Inside the Market’s roundup of some of today’s key analyst actions
While a disruption in its supply of seats forced NFI Group Inc. (NFI-T) to lower its 2025 guidance, ATB Capital Markets analyst Chris Murray thinks the bus manufacturer is “reaching a turning point” on the issue and expects to see higher production rates and levels of profitability in the second half of the year through 2026.
Shares of the Winnipeg-based company surged 20.8 per cent on Friday on the company’s optimistic outlook, even though it reduced its adjusted EBITDA forecast to $320-$360-million from more than $350-million previously. It now expects to deliver greater than 5,000 equivalent units, up from 4,547 in 2024, with “better contract pricing, cost absorption and demand for Aftermarket services supporting 170 basis point of margin expansion in 2025.”
“NFI reported relatively in-line Q4/24 results with challenges in seat supply containing delivery rates and overall profitability levels in Manufacturing,” said Mr. Murray in a report titled Moving Toward the Next Steps of the Recovery. “While NFI lowered guidance for 2025 given supply chain issues in early 2025, management remained constructive about its overall outlook and expects its seat supply to improve meaningfully by the end of Q2/25. Booking trends reaffirmed that demand conditions remain very strong across segments, though management did highlight some softness in the UK, which it expects to impact the recovery at Alexander Dennis. Aftermarket is expected to remain a source of strength in 2025, providing a steady source of margin accretive revenue. While the guidance reduction is not a positive start to 2025, we view the seat issue as transitory and mostly resolved by Q2/25. We expect increased production rates and better contract pricing to lead to stronger Manufacturing performance in 2025/2026 and beyond.
“The challenged seat supplier (American Seating) is currently executing a recovery plan with NFI (along with its competitors and external consultants) maintaining oversight and providing production resources to the supplier to support its employees and operations. Management expects operational improvements at American Seating and the introduction of a second source of supply to regularize the seat supply issue by the end of Q2/25, allowing for a production ramp and $400-million Adjusted EBITDA run-rate by Q4/25.”
NFI also struck on optimistic tone on its ability to handle potential U.S. tariffs as “management reiterated that its transit bus contracts include provisions that allow for tariff-based cost pressures to be passed on to the customer but acknowledged greater exposure in its private coach business given manufacturing is entirely Canadian-based.”
“The Company is taking steps to localize more its production processes, sources of supply, and inventory levels with initiatives underway to scale fully domestic production capabilities for Canadian transit customers over the medium term,” said Mr. Murray. “NFI believes current public funding allocations support its outlook for 2025 and 2026 with competitive conditions and its propulsion-agnostic offerings positioning it favourably should US-based funding and sentiment shift in favour of ICE buses (i.e., away from ZEBs) over the medium term. Management noted that should such a scenario unfold beyond 2025 (all slots are sold for 2025), the Company’s ability to scale ICE [internal combustion engine] production would likely offset the impact of lower gross margin dollars per unit from producing fewer ZEBs [zero-emission buses].”
Maintaining an “outperform” recommendation for NFI shares, Mr. Murray raised his one-year target to $26 from $24 to reflect “the quarterly rollover and enhanced expectations for deleveraging in H2/25.” The average target on the Street is $20.20, according to LSEG data.
Elsewhere, CIBC’s Krista Friesen lowered her target by $1 to $20 with an “outperformer” rating.
“There was a heightened level of uncertainty heading into NFI’s Q4 reporting that had been reflected in the company’s share price, which had drifted 21 per cent lower since the beginning of the year,” she said. “Fortunately, NFI was able to assuage some investors’ fears with a positive update on the seating issue the company is facing, as well as by only modestly adjusting its guidance for 2025. Despite the stock being up 20 per cent plus on the news, we continue to see upside in the name. NFI is trading at 5.4 times our 2026 EBITDA estimate (pro forma net debt), well below its historical average of 8 times.”
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Bank of Montreal (BMO-T) has been added to the “Best Stock Ideas” list from RBC’s Global Financials Research Group in its first-quarter 2025 update released Monday.
Canadian Imperial Bank of Commerce (CM-T) was removed from the list, which includes equities from across RBC’s global financial market coverage universe and currently includes 19 investment ideas.
“Since inception, our selected stocks delivered an average total return of 24 per cent (down 7 per cent year-to-date),” the firm said. “Over the same period, the World Financials Index delivered a return of 39 per cent (3 per cent YTD), the S&P 500 25 per cent (down 5 per cent YTD), the S&P Europe 350 20 per cent (7 per cent YTD) and the S&P/TSX composite Index 25% (down 1 per cent YTD).”
In a report titled Weathering a volatile quarter, the analysts said deciphering the global economic outlook is “key” for investing into bank stocks.
“Recent political and geopolitical events have created uncertainty and volatility in markets,” they said. “We remain constructive on U.S. banks under the assumption of economic growth at a similar rate as in 2024, a steeper yield curve and softer regulation. For Europe, we will be watching for recent initiatives at the political level to translate into improved confidence and feeding through to the economy. Tariffs and political developments will be in focus for Canadian financials.”
Analyst Darko Mihelic has an “outperform” recommendation and $163 target for BMO shares, exceeding the $153.80 average on the Street.
“Credit problems are mostly over and provisions for credit losses (PCLs) have peaked in the absence of tariffs: Without considering the impact of tariffs, we believe BMO is likely past its credit concerns as its impaired PCL ratio peaked in Q4/24 at 66 basis points and it identified loans in the 2021 vintage that resulted in elevated credit losses in 2024, setting the stage for moderating PCLs in 2025 and 2026,” he said. “We view 2025 as a transitional period with heightened uncertainty and assume an impaired PCL [provisions for credit losses] ratio of 0.54 per cent in 2025 versus 0.47 per cent in 2024 (above BMO’s guidance in the high-40s basis points, which is likely conservative in our view), which declines to a lower impaired PCL ratio of 0.43 per cent in 2026. On a P/B basis, BMO is trading at 1.27 times, below the peer average of 1.48 times and its long-term historical average of 1.49 times.
“Committed to rebuilding ROE: BMO outlined the roadmap to its 15-per-cent-plus medium-term ROE target from 10 per cent in 2024: U.S. segment improvement (credit normalization and Bank of the West synergies and growth), normalized PCLs which move closer to its long-term average total PCL ratio in the mid-30s bps range, operating performance/positive operating leverage, and capital optimization (capital allocation and share buyback). BMO is looking to rebuild its ROE to 15 per cent within 3 to 5 years, hoping to have this accomplished at the lower end of that time range. If BMO were to achieve its 15-per-cent ROE target at the earliest end of its targeted time frame (say 3 years, or by 2027), it would imply significant upside to core EPS ($15+ per share by 2027). For reference, a 15-per-cent ROE in 2025 would imply earnings power of approximately $16.13 per share versus $9.68 per share in 2024.”
Mr. Mihelic has an “outperform” rating and $108 target for CIBC shares. The average on the Street is $96.01.
No rationale for its removal was provided in the report.
The other TSX-listed stocks on the list are: Brookfield Asset Management Ltd. (BAM-T, “outperform” and US$68 target) and Sun Life Financial Inc. (SLF-T, “outperform” and $82 target).
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In a report titled Set It and Forget It, Scotia Capital analyst Jonathan Goldman reaffirmed his bullish view on Adentra Inc. (ADEN-T), but he warned patience will be necessary from investors given the unfavourable macroeconomic conditions.
“We don’t have an obvious catalyst to point to, as higher rates will likely keep earnings, sentiment, and share price range-bound in the near term,” he said. “Rates need to come down to jump-start industry activity levels with homeowners locked into low mortgages (housing turnover is at multi-decade lows) and deferring large-ticket discretionary spend. Uncertainty around trade and policy is also dampening consumer sentiment. But with U.S. home equity values up more than 80 per cent since 2019, that should eventually translate to a tidal wave of home reno spend.
“We are also encouraged by what appears like the end of the prolonged period of deflation and the resilience of gross margins, which are trending well above the target range of 20 per cent and more than 300 basis points above 2019 levels supported by deliberate strategic actions taken by management to shift the mix towards specialty products. With shares trading at 6.1 times EV/EBITDA and 7.5 times P/E on our 2025E, which we view as trough (i.e., no recovery this year), ADEN is one of our highest conviction risk/rewards in our coverage universe, albeit the timing of the latter could take longer to materialize.”
In response to last week’s quarterly release, Mr. Goldman lowered his 2025 earnings estimate by 7 per cent, noting he was already 5 per cent below consensus, citing “lower sales assumptions and operating deleverage, incorporating: 1) 1Q commentary (January and February volumes down 6 per cent, a quarter of which was due to weather per management); 2) no price inflation (however, management believes we could see product price inflation this year due to tariffs); and 3) some conservatism, as our estimates are below peer guidance.
“The opportunity with ADEN shares is to get in at the ground-floor (read: 52-week lows) of a quality company and management team, with a long runway for M&A in a fragmented market, a structurally improved margin profile, and lower earnings volatility of more diversified business model,” he added. “Not to mention limited tariff exposure with more than 90 per cent of purchases not impacted by tariffs that were declared in March or those expected to come into effect in April.”
Reaffirming his “sector outperform” rating, the analyst reduced his target to $43 from $49. The average on the Street is $50.13.
Elsewhere, other changes include:
* Stifel’s Ian Gillies to $41 from $51 with a “buy” rating.
“U.S. housing market conditions remains littered with uncertainty given the U.S. 30-year mortgage rate remains elevated at 6.65 per cent, a lack of people moving, and weak consumer confidence,” he said. “Most building products companies are suggesting flat year-over-year activity in 2025E, but we think it is reasonable to assume a weaker year even if the data does not suggest it yet. This leads to us forecasting organic contraction and margin compression for ADEN in 2025E with a modest recovery in 2026E. As a result, we are reducing 2025 and 2026 EBITDA estimates by 11.5 per cent/10.7 per cent to $181-million/$193-million. This leads to a new target price of $41.00/sh (prior: $51.00/sh) but we maintain our BUY rating. We retain our BUY rating given management’s strong track record of deploying capital effectively and the inexpensive 2026E P/E of 7.1 times. Value-oriented investors or those with a longer time horizon should consider ADEN at current prices.”
* Canaccord Genuity’s Yuri Zoreda to $44 from $50 with a “buy” rating.
“Q4 EPS missed consensus by 9 per cent due to a 3-per-cent organic sales decline, reflecting ongoing market challenges that have persisted into early 2025. Despite these headwinds, we remain positive on ADENTRA’s long-term demand drivers, potential M&A synergies from Woolf, solid margin performance, and a robust balance sheet with 2.4 times net debt to EBITDA,” she said.
* CIBC’s Hamir Patel to $44 from $49 with an “outperformer” rating.
“While weakening consumer sentiment and elevated mortgage rates are likely to weigh on investor sentiment towards building products companies over the near term, we note that, with 80 per cent of the company’s sales derived from housing end markets (split evenly between new res and R&R), ADEN’s long-term volumes should be supported by North American housing activity remaining above mid-cycle levels given favorable long-term demographic trends and elevated home equity levels. At the same time, we expect further M&A in coming years as the company progresses with its Destination 2028 plan (which includes targeting $800MM of additional run-rate revenues from acquisitions),” said Mr. Patel.
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Seeing risks properly reflected in its share price, ATB Capital Markets analyst Tim Monachello upgraded Mattr Ltd. (MATR-T) to “outperform” from “sector perform” previously.
“MATR shares were up 15 per cent on March 14, 2025, after reporting largely in-line Q4/24 results; we believe MATR’s strong performance was a reflection of its relatively optimistic outlook commentary that called for 10-per-cent-plus revenue growth across three of its four legacy business lines in 2025, other than Flexpipe, where it expects flat revenue year-over-year,” he said.
“While investors will still need to endure at least two quarters of meaningful one-time costs, we believe one-time costs peaked in Q4/24 and MATR should be reporting relatively clean quarters by H2/25 with an improving margin profile through 2025. Regarding tariffs, MATR is most exposed in its Composites Technologies segment, though we believe its U.S. facility additions in 2024 provide strategic optionality, and we believe inflation in steel prices could create an offsetting tailwind to composite tanks and pipe demand. Overall, while we believe MATR continues to face macro uncertainties over the medium-term, we believe these risks are now well reflected in its share price, down 14 per cent year-to-date and down 40 per cent from 52-week highs; despite the uncertain macro backdrop, we believe MATR’s strategic initiatives over the past 12-18 months position it to begin delivering stronger revenue growth rates and margin expansion in H2/25 and beyond, providing a catalyst for longer-term equity performance. MATR trades at 5.8 times|4.4 times EV/adj. EBITDAS (continuing operations) with 6-per-cent|14-per-cent FCF yields in 2025e|2026e.”
His target dipped by $1 to $16. The average is $16.31.
Other target changes include:
* Stifel’s Ian Gillies to $14 from $18.75 with a “buy” rating.
“MATR is coming close to the end of its transition away from the energy industry towards industrial end markets, but a lack of conviction in estimates remains a gating factor for the equity,” Mr. Gillies said. “Our 2025 EBITDA estimate is down 12.4 per cent to $185-million and 2026 EBITDA estimate is lower by 8.7 per cent to $219-million, due to uncertain end market demand and the potential for tariff impacts. We remain constructive on the stock given the 2026 valuation of 9.2 times P/E and a 10.2-per-cent FCF yield. Our conviction would increase dramatically if our 2025 estimates stabilize, and we begin to see some upside. Until that point, an inexpensive valuation is unlikely to warrant much investor interest.”
* Canaccord Genuity’s Yuri Lynk to $19 from $22 with a “buy” rating.
“It was one of the messiest quarters we’ve seen in terms of adjustments that were either unforseen or reclassified and thereby excluded from EBITDA, contrary to prior guidance,” Mr. Lynk said. “However, these impacts largely offset each other. For example, our estimate anticipated $7 million of severance that was in fact $5 million and reclassified and added back to EBITDA as well as $6 million of MEO expense that ended up being $4 million, for a net benefit of $4 million. This was offset by Q4/2024 EBITDA including $0.6 million of executive severance expense, $2.6 million customer order provision, and $1 million in inventory staging costs, for a net hinderance of $4 million.
“The beat vis-a-vis our estimate was top line driven. Management provided a 2025 qualitative outlook broadly in line with our model while sharing a somewhat reassuring update on the potential impact of tariffs. All told, we come away from the quarter with a largely unchanged positive view on the stock.”
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With the release of stronger-than-anticipated fourth-quarter 2024 results, National Bank Financial analyst Gabriel Dechaine thinks Sagicor Financial Co. Ltd. (SFC-T) enjoyed a “solid overall finish to the year.”
After the bell on Thursday, the Barbados-based financial services company reported core earnings per share for the period of 20 cents, exceeding both the analyst’s 16-cent forecast and the consensus estimate on the Street. The beat was driven by higher-than expected investment earnings and lower expenses and financing costs.
While Sagicor saw its U.S. Fixed annuity sales dip, Mr. Dechaine is predicting a rebound alongside the firm’s stronger earnings guidance for 2025.
Q4/24 U.S. Fixed annuity sales of $152-million were down nearly 50 per cent quarter-over-quarter and resulting in the company falling approximately 10 per cent short of its $1-billion full-year target,” he sai. “Management attributed the shortfall to interest rate volatility and tighter credit spreads. Management expects sales of $300-million-plus in Q1/25, as drawdowns in equity markets result in stronger demand for fixed annuities. Guidance for 2025 stands at $1-billion-plus, which is consistent with the $100-million/month sales guidance rate provided during Q3/24.
“For fiscal 2025, SFC expects core earnings of $100-$108-million and Core EPS (basic) of 74-80 cents, which implies a roughly 18-per-cent growth rate at the mid-point (and 17 per cent above our prior estimate). Additionally, the company expects EPS growth of 10 per cent in 2026. SFC also expects ROEs to trend towards its 13-per-cent medium term target over a 3-year time frame (F2024A at 10 per cent).”
The analyst also emphasize “positive” capital developments for Sagicor, including a raise to its dividend.
“Going forward, SFC expects future capital returns to be more ‘tilted’ towards dividends, given that buybacks tend to reduce liquidity in a stock with low trading volumes,,” he said. “Accordingly, SFC announced a 12.5-per-cent increase to its quarterly dividend to 6.75 cents per share. Separately, SFC is expected to record a $54-million post-tax gain (of which $44-million was realized in Q4/24) on the sale of its 9-per-cent equity stake in Playa Holdings in Q1/25. This capital will be used to support the U.S. fixed annuity business.”
Increasing his forecast to reflect higher expected investment earnings and lower operating expenses, Mr. Dechaine bumped his target for Sagicor shares to $11 from $9.50, reiterating an “outperform” rating. The average target is $10.06.
Elsewhere, other analysts making target adjustments include:
* Scotia’s Meny Grauman to $12 from $10 with a “sector outperform” rating.
“Sagicor ended a strong year for the shares with a strong quarterly result as core EPS beat the Street by 10.5 per cent in Q4,” said Mr. Grauman. “More importantly, the company provided updated guidance for both 2025 and 2026 that points to continued momentum ahead, including core EPS growth of between 17 per cent to 26 per cent in 2025 and over 10-per-cent growth in 2026. Performance in the U.S. will continue to be central to the Sagicor story, and although VA sales missed expectations in 2024 and Management is guiding to continued volatility in VA sales in 2025, it still believes that it will be able to deliver over US$1-billion in sales this year. This confidence in the US VA market is driven by supportive demographic trends, and should also be helped by recent equity market volatility. SFC shares are up 35% over the past 6 months, but the shares are still trading at 20-per-cent discount to book value despite an ROE that has moved into the low teens.”
* RBC’s Darko Mihelic to $9 from $8.50 with an “outperform” rating.
“SFC’s adjusted EPS was a penny below our estimate and we view the dividend increase and updated guidance as solid, although our core ROE estimates are conservative compared to guidance. We mainly reflect financing cost savings from the refinancing of debt and we expect strong growth in the U.S. business in 2025 (SFC expects US$1 billion in production for the year),” said Mr. Mihelic.
* Acumen Capital’s Trevor Reynolds to $11 from $10.25 with a “buy” rating.
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While macro uncertainty weighed on Haivision Systems Inc.’s (HAI-T) first-quarter 2025 financial results, Paradigm Capital analyst Daniel Rosenberg thinks the video infrastructure provider is “operating more efficiently and is more profitable compared to last year.”
“We think the delays from government revenue will be recouped eventually but year-over-year growth comparables will continue to drag on sentiment until then,” he said in a report released before the bell.
On March 13, the Montreal-based company reported quarterly revenue of $28.2-million, down 18.6 per cent year-over-year and below the consensus estimate on the Street of $30.2-million as delays in government revenue, and the transition away from selling third-party products, continue to weigh on the top line. Adjusted EBITDA of $0.4-million and an adjusted earnings per share loss of 4 cents also fell below expectations ($3.4-million and a profit of 2 cents.
“Management expects revenue growth to recover in H2 and accelerate to double-digit growth in FY26,” Mr. Rosenberg said. “Underscoring management’s outlook is the introduction of several new 5G transmitter products and the ramp-up of the U.S. navy contract, all slated for the second half this year. The company is also seeing increased momentum in the global defence sector and expects to have a larger footprint in this space. On tariffs, management noted that it has taken active measures to mitigate against potential threats but has experienced some operational complexities. It remains confident in being able to optimize its supply chain process.”
Keeping a “buy” rating for Haivision shares, he trimmed his target to $5.25 from $5.75. The average is $5.31.
“The company’s products are high value, generating sizeable margins of 70 per cent. Its scale and operating leverage is leading to improved profitability and cash flow generation. Management has demonstrated a successful track record of M&A through eight acquisitions, and we see potential to further consolidate a complex and fragmented market,” Mr. Rosenberg said.
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In other analyst actions:
* In response to Agnico Eagle Mines Ltd. raising its stake in the company through the exercising of a share purchase agreement, Scotia’s Ovais Habib increased his Collective Mining Ltd. (CNL-T) target to $12 from $9.50 with a “sector outperform” rating. The average is $12.79.
“We view the announcement as positive for CNL shares as AEM’s increased investment in the company and ongoing support of the project continues to lend confidence to the quality of the exploration package at Guayabales. As a result, we have increased the EV/oz multiple that we assign to the Guayabales and San Antonio projects in our NAV estimate, which yields a new price target,” said Mr. Habib.
* National Bank’s Mohamed Sidibé trimmed his target for shares of Denison Mines Corp. (DML-T) to $4.15 from $4.30 with an “outperform” rating, while Raymond James’ Brian MacArthur reduced his target to $3.70 from $3.90 with an “outperform” rating. The average is $3.97.
* Ventum Capital Markets’ Rob Goff bumped his Illumin Holdings Inc. (ILLM-T) target to $3.40 from $w with a “buy” rating. The average is $3.35.
“Following the positive recalibration of Q3/24, the significant outperformance in Q4/24 revenue and adj. EBITDA represents critical validation. The clear focus across the year on removing points of friction for clients backed by moves to strengthen selling capabilities, account management, and product enhancements are clearly evident in the outperformance across managed, self-service, and exchange services,” said Mr. Goff.
* TD Cowen’s Tim James increased his Magellan Aerospace Corp. (MAL-T) target to $19 from $18 with a “buy” rating. The average is $15.
“Revenue/EBITDA growth of 8 per cent/53 per cent and 290 basis points of gross margin expansion encouraging,” he said. “While Q4 results were better than expected, tariff-related uncertainty is expected to limit short-term share price upside. We assume strong return to target is H2/25 weighted.”
* Mr. James lowered his Transat AT Inc. (TRZ-T) target to $1.75 from $2 with a “hold” rating. The average is $1.59.
“Booking trends suggest stronger-than-previously expected F2025 yield environment, though the risks related to tariffs/economy are increasing. We continue to believe the share-price upside will be limited due to high financial leverage, narrow margins, P&W engine issues and uncertainty resulting from tariff-related and FX headwinds,” said Mr. James.
* In response to in-line quarterly results and unchanged guidance, National Bank’s Shane Nagle raised his Wheaton Precious Metals Corp. (WPM-T) target to $120 from $115 with an “outperform” rating. The average is $109.07.
“Our Outperform rating is predicated on WPM’s stable financial position and high-quality, low-cost long-life asset portfolio. The valuation is more compelling relative to peers and in a challenging deal environment within the royalty/streaming sector, embedded organic growth supports an improved outlook,” he sai.