Inside the Market’s roundup of some of today’s key analyst actions
While RBC Dominion Securities analyst Paul Treiber thinks Shopify Inc. (SHOP-Q, SHOP-T) is likely to eventually be a beneficiary of artificial intelligence, he acknowledged its shares are “getting caught up in broader AI disruption fears” and thinks “continued strong growth and AI traction may help stabilize [its] valuation.”
“Shopify’s valuation has dropped to 10 times NTM EV/S [next 12-month enterprise value to sales], down from 14 times at the end of 2025 and is now towards the mid-point of its 3-year historical range (6-16 times),” he said. “In light of negative software sentiment, we believe Shopify showing continued strong growth, along with increasing uptake of its AI offerings and products with network effects (Shop Pay, Shop App, advertising, product network) may help lift sentiment.”
TSX-listed shares of the Ottawa-based e-commerce giant fell a further 7 per cent on Wednesday despite releasing fourth-quarter results that Mr. Treiber called “fundamentally strong,” including revenue of US$3.67-billion that beat the consensus estimate by 2.2 per cent (US$3.59-billion) driven by stronger-than-anticipated gross merchandise volume and monthly recurring revenue. The negative investor response came after it disclosed it has set aside US$2-billion for a share buyback program to help lift shareholder sentiment.
However, with its guidance for the first quarter implying revenue growth will reach a four-year high, the analyst continues to see “solid underlying fundamentals” for Shopify.
“MRR growth accelerated to 15 per cent year-over-year from 10 per cent Q3,” he said. “Cohort analysis shows a higher quality mix of newer merchants. Europe GMV rose 35 per cent year-over-year constant currency, faster than total GMV (31 per cent). Offline GMV was largely steady (29 per cent vs. 31 per cent Q3), while B2B is seeing robust, albeit marginally slower growth (84 per cent vs. 98 per cent Q3). GPV [gross payment volume] rose 39 per cent year-over-year, accelerating on a double-stacked basis (73 per cent vs. 71 per cent Q3). Take rate of 2.34 per cent exceeded consensus at 2.31 per cent.
“AI innovations, but few specific AI data points. Shopify is seeing internal AI benefits (e.g. headcount down 6 per cent year-over-year vs. revenue up 31 per cent) and is fusing AI throughout its products. Shopify is monetizing AI indirectly and sees AI economics similar to other channels. We believe Shopify’s AI innovations will help sustain share gains. However, the lack of more specific data points regarding Shopify’s AI traction failed to dispel AI disruption fears.”
Maintaining his “outperform” rating for Shopify shares, Mr. Treiber cut his target to US$170 from US$200, citing reduced peer valuations. The average target on the Street is US$173.42, according to LSEG data.
Elsewhere, TD Cowen analyst John Shao upgraded Shopify to a “buy” recommendation from “hold” previously, believing its recent valuation pullback “no longer holds” and declaring “the wait is over.” He kept a US$159 target.
“The combination of a strong quarter, continued growth momentum despite seasonality, and the negative 10-per-cent intraday performance (down 30 per cent year-to-date) represents an attractive entry point for investors to own the de facto modern-day eCommerce infrastructure with durable, high growth. As such, we have taken an opportunistic move to upgrade Shopify.”
“The path towards future valuation re-ratings. In our view, a future valuation re-rating will occur as the broader software sector navigates the challenging narrative against it. For Shopify specifically, we see the continued execution (we have a high level of confidence) and good news from agentic commerce (e.g., faster merchant growth and GMV contribution) positioning SHOP towards a quick recovery.”
Meanwhile, citing its “superb” execution in recent quarters and touting AI providing a “structural tailwind” rather than a “disruption risk,” Mizuho’s Siti Panigrahi upgraded Shopify to “outperform” from “neutral” with a US$150 target (unchanged).
Analysts making target revisions include:
* Citizens’ Andrew Boone to US$160 from US$200 with a “market outperform” rating.
“The debate this quarter was agentic commerce and its impact to Shopify’s competitive position,” said Mr. Boone. “Shopify reinforced that it continues to control the back end of the transaction, and while the front end may shift to OpenAI, Google (GOOGL, MO, $385 PT), or others, its breadth of tools and controls and AI automations make it a must-have partner for merchants. To be clear, OpenAI or Google could build their own payment rails as the monetization of AI-search is still undecided, but we view this as unlikely and note that Meta (META, MO, $900 PT) when it debuted Facebook and Instagram Shops utilized Shopify for its payment rails. Despite this uncertainty, AI still appears to be a tailwind for Shopify as it further democratizes entrepreneurship while we view Shopify as a leading enabler of AI given its agentic checkout development with UCP and AI tools including Sidekick (AI business assistant), Sidekick Pulse (makes demand generation suggestions), and SimGym (simulated consumer testing). Putting this together, we believe share gains are sustainable as Shopify is a true compounding business in our mind, and we reiterate our Market Outperform rating but reduce our price target to $160 from $200 as valuations across comparable companies and our coverage universe have come in.”
* BMO’s Thanos Moschopoulos to US$160 from US$150 with an “outperform” rating.
“We remain Outperform on SHOP following solid Q4/25 results and Q1/26 guidance, which demonstrate sustained 30-per-cent growth as SHOP continues to take share. We believe agentic commerce may prove to be a market share tailwind for SHOP and that concerns on AI disruption risk are misplaced. We view valuation as attractive given SHOP’s strong execution and competitive position. We raise our revenue forecasts and trim our FCF forecasts, while our FY2026E EBITDA remains roughly unchanged,” he said.
* Barclays’ Trevor Young to US$130 from US$140 with an “equal-weight” rating.
“GMV continues to accelerate on y/2y and guide implies revs to remain in 30-per-cent-plus territory for at least another quarter. 8pt GMV comp in 2Q (4pts ex-FX) heeds some caution, particularly for a high-multiple name. Raising estimates, trimming target multiples,” said Mr. Young.
* Wells Fargo’s Ken Gawrelski to US$191 from US$198 with a “buy” rating.
“Some tax-related FCF margin headwinds in 1Q/2026, but see as transitory as SHOP executes against future Agentic commerce opportunities. Raise GMV & FCF estimates in ’27/’28. See stock weakness as opportunity as SHOP has much more AI opportunity than risk,” he said.
* Wedbush’s Scott Devitt to US$160 from US$185 with an “outperform” rating.
“Guidance and management commentary suggest gross margin deleverage this year, however, we expect the gap between revenue and gross profit dollar growth will narrow as the company laps near-term pressures, and as newer, higher-margin merchant services become more accretive to the business. Importantly, Shopify has attributed softer gross profit margin in the near-term to several factors, including the ongoing mix shift in favor of merchant solutions revenues and changes to the company’s paid trial period, which will negatively impact subscription revenue growth and gross margin through 1H26. While our near-term estimates move higher, we are discounting our longer-term forecast to reflect emerging AI risks on the sector,” he said.
* Stifel’s J. Parker Lane to US$115 from US$175 with a “hold” rating.
* Canaccord Genuity’s to US$165 from US$185 with a “buy” rating.
* Truist’s Terry Tillman to US$110 from US$155 with a “hold” rating.
Stifel analyst Martin Landry thinks the management team from Alimentation Couche-Tard Inc. (ATD-T) launched its new growth strategy on Wednesday with “a clear and concise message and delivered it exhibiting confidence.”
“Couche-Tard has a formidable scale, and it is clear this scale advantage can translate in share gains in this fragmented market which is still made up of a majority of single store operators,” he said in a client report titled ATD aims to be the world’s favorite stop for people on the go. ”We believe that all the pieces of the puzzle are in place for management to execute and deliver on its plan.“
Shares of the Laval, Que.-based convenience store giant rose 3.1 per cent after it outlined a new blueprint called “Core plus more” to boost revenue and profit over the next five years that includes a new growth algorithm which calls for a 10-per-cent annual EPS growth.
“This growth rate is in-line with our expectations and does not include contribution from M&A,” said Mr. Landry. “This business strategy update is timely as the U.S. operations are gaining momentum currently and this was displayed with management exhibiting confidence in its outlook. Earnings drivers include: (1) organic growth of the network (2) a growing contribution from white nicotine, a lucrative category, (2) success with the company’s fresh food program, (3) growth in gasoline margins in-line with CPI growth, (4) SG&A growth below inflation, and (5) share buybacks. The updated plan was well received by investors with share up 3 per cent on the day. Management now needs to execute on its new vision to be the world’s favorite stop for people on the go.”
Mr. Landry applauded several items stemming from the announcement, including an “easy to understand” growth algorithm consisting of just six key metrics, which he called “the right approach and makes it easy for investors to understand and monitor progress,” as well as “realistic and sufficient targets.”
“Couche-Tard guides for EPS growth rate of more than 10 per cent from FY27 to FY30,” he said. “This is an acceleration from the disappointing mid-single digits EPS CAGR [compound annual growth rate] of the last five years. In our view, given the company’s large size, growing EPS at 10 per cent or more on a consistent basis will satisfy shareholders and contribute to the company maintaining its current valuation multiple. Further, a 10-per-cent-plus growth rate is in-line with other convenience store peers and Canadian grocers.”
“Clear building blocks to drive same-store-sales growth. The company outlined 3 key pillars to achieve its targeted growth of 2-3 per cent annually in merchandise same-store sales. They include nicotine, fresh food (expected to grow at 4 times the pace of merchandise) and beverages.”
After introducing his fiscal 2028 forecast, which calls for EBITDA to increase by 5.3 per cent year-over-year and to reach $7.0-billion, Mr. Landry raised his target for Couche-Tard shares to $95 from $88, keeping a “buy” rating. The average target on the Street is $85.14.
“ATD’s shares trade at approximately 17 times forward earnings, roughly in-line with the 10-year average, while Canadian peers, such as grocers and dollar stores trade at a premium to their historical averages,” he said. “ATD has a better balance sheet than historically with a leverage of 2 times debt/EBITDA, which provides flexibility to make further M&A transactions or return capital to shareholders.”
Elsewhere, others making target revisions include:
* Desjardins Securities’ Chris Li to $92 from $85 with a “buy” rating.
“We believe ATD’s long-term growth targets are credible and achievable, backed by a focus on core category drivers and supported by targeted growth investments. ATD’s strong FCF and balance sheet provide optionality with capital return and M&A. We believe the strong share price performance (10 per cent year-to-date vs 5 per cent S&P/TSX) and above-average valuation (19 time forward P/E vs 17 times average) largely reflect the attractive growth potential. For long-term investors, solid execution should drive compelling shareholder returns,” said Mr. Li.
* National Bank analyst Vishal Shreedhar to $88 from $86 with an “outperform” rating.
“The key for ATD is to deliver sustained growth via organic drivers, share repurchases, and acquisitions,” said Mr. Shreedhar. “We believe that the company is on firmer footing to deliver growth as the c-store backdrop is more stable, and growth/efficiency initiatives are in place, and largely showing results.”
* RBC’s Irene Nattel to $100 from $91 with an “outperform” rating.
“ATD management presented a financial framework for F26-F30 that our analysis indicates should be attainable, and addressed key areas of investor concern. Although high level KPI’s point to earnings growth within the range of investor expectations, color provided around key elements to profitably drive the business forward should increase investor conviction that forecasts are achievable. Decidedly improved trading tone pre- event should be sustained, and we reiterate our view of ATD as a best idea for 2026,” said Mr. Nattel.
* CIBC Capital Markets’ Mark Petrie to $92 from $88 with an Outperformer rating.
“We believe the strategy is credible, centred on organic growth, and largely an extension of existing plans with increased focus on nicotine, new stores (NTIs), and leveraging technology investments,” said Mr. Petrie.
“We are further encouraged by the confident tone around the short-term momentum in US merchandise same-store sales (SSS) growth, and edge up our FQ3 forecast further,” the analyst said.
* TD Cowen’s Michael Van Aelst to $100 from $90 with a “buy” rating.
“Growth targets are not predicated on a consumer health recovery — sounds like Q3 US SSSG has continued to build on H1 momentum, led by fresh food and beverage," said Mr. Van Aelst.
* BMO’s Étienne Ricard to $84 from $79 with a “market perform” rating.
“Beyond resetting expectations, the presentations provided for a slight acceleration to organic growth from recent trends (in line with consensus expectations; ‘momentum has continued in this latest quarter’) that is contingent on continued execution within food, nicotine, and thirst,” he said.
National Bank Financial analyst Maxim Sytchev believes the management team of Finning International Inc. (FTT-T) is “the strongest in decades” with the Vancouver-based heavy equipment dealer poised to benefit from a “highly constructive” backdrop across multiple geographies and its original equipment manufacturer Caterpillar Inc. (CAT-N) now trading at the highest multiples since 2007.
“We do, however, need to account for the inherent volatility of inputs – i.e., oil and copper pricing that in our experience is more challenging to grasp on a consistent basis; preserving a margin of error as a result is a critical component of investing in a cyclical industry,” he added.
After the bell on Tuesday, Finning reported fourth-quarter 2025 revenue of $2.69-billion, narrowly above both Mr. Sytchev’s $2.64-billion estimate and the consensus of $2.62-billion. Adjusted headline EBITDA of $303-million and adjusted earnings per share of $303-million and $1 fell short of expectations (the analyst’s $332-million and $1.09 and the Street’s $319-million and $1.06) due largely to a $21-million long-term incentive plan expense.
Despite the mixed results, Mr. Sytchev emphasized the company’s “strong execution” and “encouraging commentary” on the trajectory of its Product Support segment.
“Operationally, Finning is now a much leaner and efficient entity,” he said. “Management’s focus on cost control and capital velocity has paid off, with SG&A as a percentage of sales inching down by another 10 basis points year-over-year (and an impressive 80 basis points year-over-year for the full year) and capital turnover accelerating to 2.34 times (reaching the targeted 2.3 times to 2.5 times range) from 2.16 times last year. As a result, adjusted ROIC [return on invested capital] has returned to above 19 per cent despite the normalization of new equipment pricing vs. two to three years ago. Going forward, the leaner cost base should also amplify the impact of positive operating leverage in times of growth (enabled by supportive end-market demand in mining and an improved construction backdrop in Canada / LatAm), helping drive incremental margin expansion.”
“Recent machine population growth and strong booking activity suggest a long runway for Product Support. Improved post-COVID supply and incremental market share gains have helped FTT achieve steady growth in the installed machine population over the last several years in both Canada and South America, extending the long-term PS runway as equipment ages and requires more significant maintenance. The mining-driven inflection in Canada continues to impress, with LatAm following close behind – suggesting that a mid (or even high) single-digit growth rate could be sustainable over our forecast horizon.”
The analyst maintained his top-line growth forecasts for next year of mid-single-digit growth to “account for the growth in backlog (at a record level; up 20 per cent year-over-year), especially in Power Systems (35 per cent of total backlog and up 28 per cent year-over-year) as the company sees (eventual) growth in Canada due to data centre investments as well as healthy mining and construction activity in Canada/Chile (the latter will see some near-term fleet-related moderation, but long-term tape is healthy).
“There will also be a healthy cadence of Product Support to follow the growth in equipment deliveries over the past two years; hence, we model 6-per-cent CAGR [compound annual growth rate] through 2027 for PS,” he added. “Capital allocation assumptions remain unchanged as the company plans to return capital in the form of dividends and buybacks (we model 4 per cent of shares outstanding to be bought back annually). Recall CAT’s Investor Day financial targets disclosed late last year imply more than doubling Power Generation sales by 2030E and a 5-per-cent to 7-per-cent consolidated sales CAGR until then – hence our FTT estimates are in line with those figures at the midpoint.”
Reaffirming his “sector perform” rating, Mr. Sytchev hiked his target to $89 from $72. The average target on the Street is $91.50.
Elsewhere, RBC’s Sabahat Khan moved his target to $104 from $89 with an “outperform” rating.
“Underlying Q4 results were above consensus estimates, reflecting revenue growth across all regions and business lines (ex. Used Equipment). Notably, management’s outlook for construction in Canada has improved at the margin, which combined with strong PS trends, elevated commodity prices, and a record $3.1B backlog positions the company well going forward, in our view,” said Mr. Khan.
In a separate report, Mr. Sytchev said Toromont Industries Ltd. (TIH-T) “remains in the core industrial basket for investors” following its quarterly release, pointing to “another dividend increase of 8 per cent, net cash now at $529-million, and what we view as a better infra spending backdrop in Canada due to geopolitical necessity (the tone around mining and construction was quite positive).”
Shares of the Toronto-based industrial company jumped 6.6 per cent on Wednesday after it reported revenue of $1.422-billion, exceeding the analyst’s $1.376-billion estimate and the consensus forecast of $1.379-billion. Adjusted EBITDA of $305-million also came in better than anticipated ($290-million and $288-million, respectively.
Mr. Sytchev now sees AVL Manufacturing Inc., a Hamilton, Ont.-based power generation and storage enclosure company which it acquired a 60-per-cent ownership in early last year, “scaling in full force, capitalizing on unprecedented end-market growth.” He now sees “more upside ahead as AVL growth trajectory continues to impress.”
“Tone around construction and mining end markets appears cautiously optimistic,” he said. “While management’s tone is almost always reserved, the messaging around TIH’s traditional mining and construction markets seemed quite constructive. On the former front, there is solid interest in mine development on supportive commodity prices, while the latter is also supported by a potential inflection in horizontal infrastructure on the back of “nation-building” projects eventually ramping up. In turn, this should also support the high-margin rental business as clients also seek to maintain flexibility in their capital commitments.
“AVL growth extending revenue visibility, and the run-rate earnings / margin profile. AVL saw another quarter of extremely strong bookings (backlog is now 28 per cent of the overall business vs. 22 per cent last quarter) and revenue growth (25-per-cent quarter-over-quarter to $98-million), helped by the ongoing ramp-up of the Charlotte facility, expected to double production levels vs. the legacy Hamilton plant (now close to capacity) before the end of this year, with margins ramping up accordingly. Management is committed to purchasing the remaining 40% stake over the next several years, and noted that further capacity expansion in the near term would come from increasing floorspace / capacity at the Charlotte plant over a new greenfield development. Margin expansion will be moderated slightly by the start of minority dividend payments to AVL management starting next quarter, but this is a ‘first-world problem’ to have in the scheme of things. It’s also worth noting that the accelerated amortization related to the acquired backlog will normalize this year, substantially lifting headline EPS (though will be a tailwind on our adjusted EPS as we add that back – to the tune of $0.30 in Q4/25).”
Reiterating his “outperform” rating on Toromont shares, Mr. Sytchev raise his price target to a high on the Street of $208 from $176.00 to reflect a higher earnings forecast. The average is $177.67.
Elsewhere, others making revisions include:
* Raymond James’ Steve Hansen to $180 from $172 with a “market perform” rating.
“We are increasing our target price on Toromont Industries ... to reflect better-than-expected 4Q25 results underpinned by: 1) another robust AVL performance: & 2) strong Product Support growth. Despite this momentum, we reiterate our neutral rating based upon sustained concerns over: 1) lingering macro headwinds impacting E. Canada; 2) deteriorating ‘core’ EG margins; and 3) the stock’s lofty (near record) valuation. Against this backdrop, we are comfortable sticking to the sidelines,” said Mr. Hansen.
* RBC’s Sabahat Khan to $207 from $180 with an “outperform” rating.
“Toromont reported Q4 results ahead of consensus. Looking ahead, we believe the operating backdrop remains supportive (backlog remains healthy, Product Support revenue up 5 per cent year-over-year in the Equipment Group), and we continue to expect growing contribution from the acquired AVL business over the coming quarter,” said Mr. Khan.
* BMO’s Devin Dodge to $210 from $196 with an “outperform” rating.
“We believe TIH is well-positioned for cyclical tailwinds in power and mining, while potential nation-building projects would provide further upside over the long term. Execution is strong, the balance sheet provides significant capacity to opportunistically pursue M&A, and the risk to estimates appears weighted to the upside. Valuation remains the hurdle for most investors, but we believe it is at least reasonable given the earnings growth potential of the business,” said Mr. Dodge.
After shares of Computer Modelling Group Ltd. (CMG-T) dropped 18.5 per cent on Wednesday following the release of “mixed” third-quarter fiscal 2026 results, Ventum Capital Markets analyst Amr Ezzat thinks “near-term sentiment may remain cautious until the Q4 inflection is visible in the numbers.”
The Calgary-based company, which creates reservoir simulation software for the oil and gas industry, saw adjusted EBITDA fall 29.7 per cent from the same quarter a year ago but up 28.6 per cent from the second quarter.
“Revenue came in modestly below our estimate (by 1.5 per cent), with recurring revenue the primary shortfall (4.9 per cent versus our forecast),” he said. “The softer recurring performance reflects the full-quarter impact of the previously disclosed top-10 customer loss, as well as some license rationalization within Bluware. That said, EBITDA improved meaningfully on a sequential basis (up 28.6 per cent quarter-over-quarter), supporting management’s view that Q2/F26 marked the margin trough.
“More importantly, nothing in the quarter alters the expected Q4/F26 inflection. The Shell contract transition should begin flowing into A&M next quarter, mechanically lifting organic recurring revenue and margins. While Q3 does not yet reflect the turn, we believe the Q4 setup remains intact. Management reiterated that organic recurring revenue should be positive for F2027 overall, albeit with a softer first half given tougher comparables. In our view, the debate now centers less on the magnitude of the Q3 miss and more on confirmation of the Q4 recurring revenue inflection.”
Expecting its multi-year software licensing agreement with Shell, which was announced last November, to boost margins moving forward, Mr. Ezzat thinks the impact of customer losses are now fully reflected in its revenue and sees EBITDA poised to recover.
“EBITDA improved 29.6 per cent quarter-over-quarter, reflecting seasonal strength and early stabilization,” he noted. “However, on a year-over-year basis, margins remain below historical levels, underscoring that the transition year is not yet complete. Management expects Q4/F26 margins to step higher again, driven by higher recurring revenue contribution, Sharp’s seasonally stronger quarter, and CoFlow/Shell commercialization. Looking into F2027, management expects EBITDA to grow year over year, though incremental corporate investments to scale M&A capacity will temper near-term operating leverage.”
Keeping his “buy” rating for its shares, Mr. Ezzat reduced his target by $1 to $6.50 on his revised forecast. The average is $6.
Elsewhere, other changes include:
* Acumen Capital’s Nick Corcoran to $6 from $8 with a “speculative buy” rating.
“We view the sell-off [Wednesday] as overdone. While CMG is now a ‘show me’ story, we believe strong execution by Management – specifically a return to organic growth and/or accretive acquisitions – has the potential to rerate the stock higher,” he said.
* Canaccord Genuity’s Doug Taylor to $4.75 from $5.75 with a “hold” rating.
“While CMG’s December quarter results fell short of expectations, the company maintained the narrative that year-over-year comps will flip positive on an organic year-over-year basis in the March quarter and for F2027. This is a function of easier comps as much as it is about an improvement in the absolute growth fundamentals. Given what is a challenging backdrop for software valuations, we believe definitive evidence of this pivot is important to see to signal a better entry point, given what is a discounted valuation,” said Mr. Taylor.
In response to the “SaaS-apocalypse sell-off,” Stifel analyst Suthan Sukumar is “reshuffling the deck” on stocks in his coverage universe, downgrading a group of stocks after analyzing the impact of the artificial intelligence “disruption” on the enterprise software industry.
“Software is facing an unprecedented sell-off - with the S&P/TSX IT Index and IGV down 22.0 per cent year-to-date, vs. up 2 per cent for the S&P 500 – as investors price in a doomsday scenario on escalating AI disruption fears,“ he said. “Based on conversations with executives, early-stage founders, and PE/VC investors, we believe these fears are overblown but see opportunity for more selective positioning for the ensuing AI revolution. As such, we downgrade DTOL, SYZ, TCS, TRBE, and NOW—names we see as show-me, AI laggard stories - while reiterating top picks GIB.A and KXS - catalyst rich, blue-chip stories tied to strong secular themes with the potential to show durable growth rates with meaningful AI monetization.
“We come away with some comfort that early-stage disruption to enterprise software is overstated and this cycle with AI likely mirrors prior tech shifts like mobile and cloud, acting as more of a TAM expander for agile incumbents vs. an extinction event. OpenAI’s recent SI partnerships and new Frontier enterprise platform help to reaffirm this with a new partner vs. disrupt narrative with incumbent System of Record platforms.”
Mr. Sukumar downgraded these companies to “hold” from “buy” ratings previously:
* D2L Inc. (DTOL-T) with a $12.75 target, down from $19. The average target is $18.79.
* Sylogist Ltd. (SYZ-T) with a $4.75 target, down from $9. Average: $7.38.
* Tecsys Inc. (TCS-T) with a $28.50 target, down from $48. Average: $38.50.
“We are moving to the sidelines on D2L, Tecsys and Sylogist, as these names have transitioned into ‘show-me’ stories characterized by decelerating momentum and a lack of clear AI catalysts,“ he explained. “While each has established defensible niche leadership, from D2L’s LMS innovation to Tecsys’s healthcare supply chain dominance and Sylogist’s public sector ERP, their nearterm trajectories reflect softening ARR growth and structural headwinds in core US end-markets. Execution risks remain a concern, highlighted by recent segment churn, Sylogist’s abrupt CEO departure and accounting-driven guidance volatility. Most critically, these companies lack a robust AI roadmap or immediate monetization tailwinds. In a market increasingly bifurcated by AI capability, these firms appear as laggards whose “wait-and-see” approach risks further valuation compression relative to blue-chip peers already successfully capturing generative AI demand. Without a re-acceleration in organic growth or a meaningful pivot toward an agentic AI strategy, we believe the risk-reward remains balanced and choose to wait for greater visibility before re-engaging.”
Mr. Sukumar lowered these companies to “sell” from “hold” recommendations:
* NowVertical Group Inc. (NOW-X) with a 25-cent target, down from 50 cents. Average: 40 cents.
* Tribe Property Technologies Inc. (TRBE-X) with a 25-cent target, down from 75 cents. Average: 75 cents.
“Our downgrades to Sell ratings on Tribe and NowVertical are primarily driven by liquidity concerns that leave little margin for execution error in an increasingly volatile macro environment,” he said. “Tribe has successfully improved operational efficiency following a heavy period of M&A, yet it remains caught in a “perfect storm” of construction headwinds and liquidity constraints, with net debt to EBITDA more than 3 times and covenant breaches making 2026 a high-stakes ‘show-me’ year. Similarly, NowVertical has seen management’s earlier $50-million revenue and $10-million EBITDA targets get pushed out as it grapples with unexpected revenue volatility and constrained forward visibility amidst a broader industry-wide pullback in discretionary IT spending and a trend toward vendor consolidation - key themes we’ve seen with larger global IT peers. As sub-scale players, both companies need to navigate company-specific challenges, such as the difficult condo backdrop for Tribe and slipped reseller deals/enterprise sales cycles for NowVertical, while early-stage AI initiatives offer insufficient near-term optionality to offset downside risks. Ultimately, with M&A sidelined and capital structures strained, we see little by way of nearterm catalysts, and until these firms demonstrate a clear path to accelerated deleveraging and consistent cash flow generation, the riskreward profile remains unfavorably skewed, in our view.”
The analyst’s top picks are now:
* Kinaxis Inc. (KXS-T) with a “buy” rating and $245 target (unchanged). Average: $212.
* CGI Inc. (GIB.A-T) with a “buy” rating and $160 target (unchanged). Average: $173.93.
“KXS – supply chain transformation remains a major strategic investment area given all the recent tariff/trade related destruction to global supply chains to-date. KXS is a mission-critical platform for the Fortune 500, multi-national customers they serve and, given their extensive proprietary supply chain data, significant domain expertise and deep integration into corporate workflows (from C-level to working level), we see them better positioned than many enterprise software players to introduce and monetize AI and agentic strategies given a highly captive and sticky install base that is starved for AI; GIB.A - an IT services play that is strategically positioned to support the end-to-end enterprise AI journey from initial prep to optimizing for ROI, and the most defensive name in our Canadian tech coverage. While there is AI-related pricing risk/concerns, to-date we’ve only seen AI being accretive to pricing and serving as a macro-resilient demand tailwind given the significant yet growing pipeline of enterprise AI readiness work (data prep, platform integration, security/governance) that is still in the 1st inning," he said.
Canaccord Genuity’s Canadian bank equity analyst Matthew Lee thinks “a favourable CET-up helps justify premium valuations” ahead of the start of the sector’s firrs-quarter earnings season later this month.
“We believe that the group enters this year from a position of strength with record capital levels, strong fee-based revenue streams, and recovering investment spending supporting high single-digit earnings growth. While NII will likely remain muted for the first half of the year on sluggish loan volumes, we forecast an acceleration in the second half providing support for double-digit earnings growth in F27. Given that Q1 earnings season comes just 80 days after Q4, we expect the group’s rhetoric (and guidance) to remain largely unchanged but will certainly keep a keen eye on management’s confidence in top-line growth and consumer credit. Overall, our current forecast contemplates industry-level organic EPS growth of 9.6 per cent for the year driven by mid-single-digit PTPP growth and share repurchases
Ahead of the quarter results, he raised his group target multiple (12.8 times to 13.5 times) to reflect his “constructive view on the space,” leading to higher targets across the board.
“At an industry level, we forecast F26 EPS growth of 9.6 per cent year-over-year, with ROE improving by 41 basis points year-over-year to 14.2 per cent,” said Mr. Lee. “With CET1 ratios sitting well above targets, we expect excess capital to continue flowing to buybacks, enhancing EPS durability and supporting higher sustainable multiples.”
His targets are now:
- Bank of Montreal (BMO-T, “buy”) to $218 from $201. The average is $190.63.
- Bank of Nova Scotia (BNS-T, “buy”) to $112 from $106. Average: $102.34.
- Canadian Imperial Bank of Commerce (CM-T, “hold”) to $136 from $129. Average: $131.10.
- National Bank of Canada (NA-T, “hold”) to $180 from $170. Average: $172.69.
- Royal Bank of Canada (RY-T, “buy”) to $255 from $242. Average: $236.82
- Toronto-Dominion Bank (TD-T, “buy”) to $141 from $131. Average: $128.82.
In other analyst actions:
* Seeing its surprise $500-million share sale, which led to a 27.8-per-cent drop in its unit price on Wednesday, as “a culmination of poor choices and tough market” and calling the result “at best a tenuous renaissance,” National Bank Financial analyst Matt Kornack dropped his Allied Properties REIT (AP.UN-T) target to $11 from $13.75 with a “sector perform” rating. The average is $14.25.
“There wasn’t much to like operationally or strategically with Q4 results, new guidance and the concurrent $500 mln equity offering. The latter, which we imagine was designed to stave off a credit downgrade, is heavily dilutive to earnings and NAV. It is also worth highlighting that leverage remains high and doesn’t reach industry norms until 2028, which includes assumptions on normalizing occupancy. Needless to say execution risk remains. Elsewhere, there were also concerning signs in the form of an expected credit loss in the loans receivable portfolio to the tune of $128-million, effectively wiping out 3 yrs of earnings contribution,” said Mr. Kornack.
* BMO’s Tim Casey trimmed his Cineplex Inc. (CGX-T) target by $1 to $12 with a “market perform” rating, while Canaccord Genuity’s Aravinda Galappatthige cut his target to $9 from $11.50 with a “hold” rating. The average is $11.
“Q4 revenues and EBITDAaL beat slightly, while EPS missed,” said Mr. Casey. “Q1 box office has had a sluggish start but faces weak year-over-year comps. Momentum should pick up in Q2 to Q4. Maintenance capex and debt reduction remains the key capital priorities. The $50-million capex guide reflects one Playdium expansion in Q2, while further expansions remain on hold. We expect box office to improve year-over-year with a moderate increase in film supply, but studio consolidation could impact longer-term supply.”
* Desjardins Securities’ Lorne Kalmar bumped his Crombie REIT (CRR.UN-T) target to $18 from $17 with a “buy” rating. Other changes include: BMO’s Michael Markidis to $16.50 from $16 with an “outperform” rating, Canaccord Genuity’s Mark Rothschild to $16 from $15.50 with a “hold” rating and Raymond James’ Brad Sturges to $17.75 from $17.50 with an “outperform” rating. The average is $16.25.
“Throughout 2025, the REIT dutifully executed on both the operational and capital allocation fronts (Express Pulse). We forecast CRR to deliver FFOPU growth in line with its sponsored peers through 2027 at 3 per cent, while offering a similar leverage profile and benefits from the relationship with its sponsor. However, CRR trades at a 13-per-cent discount to NAV vs peers at a 1-per-cent premium. We view this gap as unjustified and believe the stock is poised for a re-rate,” Mr. Kalmar said.
* Mr. Kalmar also increased his target for First Capital REIT (FCR.UN-T) to $23, above the $22.63 average, from $22 with a “buy” rating.
“FCR capped off 2025 with another strong quarter. SPNOI growth is poised to moderate in 2026 as it laps a difficult 2025, though we expect growth to accelerate in 2027. We forecast ND/EBITDA to decline to sub-8-times by 4Q27 (excluding the impact of condo profits). While the stock has performed well, it continues to trade at a discount to its LTA FFO multiple, which we view as unjustified considering the current operating environment and improved leverage profile,” said Mr. Kalmar.
* TD Cowen’s Craig Hutchison moved his First Quantum Minerals Ltd. (FM-T) target to $42 from $41 with a “hold” rating, while Canaccord Genuity’s Dalton Baretto lowered his target to $47 from $48 with a “buy” rating. The average is $42.33.
“Q4 results were a bit lighter than expected, but with production and guidance pre-released, there were no major surprises in the quarter. The company took further steps post quarter to bolster its balance sheet as it awaits sanction of Cobre stockpile reprocessing. We remain HOLD, but do flag significant share price upside remains if the company can a secure a reasonable deal on a Cobre restart,” said Mr. Hutchison.
* Seeing 2026 “shaping up well,” RBC’s Sabahat Khan raised his GFL Environmental Inc. (GFL-N, GFL-T) target to US$60 from US$59 with an “outperform” rating, while Barclays’ William Grippin moved his target to US$63 from US$62 with an “overweight” rating.. The average is US$57.26.
“GFL reported a good Q4 with revenue and Adjusted EBITDA coming in above consensus. 2026 headline guidance was modestly below consensus, driven by unfavorable YoY F/X (modestly ahead on a constant-currency basis). Looking ahead, the company remains well-positioned for good top-line growth (algorithm remains intact with mid-5-per-cent pricing, modest volume growth), margin expansion (biggest opportunity among peers, guiding to 60 basis points year-over-year), and M&A (management commentary points to an above-average year in 2026).”
* In response to “good” fourth-quarter 2025 results, National Bank’s Gabriel Dechaine bumped his Manulife Financial Corp. (MFC-T) target to $57 from $56 with an “outperform” rating, while TD Cowen’s Mario Mendonca lowered his target to $59 from $60 with a “buy” rating. The average is $56.61.
“Results were mixed, with key growth segments (Asia and WM) delivering good growth and accounting for two-thirds of core earnings. Asia delivered good new business CSM, WM EBITDA margins improved 60 basis points year-over-year, and MFC continued to buy back stock, key drivers the 18-per-cent ROE target. New business trends were softer in Asia (largely expected), but surprisingly weak in WM. Earnings quality was also softer,” said Mr. Mendonca.
* TD Cowen’s Aaron MacNeil raised his Precision Drilling Corp. (PD-T) target to $123, exceeding the $120.48 average, from $118 with a “hold” rating, while BMO’s John Gibson hiked his target to $150 from $120 with an “outperform” rating.
“Precision’s 2026 strategic priorities highlights its balanced approach to upgrades ($63-million), buybacks (our estimate: $90-million) and total debt reduction ($100-million). Broadly speaking, we do not see the recent sector rally as fundamentally driven and view associated multiple expansion as a risk,” said Mr. MacNeil.
* Expecting “challenging operating conditions [to] persist in 2026,” National Bank’s Shane Nagle reduced his Sherritt International Corp. (S-T) target to 30 cents from 35 cents with a “sector perform” rating. The average is 20 cents.
“We maintain our Sector Perform rating, accounting for improving operational outlook at the Moa JV expansion and positive nickel/cobalt price environment, offset by what have been difficult operating conditions in Cuba and near-term liquidity needs. Our target has come down slightly after incorporating 2026 guidance and additional equity issuance,” said Mr. Nagle.
* Desjardins Securities’ Jerome Dubreuil raised his Stingray Group Inc. (RAY.A-T) target to $21.50 from $18.50 with a “buy” rating. Other changes include: BMO’s Tim Casey to $21 from $19 with an “outperform” rating, Canaccord Genuity’s Aravinda Galappatthige to $20.50 from $18.50 with a “buy” rating and RBC’s Drew McReynolds to $20 from $18 with an “outperform” rating. The average is $19.17.
“Beyond the broader negative market sentiment toward tech stocks, we view [Wednesday’s 4-per-cent pullback as unjustified, given our expectation for a consensus uplift, the constructive tone of the conference call, stronger-than-anticipated synergy realizations to date and deleveraging. ... Even without multiple expansion, we derive an expected total return CAGR north of 20 per cent,” said Mr. Dubreuil.
* TD Cowen’s Mario Mendonca reduced his Sun Life Financial Inc. (SLF-T) target to $102 from $104 with a “buy” rating. The average is $89.03.
“SLF beat our estimate on stronger U.S. and WM results. In the U.S., experience losses dropped to US$17-million from $72-million last quarter and were better than expected as medical stop loss experience improved. Surprisingly, sales also accelerated in this segment. Pricing actions and reserving point to better US results in 2026. While MFS margins remain strong, outflows accelerated. Capital remains an SLF strength,” said Mr. Mendonca.
* National Bank’s Nathan Po cut his TerraVest Industries Inc. (TVK-T) target to $175 from $185 with an “outperform” rating. Other changes include: Canaccord Genuity’s Yuri Lynk to $195 from $209 with a “buy” rating and Desjardins Securities’ Gary Ho to $170 from $175. The average is $197.83.
“TVK reported a 1Q miss, driven entirely by the Compressed Gas (CG) segment, with Entrans continuing to face soft industry fundamentals. We have baked in the accretive KBK acquisition, which stands to gain from the fiberglass tank replacement cycle, which offsets declines in our Entrans forecasts. Momentum from robust datacentre expansion bodes well for the Highland Tank and Kalyn Siebert lines of business,” said Mr. Ho.
* Raymond James’ Daryl Swetlishoff raised his West Fraser Timber Co. Ltd. (WFG-N, WFG-T) target to US$85 from US$75, exceeding the US$74.82 average, with an “outperform” rating.
“Despite historically acute margin pressure, West Fraser’s Wednesday after-market print came in better than expected, with adjusted EBITDA of negative $79-million (vs. consensus negative $105-million; RJL: negative $98-million),” said Mr. Swetlishoff. “Both core product groups (lumber + OSB) posted margins consistent with our prior Weyerhaeuser read-through note, but we emphasize that fundamentals have shifted materially since quarter-end, positioning the bulk of our coverage list for positive FCF inflection in 1Q26.”