Inside the Market’s roundup of some of today’s key analyst actions
National Bank Financial analyst Jaeme Gloyn initiated coverage of Brookfield Corp. (BN-N, BN-T) and Brookfield Asset Management Ltd. (BAM-N, BAM-T) with “outperform” recommendations on Tuesday, encouraging investors to “‘play the field’ given Brookfield’s i) exposure to in-demand asset classes, ii) exceptional track record, iii) rapidly growing Wealth Solutions platform, iv) improving conditions for Real Estate assets, v) steadily growing carried interest, and vi) solid capital position.”
In a report released before the bell, Mr. Gloyn called Brookfield Corp. “the top-of-house piece of the Brookfield ecosystem.”
“The corporation is a leading global investment firm and holds significant interest in Brookfield’s public and private businesses including asset management, wealth solutions and operating businesses,” he adde. “BN benefits from the earnings growth of its subsidiaries and disposition gains on its principal investments.
“We believe BN best suits investors seeking a GARP idea. We apply a target multiple of 16 times on our NTM+1YR [next 12 months plus one-year] distributable earnings estimates, a premium to both the current trading multiple and long- and short-term averages. We believe BN merits a premium to historical DE trading multiples as we believe the growth in the Wealth Solutions segment creates a more diverse and resilient earnings profile. In addition, we believe lower / stabilizing interest rates could drive an increase in the trading multiple as the outlook for monetization shifts more favourably and concerns in rate-sensitive segments ease. Further, we believe BN’s positioning in high-growth sectors (e.g., private credit, infrastructure and renewable energy) provide a tailwind for growth and earnings quality, important for future multiple expansion.”
He set a target of US$82 for its shares. The average target on the Street is US$68.43, according to LSEG data.
Mr. Gloyn gave a US$71 target to Brookfield Asset Management, exceeding the current average of US$59.12.
“BAM is 73 per cent owned by BN and represents Brookfield’s asset management business focused on managing third-party capital across various alternative asset classes including infrastructure, renewable power, real estate, private equity and credit,” he said. “BAM benefits from management fees, performance fees and carried interest on its managed funds. We believe BAM better fits investors looking for a pure-play asset manager with healthy earnings compounding and a greater focus on income (BAM yields 3 per cent vs. BN’s 0.5-per-cent yield).
“We apply a target multiple of 35 times on our NTM+1YR distributable earnings estimates. This represents a premium to the current trading multiple and BAM’s average trading multiple of 31 times over the past 12 months. We believe BAM merits a premium valuation given the high-quality, diverse and perpetual nature of the earnings stream, a strong growth outlook, fee-related earnings margin expansion and a capital-light business model.”
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In a separate research report previewing earnings season for Canadian diversified financial companies, Mr. Gloyn reaffirmed his “favourable outlook” for property and casualty insurance providers, expecting fundamentals to “remain solid” into into the second half of 2025.
“While we have seen multiples re-rate to the high end of their historic range, we see upside from continued underwriting strength and book value growth,” he said. “While we’ve observed some softening in select areas of the market, overall conditions remain broadly attractive and are expected to stay firm through 2025. Additionally, moderating claims inflation and disciplined risk selection continue to support a constructive outlook for profitability. We maintain a favourable view on the near-term profitability setup, with the potential for M&A to enhance the outlook.”
He raised his target prices for shares of three of the four P&C insurance providers in his coverage universe:
- Definity Financial Corp. (DFY-T, “outperform”) to $92 from $90. The average is $81.
- Fairfax Financial Holdings Ltd. (FFH-T, “outperform”) to $3,000 from $2,700. Average: $2,796.98
- Intact Financial Corp. (IFC-T, “outperform”) to $350 from $341. Average: $328.23.
He kept a $57 target for Trisura Group Ltd. (TSU-T, “outperform”). The average is $53.25.
Mr. Gloyn also revisited his top picks for 2025, noting: Given the macro uncertainty to start the year, we split our top picks into two categories: i) quality names where we saw valuation upside despite the uncertainty (EFN and FFH), and ii) bargain picks where the macro was weighing too heavily (ECN, GSY and BBU). We acknowledged the latter would require a shift to a more risk-on environment to outperform. Our quality picks have continued to perform well year-to-date, while our bargain picks are beginning to catch up as markets lean more risk-on."
The companies given “quality with valuation upside” designations are:
* Element Fleet Management Corp. (EFN-T) with an “outperform” rating and $46 target, up from $40. Average: $38.36.
Analyst: “Up 23 per cent year-to-date, EFN has been one of the top performers in our coverage universe. We saw a low-risk beat and raise story developing in 2025 given: 1) continued execution on organic growth strategies, 2) the development of new revenue drivers such as insurance and SME/mid-market fleets, 3) mega-fleet wins not baked into guidance, and 4) ongoing re-rate potential. All of these factors remain key to our thesis, and following progress in H1, we are equally confident into H2 ... We continue to see the valuation as attractive, trading at an FCF yield of 6.5 per cent on 2026 estimates. We continue to believe double digit growth in EPS and FCF will drive compression in the FCF yield to the low to mid-single digits in line with other high-quality Financials and Industrials peers”
* Fairfax Financial
Analyst: “Fairfax has also delivered strong performance. Fairfax returned to our top picks list as we maintained the view that Fairfax’s operating income guidance was too conservative. We believed Fairfax would deliver consistent results and deploy excess capital to drive ROE accretion, ultimately, sustaining operating ROE in the mid-teens that warrants a valuation re-rate. So far, this view has played out as expected. Fairfax upgraded their annual operating income expectation to $5-billion (up from $4-billion), and we continue to see consistent underwriting results across the business. Additionally, with $2 billion in cash at the holdco and $3.0-billion in excess capital at its insurance subsidiaries, we expect FFH to complete more ROE accretive transactions in the near term. We believe that while FFH historically traded at a discount to peers BRK and MKL, it is actually FFH that deserves the premium valuation given the company’s outperformance on BVPS growth and average ROE over the past five and 10 years.”
Mr. Gloyn’s “bargain picks” are:
* ECN Capital Corp. (ECN-T) with an “outperform” rating and $5 target (unchanged). Average: $3.81.
Analyst: “Down 3 per cent year-to-date, ECN is our top pick for 2025. We saw ECN set up for a strong year based on: 1) the underappreciated growth outlook, 2) our increased confidence in Triad, 3) confidence in a recovery at RV & Marine (RVM), 4) significant valuation upside, and 5) the potential for an acquisition of Triad. While we remain cautious on RVM, the core elements of our thesis continue to hold. On #1, 2025 consensus EPS remains at the low end of management’s guidance, creating potential for material revisions as ECN executes. On #2, we continue to see long-term tailwinds driving industry growth. Additionally, operational improvements are beginning to show, with Triad outperforming industry growth and gaining market share.”
* Goeasy Ltd. (GSY-T) with an “outperform” rating and $255 target, up from $235. Average: $220.44.
Analyst: “Up 9 per cent year-to-date, goeasy had a slower start to the year but had a strong recovery in the more risk-on environment since the start of June (up 22 per cent). We saw goeasy as the biggest beneficiary of a soft-landing environment. We viewed the 20-per-cent valuation discount to its long-term average as an attractive entry point and combined with 15-per-cent EPS growth, presented significant upside potential. Today, GSY still trades at 9.0 times P/E, a 10-per-cent discount to its long-term average. We continue to believe that improving sentiment and consumer confidence, and confirmation peak losses are behind us could drive multiple expansion to the low teens (over 40-per-cent upside), where GSY has traded in better macroeconomic environments.”
* Brookfield Business Partners LP (BBU-N, BBU.UN-T) with an “outperform” rating and US$33 target. Average: US$30.67.
Analyst: “Up 8 per cent year-to-date, our call on BBU was largely conditional on a recovering macro backdrop. We believed that: i) lower rates and a ‘soft landing’ with improved capital markets conditions could lead to an IPO or monetization of Clarios for up to $10 per unit, ii) rate cuts would help narrow BBU’s discount to NAV, and iii) operational improvements underway could drive an incremental US$500 million in EBITDA to BBU. While lower rates have not materialized, our thesis still holds. We did not get the Clarios monetization we were looking for; however, BBU completed a dividend recapitalization returning $1.2-billion to BBU to accelerate capital recycling while maintaining the opportunity for an IPO when conditions improve. Additionally, we expect BBU to continue to buy back stock, with help from recent stake sales, to narrow the discount to NAV (currently 42 per cent). We maintain our view that rate cuts and an environment with improved transaction activity could accelerate the process turning BBU into a top performer. ”
Mr. Gloyn’s other target adjustments are:
- IGM Financial Inc. (IGM-T, “outperform”) to $56 from $54. Average: $50.
- Power Corp. of Canada (POW-T, “sector perform”) to $56 from $55. Average: $56.
- Timbercreek Financial Corp. (TF-T, “sector perform”) to $8.25 from $8. Average: $7.88.
- TMX Group Ltd. (X-T, “sector perform”) to $58 from $55. Average: $58.50.
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While acknowledging IT services management providers “still appear to have limited visibility on the coming quarters, Desjardins Securities analyst Jerome Dubreuil thinks their valuations offer ”long-term opportunity."
“The IT services sector continues to grapple with substantial demand uncertainty, driven by elevated geopolitical tensions and persistent global macroeconomic instability,” he said in a client note. “This environment is prompting clients to remain cautious on discretionary spending. Compared with the previous quarter, we do not expect a material change in the landscape.”
“With significant share price underperformance in the sector, coupled with DOGE’s focus seemingly shifting to modernization initiatives from pure cost-cutting, the small downside we see in current annual estimates for CGI looks priced in — we believe the current price is an attractive entry point for longer-term investors."
Mr. Dubreuil said he’d be a buyer of shares of Montreal-based CGI Inc. (GIB.A-T).
“For long-term-oriented investors, we recommend buying CGI shares as we believe current consensus estimates for the quarter accurately reflect industry conditions and the valuation gap between CGI and the S&P 500 based on NTM [next 12-month] P/E has never been wider (tracked since 2001),” he said. “While expectations for the next quarter (reporting in November) look slightly optimistic, the downside is unlikely to be material, barring any meaningful change in the macro environment.”
He trimmed his target for CGI shares to $166 from $173, reiterating a “buy” rating. The average is $168.38.
“CGI’ stock price has declined by 21 per cent from its peak in early 2025, driven by concerns related to the DOGE initiative, the uncertain geopolitical and economic environments, as well as soft discretionary spending,” he added. “We believe the stock price now largely reflects those concerns—consensus downside is quite limited in our view, and the valuation is at the low end of the historical range. ... CGI now trades significantly below the historical P/E NTM gap with the S&P 500. We have tracked this data since 2001 and there has not been a time when the P/E NTM gap with the S&P 500 was this wide. We note that our lower target price reflects only the recent increase in interest rates."
Mr. Dubreuil kept a $4.65 target for Telus International (Canada) Inc. (TIXT-T, “tender”) and $3.25 target for Alithya Group Inc. (ALYA-T, “buy”). The averages are $5.47 and $2.99, respectively.
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Desjardins Securities analyst Bryce Adams sees Magna Mining Inc. (NICU-X) as “well-positioned given its competitive advantage of operating and exploring the Sudbury basin for copper and nickel deposits.”
“Magna has a significant land position, and an ore processing agreement with Vale Canada which has excess processing capacity in the region,” he added. “We expect production growth over the medium term, and that ongoing exploration potential is key to share price appreciation.”
Mr. Adams initiated coverage of the Sudbury-based company with a “buy” recommendation, touting multiple development opportunities at its McCreedy West mine and its “above-average resource upside potential.”
"Through its active M&A approach, Magna has assembled an attractive portfolio of assets in the Sudbury basin,“ he said. ”Of note, the recently closed KGHM transaction includes the producing McCreedy West mine, near-term Levack development option and other longer-dated options. We expect Magna to continue its entrepreneurial M&A trend, further building its position in Sudbury and leveraging processing agreements with local partners."
“Magna provides investors with resource upside potential; drilling at McCreedy West and Levack is ongoing, and discovering another Morrison-like deposit represents the real prize for Magna shareholders, in our view.”
He set a target of $2.75, implying a 47.1-per-cent potential return to its current level. The average on the Street is $2.80.
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In other analyst actions:
* In an earnings preview for Canadian thermal independent power producers, TD Cowen’s John Mould raised his targets for Capital Power Corp. (CPX-T, “buy”) to $69 from $66 and TransAlta Corp. (TA-T, “buy”) to $19 from $17. The averages are $64.25 and $18.14, respectively.
“Q2/25 avg. Alberta power prices of $40/MWh were soft (new supply, mild weather),” said Mr. Mould. “We have raised our targets for CPX and TA primarily on company-specific items (PJM capacity auction & Centralia potential, respectively); we believe thematic tailwinds remain in place (load growth, reliability, potential data centre growth in Alberta). CPX is our top pick (thermal asset quality, growth track record).”
* National Bank’s Jaeme Gloyn moved First National Financial Corp. (FN-T) to “tender” from “sector perform” following the announcement of its agreement to sell a majority stake to private equity funds run by Brookfield Asset Management Ltd. (BAM-T) and Birch Hill Equity Partners Management Inc. His target rose to $48, which is now the average, from $39.
“We believe the transaction represents an attractive valuation for FN shareholders,“ said Mr. Gloyn. ”In addition, the transaction is the result of a strategic review process which included outreach to a broad pool of potential buyers and several acquisition proposals that fell below the Birch Hill and Brookfield offer. In our view, this reduces the likelihood of a superior bid emerging."
Elsewhere, Scotia’s Phil Hardie bumped his target to $48 from $46 with a “sector perform” rating, while TD Cowen’s Graham Ryding moved his recommendation to “sell” from “buy” with a $48 target, up from $41.
* Seeing its recent unit price pullback implying “pessimistic views on potential privatization, TD Cowen’s Sam Damiani reduced his H&R REIT (HR.UN-T) target to $14 from $14.50 with a “buy” rating. The average is $12.64.
“The unit price pullback reflects either a low probability that H&R’s board will transact, or expectations that the board may transact at a wide discount to NAV, we think,” he said. “For the reasons set out in our July 7 report, we are more optimistic on both fronts and reiterate our Buy rating. Our slightly lowered NAV and incorporation of cash taxes pulled our target price down.”
* In response to Monday’s announcement of a definitive agreement to be acquired by Torex Gold Resources Inc. (TXG-T), TD Cowen’s Steven Green downgraded Prime Mining Corp. (PRYM-T) to “sell” from “buy” with a $3.75 target, down from $5. Other changes include: Stifel’s Ralph Profiti to “hold” from “buy” with a $2.57 target, down from $4.75 and Desjardins Securities’ Allison Carson to “tender” from from “buy” with a $2.57 target, falling from $4.75. The average on the Street is $3.35.
Ms. Carson raised her target for Torex shares to $65 from $63, keeping a “buy” rating. The average is $60.81.
* In a report titled Is LULU Over-Investing in Innovation/Color?, Piper Sandler’s Anna Andreeva cut her target for Lululemon Athletica Inc. (LULU-Q) to US$200 from US$270 with a “neutral” rating, believing discounting is “picking up” and noting “questions around management change [are] becoming more common." The average is US$294.85.
"Decline in LULU shares this year is driven by correction in the multiple (on ’25E and ’26E, EV/Sales and EV/EBITDA is down 40 per cent on average year-to-date), with estimates down only modestly--with product execution still not fixed (we question if there’s an over-investment in innovation, with 57 instances of innovation/newness in color we count year-to-date, almost 3 times the levels last year) and sale section growing (# of SKU’s in We Made Too Much now slightly above last Holiday), there could be further risk to estimates,“ she said. ”Lower ’25E/’26E to $14.15/$14.50 (U.S. up 1 per cent both years) and PT to $200 (14 times our ’25E vs. 18 times previously, given lack of growth in the U.S.); with Alo/Vuori stores gaining 4 points of penetration vs. LULU’s footprint in key states of CA, FL, NY, NJ and TX vs. last year (and Alo now pushing into Canada), competition concern is becoming more real."
* Following a quarterly beat, Scotia’s Himanshu Gupta raised his StorageVault Canada Inc. (SVI-T) target to $5.50 from $5 with a “sector outperform” rating. The average is $5.25.
* Raymond James’ Luke Davis increased his target for shares of Surge Energy Inc. (SGY-T) to $9 from $8 with an “outperform” rating, while ATB Capital Markets’ Amir Arif bumped his target to $8.25 from $7.50 with an “outperform” rating. The average is $9.31.
“Surge’s 2Q25 print was punctuated by a favorable guidance adjustment driven by ongoing operational momentum that continues to enhance capital efficiencies,” said Mr. Davis. “We believe the company remains well positioned into the back half and see the potential for continued production outperformance despite a lighter capital program. That said, Surge shares have exhibited the best year-to-date performance in our SMID-cap coverage group (up 21 per cent since our upgrade earlier this month) and while the valuation remains reasonable, we would not be surprised to see momentum slow somewhat near-term as investors look to crystalize profits.”
* Following better-than-anticipated second-quarter results, JP Morgan’s Brian Ossenbeck raised his TFI International Inc. (TFII-N, TFII-T) target to US$116 from US$101 with an “overweight” rating. Other revisions include: BofA Securities’ Ken Hoexter to US$92 from US$90 with an “underperform” rating, Stifel’s J. Bruce Chan to US$96 from US$91 with a “hold” rating, National Bank’s Cameron Doerksen to $140 (Canadian) from $142 with an “outperform” rating and Scotia’s Konark Gupta to $144 from $140 with a “sector perform” rating. The average is US$112.79.
"We maintain our Outperform rating on TFI International shares following Q2/25 results,“ said Mr. Doerksen. ”Trucking end markets remain soft, and we do not anticipate any significant improvement in the near-term given the ongoing uncertainty around tariffs/trade that is impacting broader freight markets. As such, we believe the key catalyst for TFII shares will be internally generated margin improvement, especially at the company’s U.S. LTL [less-than-truckload] segment, and on that front we remain encouraged by the trends in Q2."