Inside the Market’s roundup of some of today’s key analyst actions
National Bank Financial analyst Gabriel Dechaine thinks predicts earnings per share revisions will be the “primary driver” of Canadian banks of 2026 with the sector currently trading at 13.3 times forward EPS, which is a near record level.
“In terms of positioning for EPS revision, we believe a combination of factors is optimal: 1) a relatively lower bar in 2026 for the Capital Markets business, via a relatively lower contribution to fiscal 2025 consolidated PTPP growth; and 2) relatively lower consolidated revenue growth forecasts in 2025,” he said. “We acknowledge that the former could beget the latter.
“Our top pick, RY, experienced the second lowest amount of multiple re-rate in 2025 (after BMO). And surprisingly, the bar set for its Capital Markets business is relatively low, with this business contributing 25 per cent to its consolidated PTPP growth (second lowest in the group, which averaged a 38-per-cent contribution).”
In a research report released Thursday, Mr. Dechaine made four 2026 predictions for the sector:
1. “‘Peak PCLs’ will still be a moving target.”
Analyst: “Most banks suggested that credit performance should improve during H2/26. We believe uncertainty ahead of CUSMA re-negotiation will maintain elevated impaired PCL ratios over the course of the full year.”
2. “The Capital Markets business needs a new horse.”
Analyst: This segment delivered 32-per-cent PTPP growth in 2025, on the back of a 30-per-cent surge in Global Markets revenues. For momentum to continue, Corporate & Investment Banking revenues, up a comparatively lower 10 per cent, need to accelerate."
3. “Buyback binge will plateau, at best.”
Analyst: “Big-6 banks repurchased $15-billion of shares in 2025, making it the biggest year for buybacks ever. We believe 2026 activity will be the same, if not less (as implied by TD and RY commentary). Deregulation could free up additional capital that could argue for more buybacks. However, we believe any accommodations from the regulator will be provided on the condition that excess capital generation is prioritized for supporting the Canadian economy rather than for buybacks.“
4. “AI initiative spending benefit disclosures will be enhanced.”
Analyst: “AI projects are the latest ‘shiny toy’, albeit with much greater credibility in terms of potential benefits to sector profitability. Only RY and TD have disclosed financial returns from their AI strategies. We expect more banks to follow suit and, possibly, for benefit estimates to be increased as banks learn of more (and better) potential applications.”
Mr. Dechaine made one rating revision to his coverage universe, raising Toronto-Dominion Bank (TD-T) to “outperform” from “sector perform” previously.
“This upgrade is contradictory to our view that upside from multiple re-rate is limited, considering TD was the biggest beneficiary of this driver in 2025,” he explained. “However, context is important, and TD’s 2025 rebound is simply a recovery from its significant valuation compression in 2024. Since then, the stock is still a lagging performer and still trades at an in-line valuation multiple.
“From a potential EPS revision standpoint, TD screens well, especially in terms of a relatively lower bar set by its Capital Markets business in 2025 that makes its in-line revenue forecasts potentially more ‘exceedable’. Additionally, the bank’s impaired PCL ratios imply the lowest level of improvement in 2026. Finally, the $6-7 billion buyback program commitment doesn’t hurt, and we expect TD will remain active even in a market pullback.”
His target for TD shares rose to $134 from $124. The average target on the Street is $125.09, according to LSEG data.
“It’s admittedly difficult to upgrade a stock after a 60-per-cent-plus year-to-date return,” he added. “However, if we dial back to January 1, 2024 as the starting point, TD’s 47-per-cent return is below the 65-per-cent Big-6 average and is the second lowest in the group. We believe its relative performance outlook remains strong, especially if the points noted in the previous bullet materialize.
“We are increasing our target to $134 from $124, which reflects an increase to our target multiple to 13.5 times from 12.5 times. We apply this multiple to our 2027 estimated EPS, which is unchanged. The higher multiple is warranted, in our view, to reflect TD’s ongoing financial performance turnaround, especially in its Canadian P&C segment, potential for positive EPS revisions and its strong excess capital position. Based on these factors and the potential return to our new target, we are also upgrading TD.”
Mr. Dechaine’s other ratings and targets are:
- Bank of Montreal (BMO-T) with a “sector perform” rating and $181 target. Average: $184.20.
- Bank of Nova Scotia (BNS-T) with a “sector perform” rating and $100 target. Average: $100.90.
- Canadian Imperial Bank of Commerce (CM-T) with a “sector perform” rating and $128 target. Average: $127.23.
- EQB Inc. (EQB-T) with a “sector perform” rating and $98 target. Average: $99.71.
- Royal Bank of Canada (RY-T) with an “outperform” rating and $235 target. Average: $233.30.
Mirroring the “constructive” outlook from Desjardins Securities’ economists for the year ahead, financial services equity analyst Doug Young is expecting “modest” economic growth in both Canada and the U.S., warning of “some uncertainty given the trade environment.”
“We remain overweight Canadian banks and lifecos for 2026,” he said. “Now to be fair, bank and some lifeco stocks performed well through 2025, and we would not be surprised if both sectors take a pause early in the year, which has historically been a seasonal pattern. Uncertainty around CUSMA could also temper bank and lifeco stock returns earlier in the year.
“For Canadian banks: (1) The economic and macro backdrop has improved; lower relative interest rates and a pick-up in government stimulus spending (per the 2025 Federal Budget) should help. (2) In our view, we are closer to the peak in credit losses. (3) We see room for potential upward revisions to estimates over the coming year(s). (4) We expect stock buybacks to be elevated as the banks push toward adjusted ROE targets. (5) We have increased our target prices for the group to reflect the roll-forward of our ROE estimates to FY27. For the lifecos: (1) We see several earnings growth drivers heading into 2026. (2) The group is focused on pushing toward medium-term core, base or underlying ROE targets. (3) Many of the headwinds in 2024/25 could turn into tailwinds. (4) We expect lifecos to further reap the benefits of prior acquisitions. (5) All four lifecos are sitting on significant excess capital; while capital has been put to work over the past few years, additional capital deployment could materialize in 2026. For the P&C insurers: The underlying trends are encouraging, driven by past pricing actions, risk-selection actions, hard pricing conditions and other initiatives taken by the management teams. However, a further softening of the insurance cycle in certain large-case commercial lines and a potential deceleration of price increases across personal lines could be a headwind for the stocks in 2026.”
In a report released Thursday, he revealed his top picks for 2026:
1. Canadian Imperial Bank of Commerce (CM-T, “buy”) with a $135 target, rising from $132. The average is $127.23.
Analyst: “After nine consecutive quarters of EPS beats, CM has been rebranded as the bank of ‘no surprises’. As we look forward, we do not expect any material change to CM’s strategy under its new CEO. In FY26, we expect the bank to deliver consistent performance across NIMs, expenses, credit and buybacks. The bank is on track to achieve its 15-per-cent-plus cash ROE target. All of this is why we believe it deserves a premium multiple.”
2. Toronto-Dominion Bank (TD-T, “buy”) with a $133 target, rising from $126. Average: $125.09.
Analyst: “. 2025 was a transformative year for TD as its new CEO swiftly addressed investor concerns on the US AML issue, sold the Schwab stake and committed to buying back stocks (not acquisitions) with the capital that was freed up from the sale. At its September 2025 investor day, management provided a clear message and reaffirmed its medium-term adjusted ROE target of 16-per-cent-plus (along with a slew of new guidance items). In FY26, we like: TD’s focus on maintaining a strong position in Canadian banking; the potential for earnings upside in US retail banking; the potential for growth in capital markets from further leveraging the US Cowen business; another year of support from $6–7-billion-plus in stock buybacks. Assuming it delivers on all of the above, we see room for valuation multiple expansion (we view TD’s valuation as attractive)."
3. Sun Life Financial Inc. (SLF-T, “buy”) with a $94 target. Average: $91.30.
Analyst: “There are several themes we like, including: (1) a peer-leading medium-term underlying ROE target of 20 per cent; (2) several potential earnings growth drivers over the coming year(s)—improved U.S. dental results, potentially more stable US stop-loss results, momentum in Asia, SLC Management hitting its stride and stock buybacks; (3) $6-billion in excess capital and debt capacity (excludes capital earmarked for SLC buyups in 2026), and it generates an attractive amount of excess capital annually; and (4) valuation— we believe concerns with U.S. dental, U.S. stop-loss and MFS are more than factored into SLF’s current valuation."
4. Manulife Financial Corp. (MFC-T, “buy”) with a $55 target. Average: $55.07.
Analyst: “There are four themes we like and, if management delivers, we believe there is room for further valuation multiple expansion. These themes are: (1) core earnings growth across its Asian franchise; (2) momentum in Canada under its new refreshed strategy; (3) reinsuring more lower-ROE legacy businesses, although we do expect less activity on this file vs the past year and a half; and (4) stock buybacks. It’s as simple as that! ”
5. Trisura Group Ltd. (TSU-T, “buy”) with a $56 target. Average: $57.
Average: “There are three themes we like: (1) growth outlook for surety and warranty, two of its larger businesses (represents 45 per cent of TSU’s underwriting profits); (2) management’s belief that reserve bumps in U.S. fronting are in the rearview mirror; and (3) valuation—we believe the Canadian division alone is worth $35–40 per share."
Along his target revisions for CIBC and TD, Mr. Young made these other changes (in order of preference):
- Royal Bank of Canada (RY-T, “buy”) to $240 from $230. Average: $233.30.
- National Bank of Canada (NA-T, “buy”) to $180 from $175. Average: $169.51.
- EQB Inc. (EQB-T, “buy”) to $110 from $107. Average: $99.71.
- Bank of Nova Scotia (BNS-T, “hold”) to $104 from $100. Average: $100.90.
- Bank of Montreal (BMO-T, “hold”) to $189 from $180. Average: $184.20.
National Bank Financial analyst Richard Tse thinks Computer Modelling Group Ltd.’s (CMG-T) strategy to “monetize a long-standing customer base provides the potential for accelerating growth [and] acquisitions play a big role in that pursuit.
However, he now sees “a balanced risk-to-reward profile” for investors, leading him to lower his recommendation for the Calgary-based producer of reservoir simulation software for the oil and gas industry to “sector perform” from “outperform” upon resuming coverage on Thursday.
“In our view, it’s still too early to call as the Company is still scaling its acquisition and integration efforts,” said Mr. Tse in a client note. “Since embarking on its new strategy in 2022, CMG has closed three acquisitions – Bluware (2023), Sharp Reflections (2024) and SeisWare (2025) - deploying $73-million in total capital and acquiring $50-million-plus in annualized total revenue. Notably, these acquisitions have been CMG’s main growth engine, driving 15 per cent year-over-year inorganic growth through FH1’26. We’d note t, hose assets are still being integrated. Despite commodity headwinds, we see the Company continuing this M&A path given $133-million in available liquidity ($33-million in cash + a new $100-million credit facility; targeting a limit of 2.0 times Adj. EBITDA on leverage). Management doesn’t consider target valuations an obstacle, provided after-tax IRR is reasonable.
“As for organic growth, CMG has seen a notable decline in recent quarters (down 15 per cent year-over-year in FH1’26) offsetting acquisition growth; this has left total revenue growth flat over the past six months. This was due in large part to the non-renewal of a top 10 customer last quarter going to a global competitor offering aggressive pricing (likely SLB, in our view). While isolated at this point, it’s not unreasonable to assume it adds a degree of risk for other customers. Nonetheless, CMG has pointed to a resumption of organic growth in recurring revenue which is set to turn positive in Q4 off its Shell licensing agreement for CMG’s suite of simulations solutions, including CoFlow. All in, we think those puts and takes on execution lead to a balanced risk-to-reward profile.”
The analyst now has a $6 target for Computer Modelling shares, down from $9, which was the high on the Street, previously and below the $6.25.
“What would make us more constructive? 1. FH2 pickup vs. FH1. For us, the strategy/execution is still new for this name, which means there’s a limited track record despite the sound strategy; 2. Substantive progress on recent acquisition integrations. Either evidence of accelerating OpEx synergies or up-/cross-sell of acquired offerings; 3. Confirmation that lost customer from price pressure was only a one-off,” concluded Mr. Tse.
In a separate report, Mr. Tse said he sees Tecsys Inc. (TCS-T) remaining “resilient amidst healthcare headwinds,” however he resumed coverage with a “sector perform” rating, down from “outperform” previously due to valuation concerns.
“Bottom line, Tecsys is a high-quality, under-recognized vertical SaaS name with a solid base of recurring revenue, a credible path to double-digit growth and margins with emerging optionality around data and AI via TecsysIQ,” he said. “Execution in FY26 to date strengthens our conviction; that said, the macro backdrop for its market remains challenging given the cost savings ambition of the U.S. administration in healthcare, leading to a balanced risk-to-reward profile at the time of writing.”
Despite his downgrade, Mr. Tse applauded the progress of the Montreal-based software company, which provides providing supply chain management solutions primarily to the healthcare sector.
“The only knock is the macro as healthcare budgets come under growing pressure in the U.S. – causing elongated sales cycles," he said. “Despite that, the Company is showing resilience with a robust healthcare pipeline that’s up 60 per cent year-over-year and a pharmacy pipeline that’s tripled versus last year. Evidence of that execution is revealed in the Company’s operating results. Most recently, Tecsys reported record total revenue of $48.6-million for FQ2’26, up 15 per cent year-over-year (approximately 13 per cent in CC), with SaaS, maintenance & support, and services together now accounting for over 90 per cent of revenue. The Company’s recurring SaaS revenue reached $19.7-million (up 22 per cent year-over-year), supported by strong Elite platform momentum. At the same time, Adj. EBITDA margin is now trending into the high single digits where we forecast FY26 margin at 8.3 per cent (vs. 7.6 per cent and 5.6 per cent in FY24 and FY25, respectively).
“All in, we think Tecsys is executing well on its strategy. That said, the U.S. healthcare environment remains challenging on several fronts – the current administration is looking to rein in federal healthcare spending, including proposals that target roughly $1-trillion in Medicaid (and related) reductions over the next decade, which will arguably continue to constrain investment across the sector."
Mr. Tse now has a $38 target for Tecsys shares, down from $50 and below the $48 average.
“What would make us more constructive? improving or stabilizing macro. With expectations for an increasingly challenging U.S. healthcare budget environment – particularly the uncertainty around Medicaid cuts, Affordable Care Act subsidy reductions, and rising pressure on hospitals from an increase in uncompensated care – stability on this front would be a positive catalyst. Management emphasized that these pressures are elongating deal cycles rather than reducing demand, with multiple vendor-of-choice awards awaiting budget clearance. An improving, or at least stabilizing, environment would provide an improved risk-to-reward profile and accelerate conversion of Tecsys’ pipeline,“ he concluded.
Stifel analyst Martin Landry is “constructive” on Premium Brands Holdings Corp.’s (PBH-T) US$662-million acquisition of Illinois-based Stampede Culinary Partners, projecting earnings per share accretion of 5 per cent in 2026 rising to 9 per cent in 2027 with synergies and sales growth
“This acquisition is highly complementary to PBH as it marks the entrance in the sous vide category, a rapidly growing market,” he said. “According to ‘The State of Sous Vide’ report, the U.S. sous vide industry is valued at $15-billions and growing at 12-14 per cent annually.
“Roughly 90 per cent of Stampede’s client base consists of national restaurant chains and other food service clients, compared to PBH’s strong presence at retail with grocers and club stores. This provides PBH with excellent cross-selling opportunities to bring Stampede’s products into grocers and club stores. There could also be reverse cross-selling opportunities for PBH to penetrate Stampede’s client base.”
Coming off research restriction following a concurrent financing of $815-million in equity and debt, Mr. Landry emphasized Stampede has “significant installed capacity which can support up to an additional US$400 million in sales.”
“Valuation appears full at 9.7 times trailing EBITDA, but assuming successful cross-selling initiatives, there is a clear path to growing Stampede’s EBITDA,” he said. “PBH is well acquainted with management at Stampede as they have been eyeing the sous vide category for years. The acquisition is expected to close at the beginning of January pending the expiration of the Hart-Scott-Rodino review period. We increase our 2026 and 2027 EPS by 5 per cent and 9 per cent, respectively, to reflect the acquisition.”
With those raises, Mr. Landry increased his target for shares of B.C.-based Premium Brands to $110 from $106, keeping a “buy” rating. The average is $114.25.
“After a super cycle of CAPEX investments, which reached more than $900-million in the last three years, Premium Brands is about to harvest the benefits of its investments,” he added. “The additional capacity has allowed PBH to bid and win new programs which should drive revenue growth for the coming two years. Hence, the company should enter a phase of higher capacity utilization, reduced CAPEX and reduced interest payments, all of which should stimulate FCF
“Impressive market share gains. Innovation is at the core of PBH’s strategy. Management aims to develop new products to drive demand rather than competing on price with existing products. Successful new product introductions resulted in meaningful new program wins within the QSR, retail and c-store channels. We see PBH growing faster than the industry and gaining market share for at least the next two years.”
Elsewhere, Scotia Capital analyst John Zamparo upgraded Premium Brands to “sector outperform” from “sector perform” with a $120 target, up from $99.
“The change is the product of several factors. (1) Lower leverage and what we expect is a short (6-12 months) timeline to further delever meaningfully. (2) A modestly accretive acquisition with room for growth. (3) More U.S. exposure, where we expect stronger consumer spending growth in 26. (4) Modestly higher EBITDA estimates from Distribution (PFD) and stronger USD assumptions. We use 2027E as our basis for valuation, applying a 10.3 times blended EBITDA multiple, discounted by 10 per cent. Primary risks are an underwhelming Q4 or 26 guide, or a re-acceleration in beef inflation,” said Mr. Zamparo.
Other analysts making target revisions include:
* National Bank Financial analyst Vishal Shreedhar to $113 from $104 with a “sector perform” rating.
“We are constructive on this sizable deal; however, our preference would have been for PBH to show further momentum in its core business before adding complexity,” said Mr. Shreedhar. “We note that 70 per cent of the deal was equity funded (excluding convertibles).”
“Over the medium term, we believe PBH’s outlook will be supported by organic growth and EBITDA margin expansion. We value PBH at 9.5 times our 2027 pro forma EBITDA.”
* CIBC’s Ty Collin to $120 from $115 with an “outperformer” rating.
“We believe the acquisition is a strong strategic fit with potential for longer-term upside, though ideally it would have been executed after more progress on deleveraging,” said Mr. Collin.
* Desjardins Securities’ Chris Li to $120 from $110 with a “buy” rating.
“Our favourable view on the acquisition is predicated on Stampede’s high-growth business (double-digit sales growth) with a differentiated and on-trend offering; upside to synergies, especially from procurement cross-selling opportunities; immediate EPS accretion; and leverage reduction,” said Mr. Li.
* Raymond James’ Michael Glen to $125 from $115 with an “outperform” rating.
“We view the transaction as very well aligned with Premium Brands’ core strategy to expand their U.S. manufacturing capacity, with Stampede offering significant unutilized capacity in the core protein category. The acquisition also strengthens presence in the foodservice channel (with several large chains indicated as customers), and nicely complements existing PBH growth initiatives that center on the retail and club store channels. Stampede is also recognized as a leader in the sous vide category (we believe upwards of 40 per cent of sales), which adds an important manufacturing capability to PBH’s product portfolio, and allows for significant cross-selling opportunities,” said Mr. Glen.
RBC Dominion Securities analyst Walter Spracklin sees a “muted” first half of 2026 for North American railway companies following by “a modest recovery” to close out the year.
“The average return for the rails in our coverage was flat Q4 quarter-to-date underperforming the S&P 500 by 27 basis points,” he said in a client report. “CSX shares performed best following Q3 results, which demonstrated in our view a clear turn-around in operational performance, in addition to share gain resulting from BNSF making efforts to divert traffic away from NSC. CN shares also outperformed the group following a solid quarter and a meaningful reduction in 2026 capex which we see a key driver of FCF into next year. UNP shares traded in line with the group as positive operating momentum and long-term merger benefits were offset by conference commentary pointing to downside versus prior consensus estimates into Q4. NSC shares traded down, with share price performance continuing to reflect the price of UNP shares and the implied likelihood the merger is approved. Finally, CP shares performed worst given volume headwinds versus consensus expectations.”
Mr. Spracklin reaffirmed Canadian Pacific Kansas City Ltd. (CP-T) his “overall best idea” as “the company continues to execute on its KCS integration.”
“We have a highly positive view on the CP-KCS combination and believe the merits of the deal are extensive,” he explained. We believe the network advantage is by far the most compelling merit providing an unparalleled network reach that covers Canada, the U.S. and Mexico; and we point to significant opportunities in Grain, Fertilizer, Intermodal, Auto and Crude. We have already started to see significant share gain in Auto and Intermodal; and we continue to expect CPKC’s volume outperformance to persist longer-term and therefore support a higher valuation multiple. In addition, we consider CP management to be one of the top teams in North America and have strong confidence in the ability of this team to execute on the integration of this deal and achieve (or exceed) the targets announced. Key is that the shares have come off meaningfully due to the potential for tariffs, which we view as unwarranted, and we therefore see an attractive opportunity in the shares at today’s levels."
The analyst reaffirmed an “outperform” rating and $127 target for CPKC shares. The average is $121.88.
Heading into the new year, Mr. Spacklin sees CP and rival Canadian National Railway Co. (CNR-T) as the top stocks in the industry for investors to own.
“We also like CN into the quarter and expect EPS estimates to move higher in coming weeks on volume and in our view strong margins. While the guide may prove conservative, we believe this is built into buyside expectations already,” he said.
His target for CN shares slid to $153 from $158 also with an “outperform” rating, but he sees “the most immediate upside on CN in the event of cyclical turn on the macro, given the cheap valuation.”
“Our Q4 EPS estimate goes to $2.00, from $1.95, above consensus $1.97 on the back of strong volumes and solid car velocity trends,” he said. “Our 2025 EPS growth estimate of 6.1 per cent (consensus 5.8 per cent) is in line with guidance for up MSD to HSD [mid to high single digits]. In terms of 2026 guidance, our 2026 EPS growth estimate moves lower to up 8.3 per cent (from up 12.2 per cent; cons. up 8.5 per cent) on the back of our assumption for a weak H1 followed by a recovery in H2. That said, we expect a more conservative guide compared to our assumptions, and we therefore see guidance coming in at EPS up MSD (or even up LSD to MSD). Given already negative investor sentiment in the shares, in addition to the investor view that the guide will likely be conservative, we would view this guidance as neutral to sentiment.”
In a report titled Powering the AI-enabled field service worker era, RBC Dominion Securities analyst Paul Treiber initiated coverage of Blackline Safety Corp. (BLN-T) with an “outperform” recommendation, calling it “a pioneer of connected employee safety solutions” with “a unique revenue model where high-margin recurring services (58 per cent of TTM [trailing 12-month] revenue) complement hardware revenue (42 per cent).”
“With AI, we see connected safety devices shifting from compliance purchases to productivity-enhancing investments,” he said. “We anticipate Blackline’s strong growth momentum to continue and expect solid operating leverage to drive margin expansion and FCF growth.”
“Blackline’s next-generation product line is likely to add several new features which we expect to help enable AI chatbot assistants for remote workers. AI shifts safety devices from a compliance cost to a productivity enhancing investment. We believe Blackline’s next-gen device will increase the company’s TAM to include push-to-talk and field service management, markets which are nearly 13 times larger than portable gas detectors.”
Predicting the Calgary-based company’s operating leverage is likely to drive margin expansion, Mr. Treiber thinks its valuation “already takes into account near-term headwinds,” setting a target of $9 for shares, which implies a 37-per-cent return. The average is $9.50.
“Blackline is trading at 3.0 times NTM EV/S [next 12-month enterprise value to sales] and 42 times NTM EV/EBITDA, which is down from 3.5 times and 60 times, respectively, at the end of 2024,” he said. “We see Blackline’s valuation as attractive, given our forecast for 23-per-cent revenue CAGR [compound annual growth rate] and 100-per-cent adj. EBITDA CAGR between FY25e and FY28e. We believe the cyclical slowdown in some verticals is already reflected in valuation and has overshadowed Blackline’s attractive fundamentals, including its growth, a rising mix of recurring revenue, and increasing profitability.”
Previewing the year ahead of North American paper and forest products companies, RBC Dominion Securities analyst Matthew McKellar made a series of target revisions.
“2025 was a challenging year for much of the forest products group, and with demand conditions seemingly remaining tepid into early 2026, we continue to prefer exposure to names where a supply response has either already played out to a significant degree (e.g., the containerboard group) or is seemingly in progress (e.g., lumber producers, although we maintain a preference for larger cap WFG and its conservative balance sheet while we wait for a stronger trend to become evident). With valuations across the space mostly ranging between attractive and reasonable compared to historical averages, we see upside for many names as fundamentals and sentiment improve.
“Stock recommendations into 2026 • In Canada, we like Cascades, Doman Building Materials and West Fraser. • In the U.S., we like International Paper, Smurfit WestRock and Weyerhaeuser. • Outperform-rated small cap names worth a look: Interfor, Rayonier Advanced Materials."
Mr. McKellar raised his targets for these TSX-lised companies:
- Cascades Inc. (CAS-T, “outperform”) to $16 from $14. The average is $13.40.
- Canfor Pulp Products Inc. (CFX-T, “sector perform”) to 50 cents from 40 cents. Average: 57 cents.
He reduced his targets for:
- Canfor Corp. (CFP-T, “outperform”) to $15 from $16. Average: $15.36.
- Interfor Corp. (IFP-T, “outperform”) to $13 from $14. Average: $11.75.
- West Fraser Timber Co. Ltd. (WFG-N/WFG-T, “outperform”) to US$85 from US$91. Average: US$82.88.
In other analyst actions:
* National Bank’s Zachary Evershed raised his target for Alaris Equity Partners Income Trust (AD.UN-T) to $28.50 from $27 with an “outperform” rating after coming off research restriction following the close $115-million upsized bought deal offering, while Desjardins Securities’ Gary Hp bumped his target to $26 from $25.50 with a “buy” rating. The average is $24.75.
“The value of Alaris’s common equity investments now totals $330-million (cost basis), roughly 18 per cent of the portfolio. With a substantial return to target, minimal exposure to geopolitical headwinds, and robust execution growing and diversifying the partner portfolio continuously, we rate AD Outperform,” said Mr. Evershed.
* CIBC’s Mark Petrie hiked his Aritzia Inc. (ATZ-T) target to $132 from $95, keeping an “outperformer” rating. The average is $111.66.
“We are updating our estimates for Aritzia ahead of FQ3 earnings in early January. With the successful launch of the Aritzia app at the end of October, along with continued strength in U.S. Alt data, we see meaningful upside to management sales guidance for both the quarter and the full year,” said Mr. Petrie.
* Desjardins Securities’ Bryce Adams increased his target for shares of Aya Gold & Silver Inc. (AYA-T) to $32 from $30 with a “buy” rating. The average is $25.
“We are updating our model following the recently updated Zgounder mine plan, which we view as a credible operational plan that reflects recent results and the decision to increase open pit tonnes. The mine plan includes 5.8moz of silver production in 2026, which in our view sets expectations for guidance. Backed by recent operational results, we expect that Aya will be able to execute on the new plan and for AYA shares to re-rate on improved operational clarity,” said Mr. Adams.
* TD Cowen’s Sam Damiani resumed coverage of Dream Industrial REIT (DIR.UN-T) and Dream Unlimited Corp. (DRM-T) with “buy” ratings and targets of $14.50 and $28, respectively, up from $14 and $27. The averages are $13.83 and $38.
* In response to the announcement that its Heal Wellness brand has secured a 10-store franchise development agreement in Colorado, Ventum Financial’s Rob Goff, who is the lone analyst covering Toronto-based Happy Belly Food Group Inc. (HBFG-CN), raised his target to $2.65 from $2.40 with a “buy” rating.
“The announcement builds on the 10-unit HEAL commitment for Texas. For perspective, we understand that Texas has 1,500 Starbucks locations and is considered in growth mode, while Canada has roughly the same number but has seen declines. Establishing brands in the U.S, is a critical step towards revaluing the brand making it a sale candidate as part of HBFG’s strategy to optimize and monetize brands, with a portion of the proceeds then available to purchase or develop new brands with compelling ROICs, and the remainder to repurchase shares. We believe positive initial introductions in Texas and Florida could support meaningfully positive revisions beyond 2026. We look for U.S. revenues to begin in Q2/26, although our baseline forecasts do not include them,” he said.
* In a client report titled A Familiar Value Creation Playbook, Stifel’s Cole McGill initiated coverage of Koryx Copper Inc. (KRY-X) with a “buy” rating and target of $3.75 per share. The average target on the Street is $3.69.
“Koryx Copper is laser focused on advancing the large scale, long life, Haib copper porphyry project in Namibia,” he said. “Led by a management team with a track record of multiple successful exits, we think the Haib copper project is to benefit from a triple threat of African cost structure, low elevation and clean metallurgy, all traits that set it apart from comparatively scaled projects in the Americas. We foresee development copper assets attracting increased vertical interest as the concentrate market is entering a period of structural deficits over the next five years, where every $0.50/lb increase in the copper price provides 33-per-cent NAVPS accretion to KRY, highest amongst our coverage. With shares trading at 0.35 times P/ NAV, (peers 0.48 times), the current twelve rig, 55km drilling blitz is set to unlock higher grade tonnes scheduled early in the mine life alongside Au + Mo upside, catalyzed on the upcoming 2026 MRE + PFS.”
* After Montage Gold Corp. (MAU-T) was granted new exploration permits by the government of Côte d’Ivoire, Cormark Securities’ Nicolas Dion raised his target for its shares to $10.50 from $9.75 with a “buy” rating. The average is $9.13.
“These additions further strengthen MAU’s pipeline in Côte d’Ivoire,” he said. “Recall the company recently announced the acquisition of African Gold and its Didievi project, also in Côte d’Ivoire.
“Once built, Koné will be among the largest and lowest cost gold mines in West Africa. We model an 18-year mine life producing more than 350,000 ounces per year in the first few, and more than 300,000 oz/yr in the first 9 at a less than $1,300/oz AISC (mine-level). MAU trades at a very reasonable 0.66 times our NAV at $4,000/oz.”