Inside the Market’s roundup of some of today’s key analyst actions
Bank of Nova Scotia (BNS-T) “is simply too cheap” on a valuation basis against its peers and this discount is going to narrow as its international operations finally gain traction, said Canaccord Genuity analyst Matthew Lee.
He raised his price target to C$85 from C$81 and reiterated a “buy” rating on the Canadian bank as he raised his earnings estimates on its international operations, which are focused on Latin America.
“For the last several years, the international segment has served as an anchor to the BNS thesis, with its modest pre-tax, pre-provision earnings growth largely overshadowed by its credit profile and exposure to geopolitical uncertainty,” Mr. Lee said in a note to clients.
“While we appreciate that fiscal 2025 will be a transition year, we opine that management’s current restructuring is setting International up for multiple years of self-funded high single-digit to low double-digit earnings growth. Although BNS must still prove out its Canadian primacy and US expansion plans, we believe the 2.5x gap between BNS at 10.3x next 12 months P/E and the group, at 12.8x, should narrow as International proves its ability to be a positive contributor to our Scotiabank thesis. We have adjusted our estimates upwards for BNS on the back of our analysis, now sitting above consensus for both F26 and F27.”
“At times, investors have viewed BNS’ LATAM business as a monolithic enterprise, with operations arbitrarily scattered across the continent. The truth is that the segment is relatively focused, with about 77% of its international loan book in Mexico, Peru, and Chile — three countries that stand out against their peers for their economic growth, declining central bank rates, and increasingly pro-business government policies. General guidance from major LATAM banks suggests high single-digit to low double-digit earnings growth for F25 on the back of accelerating loan book growth, improving PCLs, and stable NIM – trends that should support Scotia’s international business over the next several years," he said.
Mr. Lee argued that Scotiabank currently has the “greatest asymmetric return profile” of the Canadian banks.
The average analyst price target on Bank of Nova Scotia is C$78.07, according to LSEG data.
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TD Securities analyst Tim James downgraded Bombardier Inc. (BBD-B-T) to “hold” from “buy”, citing its recent surge in stock value and multiple expansion.
The analyst stressed the decision does not reflect his view of the quarter, business outlook, or industry backdrop, but rather it is valuation-based. “Further multiple expansion requires time and financial results,” Mr. James told clients in a note.
Like many analysts in recent days, he also raised his price target on the high-flying stock, going to $173 from $151.
“We believe BBD has a strong outlook as to industry, earnings and balance sheet trends, and the current management and product portfolio could eventually provide upside well beyond our 12-month target,” Mr. James said.
But he also noted that the stock has weakened following recent earnings reports, regardless of how the results came in versus estimates. “Although we do not see a reason for a post-Q2 pullback, we have not necessarily understood market reactions in the past either, and believe that the recent share-price strength may heighten Q2 hurdle for driving further short-term upside,” he cautioned.
The average analyst price target is C$155.07.
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Fundamentals are looking strong for Sprott Inc. (SII-T) but also appear to be priced into the stock already, said TD Securities analyst Graham Ryding. He downgraded his rating to “hold” from “buy” citing valuation concerns after the stock’s 71% rally this year.
“Assets under management growth has been material and our earnings outlook has increased as a result. That said, valuation has also moved higher. Current valuation is a premium relative to Sprott’s own history, and alternative asset manager comparables, suggesting to us that valuation upside may be limited,” Mr. Ryding said in a note.
The current share price implies a price to earnings of 29.7 times based on fiscal fourth quarter estimates, well above the five-year average of 23.0 times and the U.S. alternative asset managers’ average of 25.5, he said.
He raised his price target to C$100 from C$84. The average analyst target is C$79.88.
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Raymond James analyst Theo Genzebu upgraded Fortis Inc. (FTS-T) to “outperform” from “market perform” citing recent share price depreciation. It’s down about 4.5% from May and is now trading close to the mid-range of its historical range, he noted.
His price target remains at C$69.
Despite the upgrade, Fortis is not his favourite utility stock at the moment.
“We reiterate our 2025 best pick in Emera (EMA-T), as we continue to believe that the company’s asset sales last year and improved liquidity facilitate further investments in the high-growth region of Florida while improving its credit metrics,” he told clients in a second quarter earnings preview note for the sector.
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Raymond James analyst Michael Barth initiated coverage on ACT Energy Technologies Ltd. (ACX-T), one of the largest directional drilling businesses in North America, with an “outperform” rating. His price target is C$9.
He notes that stock is down about 30% this year - more than most of its peers - and trading near two-year lows on the back of commodity price weakness and a related decline in drilling activity. He thinks that creates an attractive buying opportunity.
“In our view, risk to industry drilling activity is skewed to the upside into 2026 while implied expectations suggest investors are pricing in further erosion to the active rig count,” Mr. Barth said in a note to clients.
“We also see an ACX-specific opportunity for margin expansion on the shift away from MWD rentals, which creates a significant EBITDA tailwind through 2025. The stock is trading at a about 17% free cash flow yield on both our 2025 and 2026 estimates, and the company has ample capacity to max out an NCIB while continuing to grow the business,” he said.
He also thinks additional M&A could represent significant upside to his estimates.
The average analyst price target is C$9.30.
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Canaccord Genuity analyst Tania Armstrong-Whitworth initiated coverage on Bitcoin Treasury Corp. (BTCT-X) with a “buy” rating and C$14 price target, believing the company fills a gap in the crypto space for investors.
BTCT is Canada’s first at-scale corporate treasury vehicle. It provides investors levered, forex-neutral, and registered-account eligible exposure to Bitcoin. The strategy accumulates Bitcoin, holds it securely, and selectively monetizes through institutional services.
Ms. Armstrong-Whitworth says this clear business plan makes the stock appealing. “Investors are increasingly wary of complexity in digital asset structures. This positions BTCT squarely between passive ETFs and operationally complex mining equities. With an embedded NAV discount, clear KPIs, and shepherded by a proven ETF management team, we see material re-rating potential as the treasury scales and BTCT executes its commercial business plan,” she said.
Something else appealing for Ms, Armstrong-Whitworth: BTCT is operated by the founding team behind Evolve ETFs, one of Canada’s most successful independent ETF managers.
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RBC analyst Sabahat Khan raised his price target on AutoCanada Inc. (ACQ-T) to C$27 from C$18, citing steady progress with its transformation initiative that was announced in second quarter 2024 results.
“Most recently, the company sold 13 U.S. dealerships for about $83 million, which will help the company manage its leverage position over the near-term (4.9x exiting Q1). Following the sale/cash infusion, we revise our forecasts ... With that said, the uncertain macro backdrop (e.g., US tariffs, weak consumer confidence) keeps us on the sidelines,” the RBC analyst said.
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At least seven analysts have raised their price targets on Amazon.com (AMZN-Q) ahead of quarterly earnings.
Among them was Brian J. Pitz of BMO, who raised his target to US$270 from US$233 and reiterated an “outperform” rating. He said demand improved for Amazon’s web services in the second quarter. Meanwhile, an extended Prime Day this year, and benefits from forex fluctuations, prompted him to make a 130 basis point increase in his estimated 2025 gross merchandise value [GMV] forecast.
“Proprietary channel checks indicate a mid-teens GMV growth YoY (compared to the same four-day period last year) while ASPs [average selling prices] remain stable despite tariffs,” he said.
Other analyst price target changes included:
Citigroup to $265 from $225; Deutsche Bank to $266 from $230; HSBC to $256 from $240; Needham to $265 from $220; and Scotiabank to $275 from $250 (All targets in U.S. dollars).
The average analyst price target is now US$251.34, up from $242.34 a month ago.
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Meta Platforms Inc. (META-Q) is seeing a slew of price target hikes this morning ahead of its earnings. Among them: Bernstein went to $775 from $700; Moffettnathanson raises target price by $205 to $810; Scotiabank went to $675 from $525; and Stifel went to $845 from $655 (All figures U.S. dollars).
Said Scotiabank analyst Nat Schindler: “We expect tariff impacts to persist during 2Q, but will be offset by increased budgets from non-US advertisers due to USD depreciation. Further, WhatsApp monetization should begin in 2H, which could contribute ~2-3% of run-rate revenue by the end of ‘26. Lastly, we believe that algorithms have continued to benefit from deepening neural networks, driving improving ad ROI over the next year.”
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In other analyst actions:
JPMorgan downgraded Lululemon Athletica (LULU-Q) to “neutral” from “overweight” and cut its price target to US$224 from US$303
Aecon Group Inc (ARE-T): BMO raises target price to C$22 from C$19
Air Canada (AC-T): Raymond James raises target price to C$27 from C$24
Atkinsréalis (ATRL-T): BMO raises target price to C$106 from C$94
Cameco Corp (CCO-T): Stifel raises target price to C$115 from C$105
Canfor Corp (CFP-T): Raymond James cuts to “outperform” from “strong buy” and cuts target price to C$19 from C$22
Finning International Inc (FTT-T): BMO raises target price to C$66 from C$57
Interfor Corp (IFP-T): Raymond James cuts to “outperform” from “strong buy” and cuts target price to C$19 from C$22
Toromont Industries Ltd (TIH-T): BMO raises target price to C$140 from C$128
Wajax Corp (WJX-T): BMO raises target price to C$25 from C$22
WSP Global Inc (WSP-T): BMO raises target price to C$312 from C$298