Inside the Market’s roundup of some of today’s key analyst actions
Valuation multiples in the Canadian telecom sector are bottoming, supported by more discipline in initiating promotional discounts, said Desjardins Securities analyst Jerome Dubreuil.
Mr. Dubreuil, in looking ahead to the coming earnings season, said analyst expectations for the quarter appear achievable. This suggests the market has a better grasp of the industry’s challenges and headwinds, in contrast with recent quarters which saw frequent downward estimate revisions by analysts, he said.
“In wireless, pricing trends are encouraging, although the second quarter is typically not the most rigorous gauge of pricing discipline. Looking ahead, while we expect promotions during the back-to-school period, we believe the greater discipline on device subsidies and flanker brand plans could represent a catalyst for the sector,” Mr. Dubreuil said in a note to clients.
“While our long-term growth expectations for the sector remain modest, the improving wireless competitive dynamics, signs of estimate stabilization, and the fact that we believe there is room for telco additions in many institutional portfolios support an equal-weight position, in our opinion,” he added.
Rogers Communications (RCI-B-T) is his top pick ahead of the earnings season, and he raised his price target on the stock to C$49 from C$45: “We believe the company will benefit from numerous catalysts going forward, including further formalization of a reduction in capital intensity expectations and potential minority sales of MLSE, leading to deleveraging. The recent closing of the Blackstone transaction alleviates balance sheet uncertainty.”
He also nudged up his price target on Cogeco (CCA-T), to C$74 from C$72: “Competitive pressure in the U.S. remains a headwind, and we expect this to continue to weigh on net adds this quarter.”
His price target was maintained for Telus (T-T) at C$25: “The company now ranks second in our pecking order. We believe its premium valuation raises the bar in terms of capital allocation decisions. However, the health-care monetization opportunity remains an attractive option in relation to accelerating the company’s deleveraging efforts, in our view.”
For Quebecor (QBR-B-T), the price target was maintained at C$44: “The stock has outperformed significantly, thanks to market share gains in wireless. We continue to like QBR longer-term, but with the stock now trading at 7.3x EV/NTM EBITDA, we do not expect its relative outperformance vs the Big 3 to be as pronounced in the coming year.”
And for BCE (BCE-T), his price target stayed at C$39: “We expect the company to improve its relative wireless performance after many difficult quarters in a row—this should support the stock’s valuation going forward."
Canaccord Genuity analyst Aravinda Galappatthige also looked ahead to the telecom earnings season this morning and made a couple price target tweaks: Rogers went to C$48 from C$47 and Quebecor went to C$43.25, up C$2.50.
In a note, Canaccord commented: “The Canadian Telecom total returns stand at +6% year-to-date compared to +9% for the S&P TSX, reflecting the drawdown in the sector during Q1. However, there has been some observable momentum in the space led by Rogers and BCE in recent weeks. In fact, over the past month, the sector is up 13% compared to 2% for the S&P/TSX. We attribute this to a phase of relative discipline in the promotional environment and more tangible actions to reduce balance sheet leverage by the incumbents. Tactical stock selection versus sector moves: Given the severity of the downswing in this sector over the last two years, there may be a temptation to see this as initial green shoots of a more sustained rebound across the space, however, we do not necessarily see it this way. First, any progress that could be made in terms of pricing (ARPU) is likely to be offset by weakening volumes, especially in wireless, as the impact of slower immigration is compounded by a more cautious macro backdrop. Hence, we are still around the 0% (core telecom) top-line growth profile in the near term. Second, while some initial moves have been made to ameliorate elevated debt levels, there is still a long way to go, with more manageable leverage ratios likely a post F2027 event. Third, interest rate considerations have been unhelpful and as illustrate in this note, the dividend yield to treasury spread sits at the historic long-term average. As a result, we believe that stock selection on a tactical basis is the more sound option. Presently, we see the potential catalyst of a monetization of Rogers’ sports assets as such an opportunity. Similarly, the possibility of Quebecor enjoying improved wireless economics (as price discounting eases), whilst also enjoying a dominant net adds share, argues for remaining constructive on Quebecor.”
**
Scotia Capital has downgraded its ratings on two stocks in the industrials and transportation sector.
Both Mullen Group (MTL-T) and TFI International (TFII-T) were downgraded to “sector perform” ratings from “sector outperform”, with analyst Konark Gupta citing weak second-quarter trends and uncertainty about the second half of this year. He says investors would be better off in the sector holding the Canadian rails.
“Freight markets remain volatile, tracking the U.S. trade policy roller coaster and the moving tariff deadlines,” Mr. Gupta said. “By the time the dust settles, we could potentially be talking about 2026 outlook as uncertainty is likely to persist or heighten in 2H.”
“We believe the industry largely avoided the Q2 air pocket seen coming out of Q1, thanks to the temporary pause in U.S. tariffs. However, the quarter turned out mixed with the Canadian rails exceeding our volume expectations but other modes, particularly trucking, missing. Our 2H visibility is blurred by the fact that some future demand was pulled forward into 1H, while the U.S. tariff on/off saga continues. It is difficult to predict how businesses and consumers will react to the moving parts of the economy following the One Big Beautiful Bill Act. Thus, our stock preference is incrementally biased toward sector outperform-rated CNR and CP, given easy 2H comparisons, positive momentum in bulks and intermodal, and self-help levers.”
Mullen Group’s price target was cut to C$16 from C$16.5 and TFI International’s to C$140 from C$145.
He also raised his price target on Canadian Pacific Kansas City (CP-T), to C$120 from C$115, and continues to rate the stock “outperform”. The price hike comes “on our slightly improved multi-year EPS outlook and expanded 2026E P/E multiple of 22x (was 21x), reflecting our increased confidence on the back of continued strong traffic momentum (growing mid-single digits) and growing KCS synergies,” he said.
“We continue to believe CP deserves a premium multiple relative to peers and its long-term average of about 20x, owing to its faster/industry-leading EPS growth profile through 2028, improving free cash flow conversion, and accelerating shareholder returns,” he added.
**
TD Securities analyst Derick Ma downgraded Sandstorm Gold (SSL-T) to “sell”, recommending investors tender their shares to the takeover offer by Royal Gold. The target price is unchanged at C$14 and reflects Royal Gold’s current offer price.
“The industrial logic of the proposed transaction is sound and will result in a stronger combined entity with balanced growth across the investment time horizon, ample liquidity to deploy, and a simplified corporate structure. We believe a superior competing offer is unlikely, given the strength and depth of the current deal market and availability of other potential M&A targets in the sector,” Mr. Ma said in a note.
**
Raymond James analyst Brad Sturges initiated coverage on RioCan Real Estate Investment Trust (REI-UN-T) with an “outperform” rating and a C$20.50 target. He sees some positives coming out of store closures at Hudson’s Bay, for which it’s a co-landlord.
He noted that RioCan’s portfolio is weighted towards Canada’s Canada’s six largest urban markets with populations over 1 million.
“At March 31, RioCan’s WALT (Weighted Average Lease Term) was about 7.9 years, or the third-longest WALT in the Canadian retail REIT sector, while about 88% of RioCan’s annualized net rent was derived from necessity-based retail tenants,” the analyst noted.
“The Hudson’s Bay Company’s (HBC) recent CCAA protection filing store closures is expected to reduce income generated within the REIT’s RioCan-HBC JV investment. We view the potential for RioCan to monetize a portion or all of its stabilized RioCan Living MFR platform at estimated fair market values (FMV), which can also improve its balance sheet strength by repaying debt and simplify its Canadian commercial portfolio, and act as a possible near-term positive catalyst,” he added.
**
National Bank of Canada analyst Adam Shine raised his price target on Thomson Reuters (TRI-T) to C$300 from C$286 while looking ahead to the company’s second quarter results on Aug. 6. He still rates the stock an “outperform”.
“We forecast Revs $1785M, Adj. EBITDA $645M (margin 36.1% vs. 37.1%) and Adj. EPS $0.81, with consensus at $1791M, $655M (margin 36.6%) and $0.84, respectively,” Mr. Shine told clients.
He said a $500 million share buyback is expected from the company in the second half of this year.
**
BMO analyst Stephen MacLeod raised his price target on Aritzia (ATZ-T) to C$84 from C$80, contending that the company “is well-positioned to execute on its significant U.S. growth opportunity, reflecting strong momentum, growing brand affinity, and Everyday Luxury positioning.”
He said takeaways from BMO’s June web traffic analysis for Aritzia are positive: “Total traffic growth accelerated (+5% in June vs. +2% in May). Canada improved (-12% vs. -17% May/25), U.S. remained strong (+24% vs. +26% May/25).”
He said he expects Aritzia to report “solid” fiscal Q1 results after the bell Thursday, “with an upside bias to guidance (due to reduced China tariffs).”
***
BMO’s Stephen MacLeod also raised his price target on Groupe Dynamite (GRGD-T), going to C$33 from C$28.
He told clients: “We believe that Groupe Dynamite is well-positioned for growth in the North American fast fashion women’s apparel market, with several drivers of annual mid-teens adj. EBITDA growth. Takeaways from our Jun/25 web traffic analysis are on balance positive. June growth accelerated modestly (+2% y/y vs. +1% in May); Canada declined (-13% y/y vs. -7% May/25), while U.S. growth accelerated (+17% vs. +8% May/25). Notably, U.S. new users increased solidly (+34%). While the tariff situation remains fluid, positively U.S.-China trade tensions have eased.”
**
JPMorgan analyst Patrick Jones downgraded his rating on Lundin Mining (LUN-T) to “neutral” from “overweight” while raising his target price slightly to C$15.6 from C$15.3.
He said tightness in the copper market in the first half of this year, resulting from pull-forward demand ahead of potential tariffs, could dampen demand and prices in the second half.
He said there was a lack of catalysts for Lundin until its Vicuna integrated technical study is published in early 2026. Meanwhile, its valuation is now more in line with peers.
**
In other analyst actions:
TMX Group (X-T): Barclays raises target price to C$58 from C$56
Microsoft (MSFT-Q): Piper Sandler raises target price to US$600 from US$475. BMO also raised its target, to US$550 from US$485.
Oracle Corp (ORCL-N): Piper Sandler raises target price to US$270 from US$190 and raises rating to “overweight” from “neutral”
BlackRock (BLK-N): Jefferies raises target price to US$1210 from US$959; Barclays raises target price to US$1220 from US$990