Inside the Market’s roundup of some of today’s key analyst actions
Following the release of its second-quarter results after the bell on Wednesday, National Bank Financial analyst Cameron Doerksen upgraded his recommendation for Canadian Pacific Kansas City Ltd. (CP-T) to “outperform” from “sector perform” previously, seeing a “more compelling” relative valuation.
“Whereas CPKC shares have been trading at a 4.5 P/E turn premium to the U.S. Class I rail average over the past five years, today CPKC trades at 22.0 times our 2025 EPS forecast versus the U.S. average of 20.8 times,” he said in a client note. “Driven by the prospects of merger activity in the U.S., we suspect that funds have shifted into the U.S. rails at the expense of the Canadian rails, but the net effect is that CPKC shares are about as inexpensive as they have been since the announcement of the CP-KCS merger. We therefore see the current share price as an attractive entry point.”
CPKC reported quarterly revenue of $3,699-billion, up 3 per cent year-over-year and below Mr. Doerksen’s $3.852-billion estimate and the consensus forecast of $3.798-billion. Core adjusted earnings per share grew 7 per cent to $1.12, but it also missed expectations ($1.18 and $1.13, respectively).
“As we had highlighted in prior research, Q2 operating performance was hurt by an IT cut over on the legacy KCS network (a $0.03-$0.04 EPS headwind), but metrics have been steadily improving over the past two months,” he noted.
“So far early in Q3, CPKC’s RTMs [revenue ton miles] are up 2.0 per cent year-over-year with particular strength in Automotive (up 17.0 per cent) and Intermodal (up 12.4 per cent), both of which management expects will stay strong through the balance of the year. Potash also looks to be stronger in H2. We expect that many of the unique growth drivers that have boosted CPKC’s volumes in H1/25 can continue in the coming quarters (MMX Mexico-U.S. intermodal train volume growth which was up 40 per cent year-over-year and 20 per cent sequentially, new cold chain volumes with Americold partnership starting in August, international intermodal growth with Gemini Alliance).”
Mr. Doerksen now thinks CPKC is positioned as “a good alternative for rail investors looking to avoid regulatory uncertainty” and emphasized the company is positioned for growth moving forward. He also acknowledged ongoing trade uncertainty, but he is now “increasingly confident that north-south volumes to and from Mexico will continue to grow even in the face of potentially higher tariffs.”
“Earlier this week, Union Pacific and Norfolk Southern announced a merger agreement that would create a U.S. transcontinental railroad,” he said. “Importantly, the merger will not incorporate a voting trust structure, which has been used in past transactions allowing for target company shareholders to realize the financial proceeds before regulatory approval. As such, NSC and UNP shareholders will face regulatory uncertainty until early 2027 (at least) while the STB reviews the merger proposal. CPKC shares are therefore more likely to trade on fundamentals versus the merging railroads trading on less predictable factors, potentially making CPKC the more attractive option in the rail space for some investors. UNP and NSC have highlighted that a merger would be more competitive with Canadian railroads in capturing U.S. bound volumes coming into Canadian ports, but CPKC highlights that less than 1 per cent of its revenue comes from U.S. bound intermodal volumes offloading at a Canadian port. Given the north-south focus for CPKC in the U.S., we see a limited potential incremental impact from the merger from a competitive point of view. In fact, CPKC management expects that any merger would require concessions from the regulator, which could result in better access for CPKC in certain markets or opportunities to expand CPKC’s network reach through new partnerships or track divestitures.
“Buoyed by merger-related synergies and new business wins, CPKC’s volumes have been solid despite the economic uncertainty around tariffs. In Q2, RTMs rose 6.5 per cent and so far in Q3, RTMs are up 2.0 per cent. We expect that many of the unique growth drivers that have boosted CPKC’s volumes in H1/25 can continue in the coming quarters (MMX Mexico-U.S. intermodal train volume growth which was up 40 per cent year-over-year and 20 per cent sequentially, new cold chain volumes with Americold partnership starting in August, international intermodal growth with Gemini Alliance).
The analyst maintained his $119 target for CPKC shares. The average target on the Street is $120.42, according to LSEG data.
Elsewhere, other analysts making target revisions include:
* Citi’s Ariel Rosa to US$90 from US$94 with a “buy” rating.
“CP continues to see mid-single digit volume (RTM) growth, as it reaffirmed its outlook for adjusted EPS up 10-14 per cent in 2025, marking a contrast with its Canadian peer CN which cut its EPS growth outlook (mid-to-high single digits from 10-15 per cent),” said Mr. Rosa. “In the face of multiple headwinds – freight recession, unfavorable FX fluctuations, tariff uncertainty, IT issues with KCS – it is encouraging to see CP executing well, with the company committing to a sub-60 op. ratio for the full-year. CEO Keith Creel also weighed in on the proposed UP-NS merger, cautioning that integrating two railroads of that size is a ‘thousandfold’ more challenging than the CP-KCS integration, committing to be a ‘loud voice’ advocating for CP’s interests.”
* Scotia’s Konark Gupta to $122 from $120 with a “sector outperform” rating.
“Our multi-year EPS outlook is largely unchanged following mixed Q2 results as management maintained guidance and remains confident in executing to its long-term business plan,” sai Mr. Gupta. “Our multiple compression reflects U.S. railroad stocks’ increased attractiveness in the short term in light of potential transcontinental mergers, although we don’t see a significant risk to our thesis for Canadian rails and would opportunistically take advantage of any material dips. Our views are informed by the recent railroad industry expert call as well as CP’s preliminary thoughts on potential M&A, which suggest there could be some opportunities and low risks.”
* TD Cowen’s Cherilyn Radbourne to $118 from $117 with a “hold” rating.
“Q2/25 EPS was a slight miss, but CPKC expressed confidence in its latest full-year guidance. We do not see either Canadian rail franchise as particularly affected by the prospect of U.S. transcontinental rail mergers, but CPKC’s premium multiple could come under pressure as investor funds flow into the U.S. rails. The pending renewal of Keith Creel’s contract as CEO in 2026 is also a concern,” she said.
* CIBC’s Kevin Chiang to $122 from $124 with an “outperformer” rating.
“With the company holding its full-year outlook, we maintain our positive long-term view on CPKC,” he said.
* Desjardins Securities’ Benoit Poirier to $123 from $124 with a “buy” rating.
“CP reported relatively in-line 2Q results and reiterated its 10–14-per-cent EPS guidance for the year. Operational delays related to the systems cutover negatively impacted EPS by 3-4 cents, but carry-over to 3Q is limited,” said Mr. Poirier. “Our thoughts expressed in our 2Q preview remain unchanged (especially given the weak Canadian economy) as we no longer expect CP to exceed the 10–14-pr-cent EPS growth targeted by management earlier in the year — we now forecast EPS growth of 10 per cent.”
* ATB Capital Markets’ Chris Murray to $124 from $123 with an “outperform” rating.
“The focus on the call was squarely on the Class 1 merger announced earlier in the week,” he said. “The Company confirmed that it will consider all competitive options given the potential implications, but does not see the proposed transcontinental network as a significant threat to its volume base and believes near-term uncertainty across shipping lines could create opportunity for its network. The Company remained active on its buyback which we expect to continue given improving leverage levels and recent weakness in the shares. We are encouraged by CPKC’s volume growth and margin outlook and would remain buyers.”
* JP Morgan’s Brian Ossenbeck to $131 from $125 with an “overweight” rating.
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RBC Dominion Securities analyst Maurice Choy thinks the 6.9-per-cent drop in Capital Power Corp. (CPX-T) shares on Wednesday following the release of its second-quarter was “unwarranted” and investors bullish on North America’s power demand outlook will “ultimately win through stronger Alberta power (and possibly PJM) prices and further deployment of growth capital.”
“While landing gigawatt-scale data centers at Genesee would be positive, it is not essential for the stock to work, and further, the stock may be favourably rerated towards its U.S. IPP peers should CPX’s U.S. exposure continue rising,” said the analyst, prompting him to raise his recommendation for the Edmonton-based company to “outperform” from “sector perform” previously.
He added: “As a base case, our stock investment thesis does not assume growth associated with landing gigawatt-scale data center customers at Genesee, or the ability for the three units on site to generate power above the 466 MW MSSC limit set by AESO. We think there’s a window of opportunity for Genesee to serve these customers, and this depends on a series of favourable outcomes related to AESO’s long-term framework design (more details later this year), clarity on electricityrelated policies and market design (e.g., federal CER, industrial carbon tax, REM), and MSSC-related changes. While this opportunity may ultimately materialize, the emergence of smaller-scale data center load should sufficiently lead to better Alberta power prices (as seen through the outer year forward curves), and a stronger EBITDA by Capital Power.”
In a report released before the bell, Mr. Choy also emphasized “solid discretionary cash flow generation and favourable market fundamentals underpin Capital Power’s long-term EBITDA growth,” while the dividend increase announced Wednesday is also enticing for investors.
“While Capital Power had only just closed the PJM acquisition deal in June, we sense that there could be more cash flow per share accretive M&A deals to come as the company builds a more meaningful and strategic platform in certain U.S. power markets,” he said. “Backed by its strong balance sheet, solid discretionary cash flow generation, as well as its recent track record of deals and value creation, we conservatively see capex-driven EBITDA growth to be at least a high single digit CAGR (on an equity self-funded basis), with upside via recontracting of existing facilities at higher rates. ”
“As expected, the annual dividend rate was increased by 6 per cent. Capital Power has increased the annualized dividend rate to roughly $2.76/share (up 6 per cent from the previous rate of $2.61/share), which is in line with our estimate. The company also reiterated its annual dividend growth target of 2-4 per cent beyond 2025 and long-term target.”
Predicting higher future cash flow generation, Mr. Choy raised his target for Capital Power shares to $67 from $65. The average is $64.50.
Elsewhere, National Bank’s Patrick Kenny moved his target to $63 from $62 with an “outperform” rating.
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After a second-quarter earnings beat and “more confident” conference call with analysts than in the recent past, National Bank Financial analyst Maxim Sytchev sees Toromont Industries Ltd. (TIH-T) possessing “steady growth at [a] premium valuation (and bulletproof balance sheet).”
“We were a bit concerned heading into the quarter around tough equipment comps and how that could impact margins; it appears we have troughed, hence margins actually improving slightly year-over-year, to the tune of 40 basis points,” he said. “AVL opportunity appears to be margin and growth accretive which shareholders will welcome; we continue to believe that back-up power, enclosure and cooling, over time, can bring incremental and more meaningful growth to TIH (while CIMCO’s margin improvements have been impressive). With provincial budgets in better-than-feared shape despite the immigration slowdown, we should be back in positive earnings revision territory for TIH.”
After the bell on Tuesday, the Toronto-based company reported revenue for the quarter of $1.376-billion, a gain of 1 per cent year-over-year and 3 per cent higher than the Street’s expectation of $1.343-billion. Adjusted EBITDA of $243-million beat the Street by 11 per cent ($218-million).
Mr. Sytchev found three main reasons for increased optimism from management’s post-release remarks: “1) Equipment pricing has found a floor; with better infra / decent commodity backdrop, that should continue; 2) AVL (power enclosure business) flew under the radar at the time of acquisition but financials suggest the business is producing margin-enhancing performance; this is a positive surprise; 3) Cooling opportunity will take time to evolve, likely organically (with cross-selling capabilities, there is optionality).”
Emphasizing Equipment Group margin normalization is “likely nearing its end” and seeing current AVL economics as “highly attractive” with growth opportunities “promising,” Mr. Sytchev raised his target for Toromont shares to $140 from $130, reiterating an “outperform” rating. The average is $143.56.
“We slightly raised our margin forecasts to account for tailwinds from higher margin AVL contribution, CIMCO operating leverage, as well as from higher product support/rental activity going forward,“ he explained. ”Pricing has also settled as per management’s commentary; with infra projects still rolling in, it would be difficult to see equipment pricing compress. For additional context, 2024A headline consolidated EBITDA margin was 17.4 per cent and for H1/25A margin seems to have improved year-over-year – providing confidence in our year-end estimates. We model low-mid single-digit growth in revenue on a prospective basis, partly backstopped by the current backlog and accelerated momentum in power systems, especially due to data centers build outs in the U.S. A favourable commodity pricing backdrop (especially gold) and sustained infra investment at provincial and federal levels are medium-term positives and could provide further upside to our estimates.”
Elsewhere, other changes include:
* TD Cowen’s Cherilyn Radbourne to $154 from $153 with a “buy” rating.
“Toromont’s Q2/25 results reinforced our view that Q1/25 was just a blip. The macro backdrop is a bit uncertain and a recent fleet replacement cycle is dampening demand for parts somewhat. However, the prospect of nation-building infrastructure projects is positive, and Toromont’s installed base has expanded massively in 2021+, especially in mining, which creates a visible product support annuity,” she said.
* CIBC’s Krista Friesen to $148 from $129 with a “neutral” rating.
“TIH delivered solid Q2 results which showcased the strength of the recently acquired AVL business. With that said, the underlying environment remains uncertain with many customers hesitant to execute on major projects given the uncertainty in the market (as demonstrated by the 28-per-cent decline in the Equipment Group’s organic backlog),” she said.
* Raymond James’ Steve Hansen to $125 from $122 with a “market perform” rating.
“We are increasing our target price on Toromont ... following better-than-expected 2Q25 results,” said Mr. Hansen. “That said, while we continue to admire Toromont’s unrivaled operating discipline, fortress balance sheet, and long-term track record, we are comfortable sticking to the sidelines until greater demand/margin visibility emerges within its core equipment business. We’d also like to see a more attractive entry point where the valuation better reflects the lingering macro risks in eastern Canada.”
* Scotia’s Jonathan Goldman to $140 from $132 with a “sector perform” rating.
“We are remaining on the sidelines due to narrow return to target,” he said.
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While he continues to view Tourmaline Oil Corp. (TOU-T) as “one of the highest quality names in the space” following “somewhat mixed” second-quarter results, Raymond James analyst Luke Davis now sees “better opportunities among peers near-term.”
That led him to lower his recommendation for the Calgary-based company to “market perform” from “outperform” previously.
“Tourmaline’s 2Q was punctuated by the highly anticipated update to their long-term development plan, outlining a robust NEBC infrastructure build out aligned with growing demand for LNG off Canada’s west coast,” said Mr. Davis. “The plan incorporates a materially higher capital spend in the interim, which was likely expected to some degree - though we were surprised by the magnitude - and combined with deferrals and decreased guidance this year, we would not be surprised to see some near-term weakness. That said, the company remains the premier player for natural gas exposure within Canada with a diverse portfolio in the most prolific parts of the basin, underpinned by unmatched scale.”
After the bell on Wednesday, Tourmaline reported quarterly production that fell in line with expectations, however cash flow per share of $2.16 fell 5 per cent below Mr. Davis’s $2.28 estimate due to lower realizations.
“We have tweaked our model to reflect revised assumptions influenced both by 2Q25 actuals and management’s revised 5-year plan,” he added. “At a high level, we now see a decrease in free cash flow driven by a lower production forecast compounded by higher capex in 2026+. We continue to model dividends of roughly $770-million annually, although the higher capital program pushes Tourmaline’s effective payout ratio to 112 per cent/99 per cent in 2025/26. It’s worth noting that Tourmaline’s creative deal structure has allowed it to retain a healthy balance sheet, with D/CF still tracking near 0.5 times in 2025/26.”
The analyst cut his target for Tourmaline shares by $2 to $74. The average on the Street is $76.82.
Elsewhere, other changes include:
* ATB Capital Markets’ Patrick O’Rourke to $77 from $76 with an “outperform” rating.
“Overall, we view the event as a long-term positive, although the stock may observe some near-term volatility as investors digest formally lowered near-term FCF in the newly unveiled long-term growth plan with TOU ultimately emerging as a much stronger business model later in the decade,” said Mr. O’Rourke.
* CIBC’s Jamie Kubik to $74 from $75 with an “outperformer” rating.
“The revised multi-year plan is unsurprisingly back-end weighted for free cash flow growth, and should see Tourmaline achieve 850 MBoe/d of production by 2031, at which point annual free cash flow could surmount $3-billion,” he said.
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RBC Dominion Securities analyst Irene Nattel reiterated her “constructive” view on Pet Valu Holdings Ltd. (PET-T) ahead of the release of its second-quarter results on Aug. 5, seeing its business remaining “fundamentally strong despite ongoing softness in consumer behaviour” and forecasting 8-per-cent annual earnings growth.
“In our view, PET is well-positioned to manage through the current uncertain environment,” she said. “Prior period supply chain transformation and digital upgrades, management of near-term costs, product innovation, promotions and price cuts where appropriate to maintain competitiveness, and leaning into loyalty to target promotional activity to highest value customers and ongoing store openings/franchising underpin forecasted high SD EBITDA CAGR [compound annual growth rate]. Reflecting recent share repurchase patterns and fine-tuning other assumptions leaves our Q2/2025 and 2025E forecasts essentially unchanged.”
Touting the Markham, Ont.-based company’s “capital-light, high return business model,” Ms. Nattel is expecting “largely stable” year-over-year EBITDA for the quarter, noting forecasts for full-year 2025 “remain toward the midpoint of the EBITDA/EPS guidance ranges.”
“Forecasting acceleration of FCF to underpin return of capital to shareholders in 2025 and beyond,” she added. “Based on filings and PET announcement, during Q2 the Company repurchased 2.3 million shares for $65.5-million. Our model incorporates 2025/26/27 annual share buyback in the range of 2.5-3.75 million or close to 4-6 per cent annually with modest EPS accretion 1-2 per cent.”
With change to her valuation period, Ms. Nattel hiked her target for Pet Valu shares to a high on the Street of $41 from $35, keeping an “outperform” rating. The average is $34.95.
“Based on our analysis, as we move past the 2023-2025 period of peak investments in infrastructure to support growth, underlying strengths of PET’s high-margin, generally capital-light business model, sector-leading ROIC [return on invested capital] more than 20 per cent and attractive FCF should become more evident. Revised target multiple 11.5 times (up 1 times), 1 times below long-term average reflecting ongoing pressure on SSS [same-store sales] due to continuous cautious consumer behaviour. 2025 estimated free cash flow yield 4 per cent rising to 7 per cent in 2027.”
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In other analyst actions:
* TD Cowen’s Tim James trimmed his AirBoss of America Corp. (BOS-T) to $6.50 from $7 with a “buy” rating. The average is $5.20.
“High margin Defence contract wins have us increasingly confident in deleveraging and strong EBITDA growth through H1/26. Softness in industrial economy/rubber compound demand related to global trade could weigh on recovery and push-out our expected 12-month return to the second half of investment horizon,” he said.
* Stifel’s Daryl Young raised his target for shares of Air Canada (AC-T) to $25 from $23 with a “buy” rating. The average is $25.31.
“We are updating our estimates following AC’s Q2/25 results, making relatively minor changes; the environment remains stable, with strong initial demand/yield indicators heading into the fall and winter seasons (continued off-peak booking strength into Sun destinations, Atlantic, and Pacific markets),” he said. “We are a bit perplexed by the 12-per-cent share price decline given the relatively inconsequential EBITDA miss, unchanged guidance, and strong FCF generation, and believe the pullback presents a buying opportunity. 2025 was always going to be a transition year; AC is navigating an inflationary cost environment particularly for wages (absorbing the new pilot contract plus eventual flight attendant agreement), and still needs to grow into its infrastructure base with capacity just now recovering to 2019 levels. However, the company continues to execute well, with strong 6th Freedom and Premium results, much improved on-time performance, robust FCF, and incoming aircraft slated for new routes that position for multi-year GDP+ growth.”
* RBC’s James McGarragle cut his Algoma Steel Group Inc. (ASTL-T) target by $2 to $8 with a “sector perform” rating. The average is $11.44.
“Q2 results were in line with the company’s pre-release and Q3 commentary pointed to lower EBITDA quarter-over-quarter due to the impact from tariffs,” he said. “We remain positive on the company’s transition to EAF and flag meaningful upside should a more transparent trade policy emerge. That said, with tariffs at 50 per cent and Canadian sheet pricing at a 40-per-cent discount to the U.S. benchmark, we continue to see significant risk related to tariffs.”
* National Bank’s Matt Kornack trimmed his Allied Properties REIT (AP.UN-T) target to $16 from $16.25 with a “sector perform” rating. Other changes include: TD’s Jonathan Kelcher to $20 from $18 with a “buy” rating and Desjardins Securities’ Lorne Kalmar to $18 from $17 with a “hold” rating. The average target on the Street is $18.25.
“Q2 results struggled a bit with non-renewals (54-per-cent retention in the quarter, below the REIT’s 75-per-cent goal) taking in-place occupancy 100 basis points lower,” he said. “AP has been successful in leasing space as committed levels did rise, but the timeline for these taking possession is quite long. That said, management painted a better picture on H2/25 performance. On the transaction front the post-quarter purchase of a 50-per-cent stake in a Vancouver development will undo some of the disposition deleveraging progress and the balance sheet remains stretched at 12 times ND/EBITDA with a payout ratio well in excess of 100 per cent.”
* Mr. Kornack raised his Boardwalk REIT (BEI.UN-T) target to $82.50 from $77.50 with an “outperform” rating. Other changes include: CIBC’s Dean Wilkinson to $84 from $80 with a “neutral” rating, TD’s Jonathan Kelcher to $87 from $85 with a “buy” rating, Raymond James’ Brad Sturges to $87.50 from $86 with an “outperform” rating, Desjardins Securities’ Kyle Stanley to $85 from $80 with a “buy” rating and RBC’s Jimmy Shan to $88 from $86 with an “outperform” rating. The average is $83.30.
“BEI’s print was largely in line, while carbon tax removal was additive to margin performance and will continue to be through the balance of the year with additional savings on things like insurance premiums and property taxes. New leasing spreads in AB inflected in June, while occupancy was relatively stable. Additional disposition activity was at slightly above NAV. The REIT will continue to benefit from mid-single-digit renewal increases and cost constraints in terms of 2025 NOI growth, prompting an increase to guidance ranges for both organic growth and FFO,” said Mr. Kornack.
* Mr. Kornack increased his target for First Capital REIT (FCR.UN-T) target to $21, exceeding the $20.58 average, from $19.50 with an “outperform” rating. Other changes include: CIBC’s Dean Wilkinson to $22 from $21 with an “outperformer” rating, TD Cowen’s Sam Damiani to $22 from $21 with a “buy” rating, Desjardins Securities’ Lorne Kalmar to $21.50 from $20 with a “buy” rating and RBC’s Pammi Bir to $22 from $20 with an “outperform” rating.
“FCR delivered a strong Q2 with an improved outlook for organic growth in 2025 and likely beyond,” he said. “Renewal spreads approached record highs (16.2 per cent) as occupancy improved to 97.2 per cent. These KPIs have climbed higher since 2021, reflective of a resilient consumer and a tenant base that is playing catch-up to outsized population growth over the last decade. With leverage declining thanks to its disposition program, investment optionality is increasing.”
* RBC’s Paul Treiber trimmed his CGI Inc. (GIB.A-T) target to $175 from $185 with an “outperform” rating, while Desjardins Securities’ Jerome Dubreuil raised his target to $169 from $166 with a “buy” rating. The average is $166.23.
“Investors seemingly have little patience for the lack of visibility about the timing of the growth recovery and the long-term impact of AI—it could take a while before we have clear answers on these fronts. Indeed, decent results in the space have been met with negative market reactions, and 3Q was no different for CGI. That said, today’s update was better than anticipated and the partial alleviation of DOGE concerns should warrant upside, especially in light of the recent share price underperformance," said Mr. Dubreuil.
* Scotia’s Kevin Krishnaratne increased his Dye & Durham Ltd. (DND-T) target to $16 from $14 with a “sector outperform” rating. The average is $16.62.
“[Tuesday] night’s news that DND had initiated a strategic review which could see several shareholder value creation opportunities including an outright sale, sale of assets (that would help with reducing leverage), or a merger, came faster than we had expected," he said. “Although such reviews can take time (several months) and result in no changes, we are optimistic of the potential for positive changes as reflected in our increased target multiple (group of high margin software peers with leverage trade at 9.2 times). We also believe it is positive that the Board has been engaged with shareholders in recent weeks, including Plantro, while we also reference prior noted interest from potential buyers of late (including PE-firm Advent). We expect a positive reaction in the share price today on the back of this announcement (recall the stock reached $11.43 on July 7 when Plantro made initial special meeting request). Next up we await Q4 earnings in early September.”
* Cormark Securities’ Jeff Fenwick raised his Exchange Income Corp. (EIF-T) target to $78.50 from $67 ahead of its Aug. 12 quarterly release, keeping a “buy” rating. The average is $72.69.
* RBC’s Bart Dziarski cut his Intact Financial Corp. (IFC-T) target to $324 from $329, below the $331.46 average, with a “sector perform” rating, while Scotia’s Phil Hardie hiked his target to $339 from $325 with a “sector outperform” rating.
“We are perplexed with the mid-single digit weakness in the stock and view this as a near term buying opportunity,“ said Mr. Hardie. ”Operating earnings came in 30 per centahead of street expectations driven by much stronger than expected underwriting profitability, with BVPS also coming in ahead of forecast and seeing healthy growth. The primary knock was likely that the bar was set high with the stock trading at the upper end of the expected valuation range. While there was some divergence in top line performance between segments and moderation in the outlook for premium rate growth, this should not be overly surprising to investors, and more importantly, these changes are not expected to impact margins.
“Following a strong multi-year run, valuation remains the key investor hold back. Questions about what valuation multiple is reasonable and sustainable dominate the investor narrative rather than any deep concerns related to business fundamentals. We think the recent weakness in the stock combined with growth in BVPS will help alleviate some of these concerns, with risk-reward remaining favourable given an expected double-digit return in absence of multiple expansion.”
* Stifel’s Suthan Sukumar increased his Kinaxis Inc. (KXS-T) target to $245 from $225 with a “buy” rating. The average is $218.37.
“Kinaxis will be reporting FQ2 results after-market on August 6th,” he said. “We see a favorable demand backdrop amidst ongoing tariff uncertainty and expect a continuation of operational momentum from last quarter – namely record pipeline conversion and normalizing enterprise sales cycles – which should translate to another solid quarterly performance. The stock is not inexpensive, but with durable industry tailwinds and a FY SaaS guide already 90-per-cent covered by existing backlog, we see Kinaxis getting back to a beat-and-raise motion, supporting further multiple expansion. A new CEO appointment remains a key near-term catalyst. We raise our target price ... to reflect recent multiple expansion in the supply chain software peer group."
* Ahead of its Aug. 13 earnings release, TD Cowen’s Michael Van Aelst raised his Metro Inc. (MRU-T) target to $118 from $112 with a “buy” rating. The average is $105.
“MRU shares seen reacting favorably to a second straight quarter of double-digit EPS growth, should Q3/F25 EPS achieve our forecast of 13 per cent. Drivers are seen being a solid SSSG rate, favorable mix, DC efficiencies and declining duplicate O/H costs. We also see rather steady 12-per-cent growth in Q4/F25 and F26, providing investors with relatively predictable growth at a reasonable (even if above average) valuation,” he said.
* RBC’s Greg Pardy raised his Parex Resources Inc. (PXT-T) target to $18 from $16 with a “sector perform” rating, while Scotia’s Kevin Fink increased his target by $1 to $17 with a “sector perform” rating. The average is $17.26.
“Parex’s second-quarter results reflect improved operating performance, while its conscious focus on lower-risk development is designed to serve as a bridge to a higher risk-higher reward program in the Foothills trend in 2026+,” he said.
* RBC’s Keith Mackey hiked his Precision Drilling Corp. (PD-T) target to $100 from $89, keeping an “outperform” rating. Other changes include: Raymond James’ Michael Barth to $120 from $119 with an “outperform” rating and TD Cowen’s Aaron MacNeil to $77 from $71 with a “hold” rating. The average is $96.62.
“PD’s 2Q25 results were solid. We remain constructive on the underlying value in PD shares due to leading market share in a strong Canadian drilling market, relative gas exposure, pathway to organic de-leveraging, and increasing shareholder returns. At the margin, PD’s U.S. operations appear to be improving, while the Canadian growth trajectory has taken a pause. We increase our 2025/26 EBITDA estimates by 7 per cent,” said Mr. Mackey.
* Desjardins Securities’ Chris MacCulloch raised his Tamarack Valley Energy Ltd. (TVE-T) target to $6 from $5.50 with a “hold” rating. Other changes include: ATB Capital Markets’ Patrick O’Rourke to $6.25 from $6 with an “outperform” rating, Raymond James’ Luke Davis to $6.50 from $6 with an “outperform” rating, CIBC’s Jamie Kubik to $6.25 from $5.50 with an “outperformer” rating and RBC’s Michael Harvey to $7 from $6 with an “outperform” recommendation. The average is $6.52.
“Tamarack’s 2Q25 results continue to underscore the company’s successful waterflood program with production volumes trending ahead of expectations and annual guidance adjusted to reflect an attenuating decline rate. The company completed a tuck-in in the Clearwater subsequent to quarter-end, adding depth to the broader portfolio, while consolidating JV lands, further improving efficiencies. Overall, we think the story continues to improve and given strong operational momentum, an improved leverage profile, and robust return of capital strategy, we expect Tamarack will continue to filter toward the top of the list for energy investors,” said Mr. Davis.
* TD Cowen’s Graham Ryding bumped his Timbercreek Financial Corp. (TF-T) target to $8 from $7.50 with a “hold” rating. The average is $8.06.
“Timbercreek reported Q2/25 earnings that were below our estimates and consensus. Revenue missed expectations and PCLs were above our forecast. Offsetting however, in our view, is a notable improvement in Stage 2 and 3 loans. We have updated our estimates to reflect a larger portfolio given recent momentum,” he said.