RBC analyst highlights expansion potential in the yield-heavy energy infrastructure sector

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

A Globe and Mail report features prominently in a research report from RBC Capital Markets analyst Maurice Choy regarding new projects in the yield-heavy energy infrastructure sector,

“We believe investors will welcome the prominence of energy infrastructure in the draft list within the unconfirmed article by the Globe & Mail, and given it’s early days, the market will likely remain cautiously optimistic of the prospects that some of these projects will ultimately be built …Stock-wise, given the projects in the draft list, we anticipate investors will focus on: ○ Any role Enbridge may have to support the “Northwest Coast Oil Pipeline” project, with the company previously noting that it would like to see favourable legislation for major infrastructure projects that are in the national interest, support for energy production (we believe this means addressing certain policies, such as the emissions cap on oil and gas production, Bill C-48 Oil Tanker Moratorium Act, Bill C-69 Impact Assessment Act, and the industrial carbon tax), more Indigenous consultation and participation, as well as reasonable return trackers; ○ TC Energy’s Canadian Natural Gas Pipelines platform to support LNG export, including the next phase of Coastal GasLink should LNG Canada Phase 2 proceed; ○ Emera, Hydro One and Fortis, in terms of supporting offshore wind in Nova Scotia, Ontario’s Ring of Fire, and increased electricity interconnections involving PEI, respectively”

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BofA Securities analyst Ebrahim Poonawala is more bullish on Canadian banks than he has been over the past 18 months,

“Outsized stock reactions to good (but not great) 3Q25 results validated our view that investor positioning was light. Going forward, finality on a US trade deal (under the USMCA umbrella) should serve as a positive catalyst and cause businesses to move off the sidelines to hire / invest. Additionally, all eyes on whether the Carney administration can live up to its campaign promise of prioritizing pro-business policies … Big Six banks reported solid 3Q25 results (8.1-per-cent average EPS beat) led by Royal-RY (up 15.7 per cent), driving consensus 2026e EPS up 2.0 per cent vs pre-3Q (up 3.8 per cent year-to-date). Strong capital markets and rising net interest margins have offset elevated (but manageable) credit costs. We see 5-10-per-cent potential upside to our 2026e EPS on excess capital deployment (CET1 ratio at 13.3 per cent on average) and accelerating GDP growth, implying a relatively reasonable 11 times P/E and 1.6 times P/Book vs 14-per-cent average ROE forecast … Fundamentals supported by margin expansion, strong capital markets, capital flex vs. elevated (but manageable) credit costs TD well positioned for a continued re-rating on structurally higher ROE vs. prior decade; CM on execution/improving macro”

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BMO senior economist Robert Kavcic described regional differences in the domestic real estate correction,

“We’re probably looking at another month of relatively balanced overall Canadian housing market conditions, with ongoing (and in some cases, severe) regional variation. As a quick sample, Vancouver sales were up 2.9 per cent year-over-year; Toronto was up 2.3 per cent year-over-year; and Calgary was down 7.3 per cent year-over-year. While prices in some markets continue to edge higher, those in Toronto are still struggling. The Toronto benchmark price was down 5.2 per cent year-over-year in August, suggesting a roughly flat month-over-month move. Lower prices, and sellers finally letting properties go for under asking, do seem to be allowing the market to clear better, supporting transaction volumes. For broader context, this correction in Toronto prices remains historically significant (down 18% from the early[1]2022 high). It also mirrors, but doesn’t quite measure up (down) to, the 1990s bust. Still, even if the market settles here, it’s going to be a long way back to peak pricing, as has been our thesis for the past few years”

“BMO: ”The Toronto benchmark price was down 5.2% y/y in August, suggesting a roughly flat month-over-month move” – (research excerpt, chart) Bluesky

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Bluesky post of the day:

Diversion: “I’m a High Schooler. AI Is Demolishing My Education” – The Atlantic