Inside the Market’s roundup of some of today’s key analyst actions
While cautioning the outlook for Ag Growth International Inc. (AFN-T) remains “mixed,” ATB Capital Markets analyst Tim Monachello thinks the Winnipeg-based agricultural machinery company is “making strides to shore up” its balance sheet.
“AFN is setting up a fund to monetize longterm financing-related receivables associated with Brazilian Commercial projects,” he said. “This structure will provide optionality to support AFN’s balance sheet over the coming quarters. Given this structure and other avenues for receivables monetization, we now forecast AFN’s net leverage (excl. leases) to decrease to 3.1 times by year-end 2025 (3.3 times previously).”
In a research report released before the bell, Mr. Monachello said Ag Growth’s outlook remains largely unchanged, including uncertainty for North American Farm demand through at least the remainder of 2025. However, he said that turbulence is offset by “continued strength” in its international Commercial business that “supports strong visibility in 2025 and into 2026.”
“We are encouraged by the continued strength of AFN’s Commercial outlook and the levers that AFN is pulling to support FCF and its balance sheet through the ongoing NAM farm downturn,“ he said.
“Still, we believe meaningful upside in AFN shares requires more tangible evidence of an improving outlook for NAM farm demand especially given AFN shares are up 23 per cent since Q1/25 results and its balance sheet remains highly leveraged (3.7 times net leverage excluding leases at Q1/25). Further, we believe downside risk exists to AFN’s Farm margins given challenging NAM farm dynamics, elevated steel prices, potential tariff headwinds alongside increased steel tariffs, and pricing incentives that may be required to support demand through the cycle.”
Maintaining his “sector perform” rating for Ag Growth shares, Mr. Monachello bumped his one-year target to $47 from $43. The average target on the Street is $48.75, according to LSEG data.
“Our 7.7 timesEV/adj. EBITDAS multiple is toward the bottom end of AFN’s long-term historical trading range, but in-line with its trading range since 2022,” he said. “We believe multiple expansion over the medium-to-long-term is largely dependent on improved FCF conversion.”
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National Bank Financial analyst Michael Doumet was bullish on the potential gains stemming from Secure Waste Infrastructure Corp.‘s (SES-T) recently acquired metal recycling facility and a waste processing facility, near Edmonton following a facility tour, believing it “exhibited the infrastructure-type quality of the assets.”
“The location, capital-intensity and existing market share make the facilities (and network) near impossible to replicate,” he said. “More broadly, we believe SES is content to continue to play (and grow) within its sandbox (i.e. infrastructure-type assets in Western Canada), where the business generates strong returns and where management continues to see a decent runway for growth.”
In a client note released Thursday, Mr. Doumet said Secure sits in a “structurally better” position following its acquisition of Tervita (in 2021) and the divestiture of non-core oilfield service business units (in 2022 and 2023), however he emphasizes it is “not yet at its final destination.”
“Its pricing power is firmer and its sources of revenue more stable,” he added. “Today, much of the investor debate is on what SES’s ‘intrinsic’ valuation/multiple should be - which ties back to the market’s view of the ‘degree’ Secure is an ‘oil field service’, ‘infrastructure-type’, or ‘waste’ company. Our take is simple: SES’s valuation re-rate should progress as it establishes/executes its growth algorithm. While we see risk to the 2025 guide ... we view SES as a 12-15-per-cent EBITDA/share compounder warranting a higher valuation (vs. current trading multiple of 7.8 times EV/EBITDA on our 2026 estimates; approximately 9-per-cent FCF yield).
“Guidance update a clearing event? We think so. We see risk that SES either (i) hits the low-end of its 2025 EBITDA guide or (ii) may need to trim it. Given management expressed a ‘cautious stance’ in regard to its 2025 guide, while also indicating the guidance range of $510 million to $545 million had ‘sufficient flexibility to accommodate these conditions’, we think it is generally well understood that EBITDA will likely land at the low-end (or just below the low-end) of the range. At this stage, we perceive the incremental risk to the guide as primarily coming from its metal recycling facilities (due to tariffs) and wildfires (which should mean-revert in 2026). With that in mind, we believe a ‘trim’ to the 2025 guide may act as a clearing event as higher WTI and incremental contributions from its organic capex program support an uplift in 2026E EBITDA growth.”
Noting his bullish view on the Calgary-based company is “based on the view that despite the risk to 2025 EBITDA (which should be largely understood), a steady cadence in profit growth into 2026 is supportive of a continued buyback program, which, in turn, will act as a multiplier for when SES share re-rate more fully,” Mr. Doumet raised his target for Secure shares to $17.50 from $17 to reflect a higher valuation multiple while maintaining an “outperform” rating. The average on the Street is $17.30.
Elsewhere, RBC’s Arthur Nagorny kept a “sector perform” rating and $15 target.
“We attended a site tour on Tuesday of SECURE’s new Metals Recycling facility in Edmonton, as well as the company’s Drayton Valley Waste Processing facility. Overall, we came away with a greater appreciation of the synergy potential between the Edmonton facility and the remainder of SECURE’s Recycling network. With that said, we expect the recent tariff-related developments across the business to have a modest impact on Q2 results and revise our estimates to reflect this,” said Mr. Nagorny.
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National Bank Financial analyst Baltej Sidhu thinks investors should view the "sound strategy and strong targets" delivered by Boralex Inc. (BLX-T) at its investor day ”positively" given “its consistent execution history.”
On Tuesday, the Montreal-based renewable power company unveiled a plan to invest as much as $6.8-billion to more than double its production output despite uncertainty south of the border. It’s aiming to boost its installed capacity from 3.2 gigawatts currently to approximately 7 gigawatts by 2030 driven by solar and wind power.
Mr. Sidhu sees its 2030 strategic plan as “ambitious” and emphasized its focus on organic growth.
“On financial metrics, BLX targets a CAGR [compound annual growth rate] for its operating income at 12-14 per cent, consolidated EBITDA between 7-9 per cent, and combined EBITDA between 8-10 per cent over the 2025-2030 period,” he explained in a client note titled From Megawatts to Value Creation. “Boralex also notably introduced per share based target metrics with its Investor Day which include discretionary cash flow per share, which targets an 8-10-per-cent CAGR over the next five years, with the same objective for cash flow from operations per share. We believe these new per-share metrics should enhance transparency and better align with shareholder value creation. Again, no M&A is embedded in these target ranges and therefore any M&A over the next five years would present upside. BLX increased the average target return on investment (levered IRRs) from its last Investor Day in 2021 to 10-12 per cent (was 8-10 per cent). However, we would note this 10-12-per-cent minimum IRR threshold represents a base case for its project returns, as these targets do not incorporate the potential for recontracting, refinancing, or asset-recycling, which would skew the returns higher.
“Just as important, BLX is targeting an improvement in revenue visibility, with the weighted average PPA duration expected to rise from 11 years (2024) to 14 years by 2030. This increase is underpinned by the longer contract lengths being secured today — new PPAs average 22 years, with terms ranging from 15 to 30 years. This evolution supports BLX’s ability to lock in long-term, stable cash flows, which in turn strengthens the company’s ability to secure competitive project-level financing. In our view, this enhanced contract profile is a key enabler of the $6.8-billion investment plan and could potentially help lower the overall cost of capital and risk profile of the business over time."
The analyst touted further opportunities for growth domestically, expecting Boralex to bid in upcoming RFPs in Ontario (LT2) and Quebec (Hydro-Quebec), “leveraging its expertise and strong relationships with First Nations and local municipalities.” He also sees potential gains in France, the United Kingdom and United States with a focus on “organic development, complemented by M&A.”
Accordingly, citing “increased confidence and visibility in its growth pipeline,” Mr. Sidhu raised his target for Boralex shares by $1 to $43, reaffirming an “outperform” rating. The average is currently $38.95.
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U.S. building products giant QXO Inc.’s (QXO-N) US$5-billion all-cash offer for peer GMS Inc. (GMS-N) underscores the “significant” value in shares of Langley, B.C-based Adentra Inc. (ADEN-T), according to Scotia Capital analyst Jonathan Goldman.
“ADEN shares trade at 6.7 times EV/EBITDA on our Street low 2026 estimate compared to historicals of 7 times,” he said. “Moreover, our 2026 estimate is 35 per cent below prior peak and historical valuation does not account for a structurally higher margin profile supported by mix shift to specialty products.
“We still like ADEN, especially with shares trading near 52-week lows, but with a depressed housing market, downside risk to consensus estimates, and elevated leverage (3.2 times excluding leases as at 1Q25), shares are more suited to investors with a longer-term horizon. That said, strategic value in the platform is higher than the current share price, in our view.”
Mr. Goldman reiterated a “sector outperform” rating and Street-low $31 target for Adentra shares. The current average is $38.89.
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Desjardins Securities analyst Bryce Adams viewed Lundin Mining Corp.’s (LUN-T) capital markets day “positively” and sees its “long-term copper growth thesis intact.”
“We continue to like Lundin for its solid operating base and long-term growth potential,” he said. “Lundin highlighted growth from brownfield options that could increase annual production to 350kt [thousand tons] from roughly 320kt (100-per-cent basis) over the next 3–5 years, as well as long-term more than 500kt annual production including attributable production from Vicuña. Considering the five-year guidance provided and expected cash from operations and free cash flow, Lundin expects to have future funding capacity of US$6.2-billion to fund its share of Vicuña Phase 1 capex. We model Phase 1 capex of US$7.1-billion, and Lundin expects to update the market on this in 1Q26.”
Raising his 2025 earnings expectations modestly, Mr. Adams called Lundin’s full potential programs (FPP) “impressive.”
“At Candelaria, FPP efforts have reduced unit mining costs, and strip ratios are notably down to 1:1 from 3:1,” he said. “These factors have helped reduce annual sustaining capex to around US$200-million from close to US$400-million two years ago. At Caserones, FPP is ongoing, but so far milling rates have increased 15 per cent to 4,300tph [tons per hour], mining rates have increased 21 per cent to 220ktpd and operating costs are 10 per cent lower to US$18/t. At Chapada, FPP efforts have lowered strip ratios and reduced annual mine movement by 30mtpa to 50mtpa, resulting in lower mining costs and AISC [all-in sustaining costs].
“The Saúva project stands out as the most meaningful project. It has the potential to increase Chapada copper production by 50 per cent and gold production by 100 per cent, and a PFS should be released by year-end. Permitting remains key to the project timeline. At Candelaria, the underground expansion has been reworked, with a focus on reducing capex intensity. Caserones has excess capacity in the cathode circuit.”
The analyst kept a “buy” rating and $17 target for its shares. The current average is $15.54.
Elsewhere, RBC’s Sam Crittenden reiterated a “sector perform” rating and $16 target.
“Lundin’s capital markets day provided a plan to grow copper production by 10% within the next 3-5 years and a more significant leap post 2030 as the Vicuna district ramps up. We believe this is an achievable plan to become a top global copper producer and our main reservation remains the long time frame to get there,” said Mr. Crittenden.
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In other analyst actions:
* Ahead of the release of its second-quarter results on June 25, TD Cowen’s Graham Ryding increased his target for shares of AGF Management Ltd. (AGF.B-T) to $15 from $13 with a “buy” rating. The average is $12.92.
“We are raising our estimates ahead of AGF’s Q2/F25 results,” he said. “AUM [assets under management] growth and flows have been stronger than expected through Q2/F25. This pushes our estimates higher, and our target price moves to $15.00 (from $13.00). We continue to view AGF as an attractive small-cap investment, with solid fundamentals and an attractive valuation.”
* Desjardins Securities’ Bryce Adams resumed coverage of Aya Gold & Silver Inc. (AYA-T) with a “buy” rating and $20 target following the closing of its recent equity financing. The average on the Street is $19.89.
“In our view, Aya is now comfortably funded until construction of Boumadine (potentially 2027) and has sufficient capacity to invest in exploration drilling across the asset base as well as project optimizations at Zgounder,” he said.
* In response to its US$36-million acquisition of the trademarks and intellectual property used by Colorado-based Cheba Hut Franchising, Raymond James’ Michael Glen raised his target for shares of Diversified Royalty Corp. (DIV-T) to $3.60 from $3.40, keeping an “outperform” rating, while CIBC’s Ty Collin bumped his target to $3.20 from $3.10 with a “neutral” rating. The average is $3.88.
“Cheba represents the 2nd U.S. based royalty transaction for DIV, and management remains active in building awareness of the financing structure with a heavy emphasis in the U.S. The royalty structure is specifically designed for franchise concept owners seeking a monetization alternative that allows for the retention of control and future upside as the concept grows and adds units," Mr. Glen said.