long duration. In this context, we expect that the Canadian operations of CES (Montney, SAGD), Enerflex (Montney), and North American (oil sands) will be less impacted. Our 2025 Canadian rig count forecast decreases 5 per cent, and assumes tariffs are short-lived. To this end, our 2025 and long-term estimates could feature further downside.
Mr. MacNeil also now sees “limited” upside for U.S. natural gas, hurting both companies.
“In our view, U.S. producers make capital spending decisions based on global supply/demand factors, not government policy, and we do not believe that the Trump Administration will have any meaningful impact on U.S. activity levels,” he said. “Further, we believe that negative read-throughs to natural-gas demand from the recent DeepSeek disclosures are likely to temper potential increases in natural-gas-directed drilling activity, which until recently seemed well-positioned due to a combination of prevailing cold weather across the Eastern U.S. and visibility to demand growth in 2026 and beyond. Our 2025 U.S. rig count forecast increases by five average active rigs, and we assume 20 natural-gas-directed rig additions in 2025.
“U.S. Exposure and FX Considerations: CES and Enerflex feature 70 per cent and 40 per cent U.S. revenue exposure, and CES features minimal U.S.-denominated debt. Clearly, U.S. exposure is advantageous at this time, given the dynamics noted above. Additionally, Our 2025 FX assumption has moved from 0.74 to 0.70 since our last update, implying an 6-per-cent FX lift to U.S. revenues and debt, and the FX rate is likely to continue to widen. CES and Enerflex remain our best ideas for sector exposure.”
For Ensign, his target dropped to $3 from $3.25. The average on the Street is $3.88.
“In our view, a potential 10-per-cent tariff is likely to negatively impact Canadian D&C activity across a range of plays that Ensign has exposure to,” he said. “We also note that Ensign’s share price has increased 34 per cent in the past six months.”
His target for Precision dropped to $100 from $120, below the $126.83 average.
“To align with our peers covering the U.S. Energy Services sector, we have changed our definition of EBITDA (previously EBITDAS), which previously added back stock-based compensation from earnings. Our FCF yield calculation also changes. Finally, we have made some modest changes to our DCF methodology. These changes have been applied consistently across our sector coverage. In this context, our EBITDA estimate revisions (2025E: down 10 per cent, 2026E: down 8 per cent) for Precision are more pronounced than they otherwise would be,” said Mr. MacNeil.
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While he thinks “tariff turbulence already appears largely bake in” to North American aerospace and defence stocks, Citi analyst Stephen Trent warns Bombardier Inc. (BBD.B-T) could see a “mild” impact on its earnings.
“Although not all details are known at this time, Citi’s model assumes that Bombardier takes a ca. 20-per-cent price haircut on the ca. 60 per cent of its ‘25E-’27E Challenger jet deliveries that are U.S.-bound, and a 5-per-cent price haircut on such Global family jet deliveries, with the latter’s smaller price haircut reflecting far less demand elasticity vs. other business jets,” he said. “We assume no impact on the aftermarket segment, as this includes U.S.-based points of service.”
Mr. Trent also emphasized Bombardier generated 63 per cent of its 2023 revenue in the United States, “considering that the Canadian business jet manufacturer sells aircraft to U.S. customers and provides aftermarket services in places such as Florida and Kansas.”
“In Bombardier’s case, although the company’s primary manufacturing facilities are in Canada, Bombardier has some wing manufacturing facilities in Texas, along with assembly, aerostructure and completion facilities in the U.S. and Mexico,” he added. “Of course, it is unclear whether aircraft that undergo final assembly in the U.S. still count as imported goods under the Trump Administration’s rules.”
Maintaining his “buy” rating for Bombardier shares, Mr. Trent trimmed his target to $107 from $113. The average is $120.53.
“It is possible that Bombardier’s shares could find firmer ground, once the market comes to understand that the tariff impact already appears to be baked in,” he concluded.
“We rate Bombardier Buy. On the back of successive, significant corporate re-shufflings and production adjustments, the company’s business model is more simplified. Although aerospace EBITDA generation is still recovering and the debt load remains high, the company’s efforts to boost its operational metrics and de-risk the balance sheet are trending stronger than we had anticipated.”
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Scotia Capital analyst Meny Grauman sees the Canadian life insurance industry as “an attractive tariff safe haven” ahead of its quarterly earnings season.
“Although we continue to like (and recommend) Canadian lifeco stocks on their own terms, we believe that the group also stands out as a safe haven from the recently launched Canada/U.S. trade war,” he said. “It goes without saying that lifecos do not actually move goods across international borders, but even second order macro-economic impacts should be modest as core insurance products are relatively recession resilient, and both earnings streams and market exposure are quite geographically diversified across most names, with IAG being a notable exception that is much more Canada focused. Over the last month the lifeco group has lagged the TSX even in the face of tariff talk, and despite the fact that long yields continue to move higher in the US while North American equity markets continue to perform very well. Put it all together, and we like the set up for year-end lifeco reporting both in terms of quarterly fundamentals themselves, but also because of the ability of these stocks to provide shelter from the coming tariff storm.”
For the fourth quarter of 2024, Mr. Grauman is projecting core earnings per share to fall 2 per cent on average sequentially but rise 12 per cent year-over-year.
“On average our estimates are 1 per cent above consensus (excluding SFC), although we are in line for both MFC and SLF,” he said. “On a fundamental basis, we assume resilient underlying insurance results, along with improving wealth management profitability thanks to rallying equity markets. Broadly speaking, we continue to take a conservative approach to the quarter’s core EPS numbers, but looking ahead our 2025 EPS estimates continue to forecast solid EPS growth broadly in line with (rising) medium-term targets. Headline results should benefit from rising equities, but continue to be negatively impacted by real-estate related losses.
“Top Picks: GWO is our top pick, followed by MFC. Our pecking order for the lifecos is now GWO, MFC, SLF, and IAG. GWO is now our top pick as we upgrade the name from Sector Perform to Sector Outperform. In this report we also downgraded IAG from Sector Outperform to Sector Perform. We also have a Sector Outperform rating on SFC which we highlight as an actionable small-cap idea that will benefit from the continued boom in the U.S. annuity market.”
Mr. Grauman’s upgrade of Great-West Lifeco Inc. (GWO-T) came with a target price rise to $59 from $52. The average on the Street is $51.56.
“On that basis heading into Q4 reporting, GWO is now our top pick as we upgrade the name from Sector Perform to Sector Outperform,” he said. This upgrade is driven by three key factors. First, we expect the lifeco’s April investor day to deliver higher medium-term EPS growth and ROE targets, along with potentially more disclosure on the lifecos cash-generating ability. Second, we note the lifeco’s defensive attributes including the fact that 70 per cent of base earnings come from outside Canada. Finally, while the market is correctly viewing GWO’s Empower unit as its key growth lever, the market is overly focused on Empower’s workplace business, and not fully appreciating the unrealized value of its growing wealth unit where growth can accelerate via organic and inorganic capital deployment.”
With his downgrade of IA Financial Corp. Inc. (IAG-T), the analyst kept a $143 target, exceeding the $138.75 average.
“IAG is the best-performing Canadian lifeco since Q3 reporting, and while we expect the company to boost its ROE target at its upcoming Investor Day on February 27 we believe that the shares are already pricing in this improved outlook which leaves upside here more modest in our view, and is the key reason we downgrade the shares to Sector Perform from Sector Outperform,” he said. “We continue to view the lifeco’s $1.1-billion in deployable capital as a key strength, but the outlook for M&A in the US dealer services business is now highly uncertain again given the Canada/US trade war that will likely hit the auto business particularly hard. Meanwhile, management has been clear that buyback activity should continue to slow given the run-up in the shares.”
Mr. Grauman also made these target changes:
- Manulife Financial Corp. (MFC-T, “sector outperform”) to $53 from $49. Average: $47.61.
- Sun Life Financial Inc. (SLF-T, “sector outperform”) to $98 from $96. Average: $91.17.
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National Bank Financial analyst Jaeme Gloyn reaffirmed his positive stance on both the property and casualty insurance and financial services industries heading into fourth-quarter 2024 earnings season, seeing them in a favourable position to withstand the brunt of the impact from U.S. tariffs.
“While no sector is immune to the risks of a prolonged trade war, all companies are likely to face some form of revenue headwind as macroeconomic risks increase, we believe our coverage universe is relatively well insulated,” he said. “Notably, tariffs do not typically target financial services. On the positive side, a stronger USD vs. CAD will benefit companies that report in USD but trade in CAD. This includes FFH, EFN, ECN and BBU. These companies also operate entirely or primarily in the U.S., which should dampen the sting of economic repercussions stemming from the trade war. Our NBF Macroeconomics team suggests the USD could appreciate to $1.50 to $1.55 CAD, or 5-per-cent upside at the mid-point. In addition, other companies under our coverage have material exposure to the U.S. that stand to benefit from the improved USD and less impactful ripple effects. This includes IGM (55 per cent of AUM is in USD), FSZ (20 per cent of revenue), Trisura (mpre than 40 per cent of income from the U.S.).
“Moreover, one of the key characteristics of the P&C Insurance industry (e.g., DFY, FFH, IFC, TSU) is that it is uncorrelated to the economic and market backdrop. For context, for the past 30 years, Canadian P&C industry premiums growth has remained positive in every year while net claims ratios have been stable (including the 2008 and 2009 global financial crisis).”
In a research report released Monday, Mr. Gloyn said he expects P&C insurers to post “strong” results in what he anticipates will be “a more normal environment in 2025.”
“In 2024, we saw multiples shift to the high end of their historic range,” he said. “That said, in the context of ROE expectations current valuations appear reasonable. While elevated CAT losses remain a lingering concern, the record catastrophe year in 2024 has added visibility to the sustainability of firm market conditions including further rate increases, ultimately driving higher ROEs and book value growth as inflation moderates (assuming a more “normal” catastrophe year). We maintain a favourable view on the mid-term profitability set-up, with the potential for M&A to enhance the outlook. Given current levels of excess capital across our P&C coverage, consolidation will be a theme to watch for in 2025.
“As mentioned in our 2025 Top Picks Note, we see upside opportunity in areas of our coverage where the macro environment appears to be weighing heavily (GSY in particular and BBU to a lesser extent as the recent Clarios dividend recapitalization delays a significant monetization piece). We continue to see upside in high quality names with valuation upside (EFN and FFH).”
The analyst reaffirmed ECN Capital Corp. (ECN-T) as his top pick for the year ahead. He has an “outperform” rating and $5 target for its shares. The average target on the Street is $3.80, according to LSEG data.
“We expect four aspects of the story to drive shares higher in 2025: i) the underappreciated growth outlook, ii) our increased confidence in key drivers at Triad, iii) confidence in a recovery at RV & Marine (RVM), and iv) significant valuation upside,” he said. “We believe solid Q4-24 results and robust outlook commentary will support this view.”
Mr. Gloyn made these target price changes:
- Definity Financial Corp. (DFY-T, “outperform”) to $68 from $67. The average on the Street is $58.90.
- Fairfax Financial Holdings Ltd. (FFH-T, “outperform”) to $2,600 from $2,400. Average: $2,269.16.
- First National Financial Corp. (FN-T, “sector perform”) to $43 from $42. Average: $43.40.
- Fiera Capital Corp. (FSZ-T, “underperform”) to $8.50 from $9. Average: $9.33.
- Intact Financial Corp. (IFC-T, “outperform”) to $305 from $296. Average: $248.62.
- IGM Financial Inc. (IGM-T, “outperform”) to $53 from $52. Average: $50.33.
- Power Corp. of Canada (POW-T, “sector perform”) to $50 from $49. Average: $50.29.
- Timbercreek Financial Corp. (TF-T, “sector perform”) to $8 from $8.50. Average: $8.70.
- Trisura Group Ltd. (TSU-T, “outperform”) to $57 from $67. Average: $55.78.
- TMX Group Ltd. (X-T, “sector perform”) to $50 from $48. Average: $48.25.
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After a “positive” fourth quarter of 2024, Mr. Gloyn thinks Brookfield Business Partners LP (BBU-N/BBU.UN-T) will be “the biggest beneficiary of a lower interest rate and soft-landing environment, should one materialize.”
“We expect BBU’s diversified portfolio of companies across sectors/geographies will continue to deliver solid results,” he said. “Additionally, the proceeds from the Clarios dividend recapitalization provides optionality for capital allocation and ultimately value creation as BBU repurchases shares and reinvests in new businesses. Moreover, we continue to believe BBU will benefit from a more active M&A backdrop that will drive increased monetizations.”
On Friday before the bell, Brookfield reported adjusted EBITDA of US$653-million, exceeding both Mr. Gloyn’s US$643-million estimate and the Street’s expectation of US$619-million. Adjusted earnings from operations, excluding gains related to the dispositions of its road fuels operation and Canadian aggregates production operations, came in at US$1.47, also topping projections (US$1.30 and US$1.26, respectively).
“Strong results from key businesses Clarios and Sagen reflect the quality of BBU’s investments,” he said. “We believe continued performance in line with their track record warrants a valuation re-rate over time. Additionally, proceeds from the completion of the Clarios dividend recapitalization and the partial sale of Altera provides potential for further value creation as BBU fully utilizes the NCIB and reinvests into new businesses.”
Maintaining his “outperform” recommendation, Mr. Gloyn increased his target to US$36 from US$35. The average is US$32.29.
“BBU currently trades at an EV/EBITDA multiple of 7.4 times, in line with the average of 7.4 times since 2018,” he said. “Additionally, the equity value of BBU trades at only 1.9 times EBITDA, still well below its average of 3.1 times. We estimate the shares currently trade at a 50-per-cent discount to NAV. While our favourable outlook reflects strong underlying fundamentals, we acknowledge the share price is very much tied to the interest rate outlook and M&A activity. Lower rates coupled with a soft-landing environment could propel BBU to a top performer in 2025.”
Elsewhere, RBC’s Robert Kwan cut his target to US$30 from US$32 with an “outperform” rating.
“We believe the recent capital recycling and large ‘upfinancing’ transaction demonstrates the company’s ability to realize value while giving BBU some dry powder, as management believes the current environment is supportive of a pick-up in transaction activity. We believe the share buybacks and additional asset monetizations could help narrow the discount to our estimated net value,” he said.
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RBC Dominion Securities analyst Walter Spracklin is maintaining a cautious view on Canadian trucking and diversified industrial companies heading into earnings season “until visibility on tariffs is achieved” with volume trends and freight pricing remaining “soft” even though domestic manufacturing appears to be picking up.
“We see TFII as most significantly impacted by tariffs, with MTL and WTE negative to neutral,” he said in a report released Monday. “We see AND and CJT as least impacted given their focus on domestic hauls with little to no hauling of Canadian-originated goods (though the potential broader secondary impacts of a recession driven by tariff policy cannot be dismissed). We adjust our Q4 estimates higher at CJT and lower at TFII and WTE. We leave our estimates unchanged at AND, MTL, and SJ.
“Key drivers expected to impact Q4. We expect visibility into freight demand (for CJT, MTL and TFII) to be a focus, and any commentary on tariff impact to the extent management teams can provide one (which is unlikely). In addition, we believe potential M&A will drive sentiment for MTL and TFII. Finally, specific to CJT, we look for an update on potential operating leverage into next year.”
Mr. Spracklin made a pair of target price adjustments:
* Andlauer Healthcare Group Inc. (AND-T, “sector perform”) to $45 from $42. The average is $47.50.
“We see AND as being least impacted by tariffs as they have less cross-border sales into the US, and we therefore continue to expect AND to command a higher relative valuation premium versus other transportation companies. We took higher our target multiple to 9.5 times (from 9 times), which when applied to our unchanged 2026 EBITDA estimate results in our higher price target,” he said.
* TFI International Inc. (TFII-N/TFII-T, “outperform”) to US$156 from US$160. Average: US$161.12.
“TFII is trading toward the high-end of its historical range, in our view, reflecting trough earnings, the potential separation of the company into two separate publicly traded entities (TL and LTL/P&C/Logistics), potential pull forward of M&A activity, and self-help margin improvement opportunities,” he said.
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Ahead of fourth-quarter earnings season, CIBC World Markets analyst Krista Friesen made a series of target price adjustments to industrial stocks in her coverage universe on Monday.
She reduced her targets for these companies.
- Aecon Group Inc. (ARE-T, “outperformer”) to $33 from $35. Average: $30.82.
- Ag Growth International Inc. (AFN-T, “outperformer”) to $56 from $58. Average: $59.50.
- AtkinsRéalis Group Inc. (ATRL-T, “outperformer”) to $88 from $90. Average: $87.25.
- Finning International Inc. (FTT-T, “outperformer”) to $49 from $50. Average: $47.33.
- WSP Global Inc. (WSP-T, “outperformer”) to $278 from $280. Average: $279.57.
Conversely, Ms. Friesen made these target raises:
- Badger Infrastructure Solutions Ltd. (BDGI-T, “outperformer”) to $55 from $52. Average: $49.31.
- Bird Construction Inc. (BDT-T, “neutral”) to $36 from $34. Average: $35.38.
- Toromont Industries Ltd. (TIH-T, “neutral”) to $129 from $128. Average: $134.67.
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In other analyst actions:
* TD Cowen’s Cherilyn Radbourne bumped her Brookfield Infrastructure Partners LP (BIP-N, BIP.UN-T) target to US$53 from US$50 with a “buy” rating. The average is US$40.
“BIP has a long track-record of compounding earnings/unitholder value, in our view, and we see the business as stronger, more diversified, and better positioned than ever. We believe the market is under-appreciating BIP’s high level of inflation indexation, which provides a natural interest rate hedge, and its leverage to digitalization. We find the current yield/valuation very attractive,” she said.
* Ahead of its fourth-quarter 2024 financial release on March 27, Desjardins Securities’ Gary Ho raised his Dominion Lending Centres Inc. (DLCG-T) target to $8.50 from $7.25 with a “buy” rating. The average is $9.08.
“Our investment thesis is based on: (1) funded mortgage volumes accelerating in 2025, benefiting from the refi cycle, lower rates and friendlier mortgage rules; (2) EBITDA margin expands with significant torque when mortgage volumes return; (3) further upside in Newton penetration; and (4) near-term M&A possibility (approximately 1 times leverage),” he said.
* Stifel’s Suthan Sukumar raised his D2L Inc. (DTOL-T) target to $24 from $20 with a “buy” rating. The average is $21.
* CIBC’s Hamir Patel raised his target for Methanex Corp. (MEOH-Q/MX-T) to US$63 from US$49 with an “outperformer” rating. The average is US$61.64.
“With the U.S. imposing 25-per-cent tariffs on Canadian and Mexican goods from February 4 (and 10-per-cent tariffs on Canadian energy imports), as well as additional 10-per-cent tariffs on Chinese goods, we expect our fertilizer and chemicals names to be relatively less impacted than other sectors,” he said. “Our top pick in the space remains Methanex, and we continue to favour Nutrien among the ferts.
“As the U.S. is dependent on Canadian potash, we expect the tariff burden will almost entirely be passed on to the U.S. consumer (i.e., farmer) in the form of higher fertilizer prices. U.S. imports comprised 95 per cent of domestic potash consumption from 2020-2024, with Canada representing 79 per cent of potash imports. While some domestic U.S. demand destruction would typically be anticipated with higher prices, we note that potash prices in January were 35 per cent below their 15-year real average, and there would likely be increased U.S. federal support payments for farmers given the strength of the ag lobby.”
* BofA Securities’ David Barden cut his price objective for Rogers Communications Inc. (RCI.B-T) to $50 from $55 witth a “neutral” recommendation. The average is $55.34.
“RCI is managing the current environment well as it delivers healthy subscriber growth while limiting ARPU downside better than its peers. The market’s slower growth, however makes de-levering incrementally harder. Greater clarity on how and when the company will address leverage would help investor sentiment, in our view,” he said.
* Stifel’s Ian Gillies trimmed his Russel Metals Inc. (RUS-T) target to $55.50, exceeding the $52.08 average, from $47 with a “buy” rating.
“There were two no more scary words in the television show “The Wire” than “Omar’s coming!” Canada is now going through its own version of this event with tariffs coming. Fortunately, RUS stands to benefit from tariffs as it presents a significant estimates’ tailwind while they are in place. We have outlined a scenario where our 2025E EBITDA goes to $487-million if steel prices respond like they did during the prior regime. Spot HRC prices are up 10.4 per cent since the start of the year, and market commentary is getting more constructive regarding prices and demand. Perhaps more importantly, we still have a high affinity for management’s capital allocation prowess and the discounted valuation of the stock using our normalized 2026E scenario (10.1x P/E),” said Mr. Gillies.
* Acumen Capital’s Trevor Reynolds initiated coverage of Sagicor Financial Company Ltd. (SFC-T) with a “buy” rating and $10.25 target.