Top picks for REITs in 2026 from a CIBC analyst

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Infrastructure

BMO analyst Ben Pham now favours pipelines over utilities within the dividend-heavy energy infrastructure sector,

“The Cdn. Govt’s focus on diversifying energy exports to new markets will continue to place investor focus on: (i) a proposed new 1M bbl/d oil pipeline to the West Coast, though we struggle to see a scenario where ENB or SOBO would invest unless adequate return protection. (ii) next wave of LNG export projects, including LNG Canada Phase 2 (14 mtpa) and Ksi Lisims (12 mtpa), both of which have been designated as “priority projects”. (iii) LPG - ALA recently sanctioned REEF Optimization Phase One (+25k bbl/d) and signaled a potential Phase Two (+60k) … Growth backlogs keep getting bigger. A common investor criticism of the sector a few years ago was that growth projects were waning. Zoom forward to today, the sector has assembled $63-billion of secured growth backlogs; we estimate this will increase up to 20 per cent by end of year … Much has been discussed of up to 10bcf/ d of natural gas that could be required to help power new U.S. DCs through end of 2030. We believe the narrative will increasingly include Alberta, where a series of DC announcements are expected in coming months. PPL noted 320mmcf/d of natural gas would be required to feed its 1.8GW Greenlight project and there are currently 20GW proposals in the queue. 7. Now prefer pipelines over utilities within Cdn. Energy Infrastructure. Our pipeline recommendations are KEY (OP), followed by TRP (OP), RGSI (OP), and PPL (OP). We remain Mkt on ENB, GEI, and SOBO”

Real estate

CIBC analyst Dean Wilkinson published his monthly report on the REIT sector which includes top picks,

“Modest returns driven predominantly by yield [forecast for 2026], ongoing long bond rate volatility, historically average FFO growth, against a mostly stable operating environment across most asset classes. We see a path to high single-digit average returns for REITs in 2026, coming from a current average yield of 5 per cent, FFO growth of 4 per cent, with limited expectations for valuation tailwinds to emerge … The aggregate demand from baby boomers should continue to deliver a healthy operating environment for seniors housing stocks, with an increasingly tightening market. The retail market also remains historically tight, without much relief from development. We also like the Retail REITs for their breadth: investors can seek defense in grocery-anchored real estate on well-capitalized balance sheets or they can look for more risk/growth in assets like enclosed malls (also on well-capitalized balance sheets). Industrial REITs will continue to offer healthy growth, capturing market rents in a market still moderating from the COVID-era boom for the asset class. We prefer the U.S. Residential names over the Canadian ones for now, as the Canadian market absorbs the twin impact of reduced demand (e.g., immigration) and increased supply … By asset class, we recommend CSH and SIA in Seniors Housing; FCR, PMZ in Retail; GRT in Industrial; and KMP, MHC, and GO in Residential. We have no Outperformer-rated names in Office, but we remain optimistic that could change over the course of 2026. In our diversified financials coverage, we tilt modestly towards BAM over BN as long-term core holdings”

Banks

Scotiabank analyst Mike Rizvanovic previewed 2026 for the major banks,

“We remain constructive on the Canadian banks even after a remarkable 2025 that generated more than 40-per-cent average total returns for the group, driven by elevated growth in market-sensitive businesses and meaningful multiple expansion that we believe was fully justified, while PCLs were manageable even in the face of rising macroeconomic risks. Looking ahead, we believe the banks are set up well for further gains and expect EPS growth of 10 per cent in each of the next two years. Our forecasts are unchanged from where they landed post-Q4, but we are slightly increasing our price targets as we now value the group using an average P/E multiple of 13.2 times (was 12.8 times) on our F27 EPS forecasts, which implies total return upside of 8 per cent, and in our view could be conservative given the recent string of outsized EPS results that have been reported relative to expectations. Our rankings are also unchanged among the large banks. NA remains our top pick with consensus expectations (and our own) potentially not fully capturing the upside to the bank’s ROE through F2027, followed by CM, which has been a very clean story of consistent execution, RY, which should continue to benefit from its scale advantage and diversification, TD, and BMO”.

Bluesky post of the day

Diversion

“Gizmodo’s Best of CES 2026 Awards: See the Winners” – Gizmodo