Inside the Market’s roundup of some of today’s key analyst actions
Stifel analyst Martin Landry thinks BRP Inc.’s (DOO-T) decision to introduce financial guidance for the remainder of the year suggests conditions for the recreational vehicle industry have ‘improved enough to give management confidence and visibility."
“With the depletion of inventory levels mostly done, investors’ focus will turn to the performance of the industry which was still declining low-single digit this quarter in North America,” he said in a client report. “A scenario of interest rates abating in the next twelve months could bring back lower income consumers to the stores. This could trigger an industry rebound, in our view, and a catalyst for the next leg of growth for BRP.”
On Friday, shares of the Valcourt, Que.-based company jumped 9.4 per cent after it said it expects earnings before interest, taxes, depreciation and amortization for its current 2026 fiscal year of $1.04-$1.09-billion, up 1 per cent year-over-year at its mid-point and exceeding both Mr. Landry’s $990-million projection and the Street’s estimate of $978-million.
The guidance was accompanied by better-than-anticipated second-quarter results, including revenue of $1.888-billion, up 4.3 per cent year-over-year and topping the analyst’s $1.837-billion estimate and the consensus of $1.775-billion. Earnings per share of 92 was also higher than expected (45 cents and 47 cents, respectively) due to a 35-cent non-recurring tax benefit.
“Management indicated that peak EBITDA margins of 19 per cent realized in FY22, were negatively impacted by 200 basis points due to the low profitability of the marine business,” said Mr. Landry. “This business has now been divested suggesting that, in optimal conditions, BRP’s EBITDA margins could rebound to 21 per cent, up from the 13-per-cent guidance for this year. A more realistic level near-term would be 17 per cent, which we believe could be attainable in the next 2-4 years suggesting potential EPS of $8.00-$10.00.”
The analyst now sees “increased visibility on a return to earnings growth” while also emphasizing the risk stemming from U.S. tariffs is “abating.”
Ski-Doo maker BRP reports better-than-expected profit in second quarter despite trade war
“BRP’s revenue, EBITDA, and EPS have declined year-over-year in the past seven quarters,” he said. “However, we expect this trend to reverse starting with Q3FY26. This is assuming continued industry weakness as BRP’s inventory depletion abates and comparable periods become easier.”
“Not too long ago, BRP was perceived as having a significant disadvantage to Polaris with the U.S. imposing tariffs on all Canadian and Mexican exports. However, tariffs are much more manageable than previously expected with a total unmitigated impact of $120-130 million, roughly 10 per cent of EBITDA under a worse case scenario.”
Seeing an “appealing” valuation for BRP shares, Mr. Landry raised his target to $97 from $88, keeping a “buy” recommendation, after increasing his EBITDA projection for 2027 by 6 per cent to reflect the guidance. The average on the Street is $82.31, according to LSEG data.
Elsewhere, a pair of analysts upgrade their recommendations for BRP shares:
* Canaccord Genuity’s Luke Hannan to “buy” from “hold” with a $108 target, rising from $80.
“With BRP reinstating F2026 guidance and implying significant operating leverage to come in H2/F26, we are taking this opportunity to upgrade the stock,” said Mr. Hannan. “We believe the company has approached an inflection point, having (substantially) cleaned up the inventory overhang at the dealer level. Though there may be an additional quarter or two of choppy trends in market share as competitors continue to work through their own glut of non-current inventory, BRP’s proactive stance in managing its own inventories at the dealer level leaves it well positioned for shipment growth in the quarters ahead, as its new model year product makes its way to dealers’ floors. Considering the runway ahead for margin expansion (i.e., BRP’s F2026 guidance implies a 13-per-cent EBITDA margin, below its peak 21-per-cent ex-Marine) and a growing body of evidence that the worst of the industry headwinds are behind it, we are comfortable upgrading the stock here. We derive our target price by assigning a two-turn multiple premium relative to BRP’s own historical EV/NTM EBITDA average of 6.8 times, which we believe is prudent considering the cyclical nature of the company’s business and how the company (and the industry as a whole) is underearning now.”
* CIBC’s Mark Petrie to “outperformer” from “neutral” with a $100 target, up from $66.
“While macro uncertainty persists, we are confident that not only is the bottom in for BRP margins, but also that it has levers to lead industry recovery, whatever shape it takes. While macro conditions could create volatility, we believe the October Investor Day will add credibility to BRP’s path for market share wins and margin recovery,” said Mr. Petrie.
Other analysts making target revisions include:
* Scotia’s Jonathan Goldman to $98 from $67 with a “sector perform” rating.
“DOO shares have run ahead of themselves, in our view,” said Mr. Goldman. “We acknowledge valuation parameters recede in significance for a deep cyclical at trough earnings with positive momentum and rate cut fervor. That said, we think the industry recovery will get drawn out longer than the expected while midcycle earnings power may also fall short. Powersports units volumes are already back to 2019 levels. Even if we use 2020 as our midcycle year (volumes 20 per cent above 2019), Powersports recoveries are notoriously drawn out. In the last two recessions – late 90s/early 2000s and GFC – it took DOO 10 years and 6 years respectively to recover to prior peak EBITDA. The near-term bull case centers on restocking, which is a $1.3-billion opportunity. But, we see little impetus for that to happen in the near-term with consumer sentiment still depressed, higher rates impacting spending, particularly lower end consumers who can’t get credit, and the industry just completing a lengthy (and painful) destocking cycle. Tariffs remain a risk, despite recent court rulings, including USMCA renegotiation next year.”
* National Bank’s Cameron Doerksen to $101 from $83 with a “sector perform” rating.
“Based on management’s newly introduced guidance that indicates solid year-over-year growth in H2, and additional year-over-year tailwinds expected in F2027, we believe BRP is now past the earnings trough in the current powersports market downturn,” said Mr. Doerksen. “However, the macroeconomic outlook remains uncertain and tariffs remain a risk, which keeps us cautious on the stock. With improved visibility into H2 and F2027, we are comfortable increasing our valuation multiple to 8.0 times (from 7.0 times), consistent with the long-term forward average for the stock. The increased multiple and some modest upward revisions to our forecast results in a new target.”
* RBC’s Sabahat Khan to $100 from $68 with an “outperform” rating,
“BRP reported good Q2 results, with the newly issued F26 guidance pointing to strong revenue (up 8-10 per cent year-over-year) and Normalized EBITDA (up 22-31 per cent year-over-year) growth through H2, supported by a largely ‘right-sized’ inventory backdrop. Looking ahead, while the tariff/macro backdrop continues to drive uncertainty, solid execution on the inventory clean- up, recent efficiency initiatives, and strong recent product introductions position the company well to deliver on the new guidance metrics,” said Mr. Khan.
* Citi’s James Hardiman to $93 from $69 with a “neutral” rating.
“While the 2Q beat was driven by tax benefits and channel fill, 2H guidance was well ahead of the Street on the top and bottom lines. DOO has done a commendable job in its inventory management in the face of tariffs, macro uncertainty and heightened promotions from competitors on non-current units, which puts the company in a position of relative strength in 2H,” he said.
* Desjardins Securities’ Benoit Poirier to $114 from $97 with a “buy” rating.
“Management repeatedly expressed confidence in the 2H ramp, suggesting solid internal visibility into dealer order volumes. It also noted improved dealer sentiment at the recent Club BRP event, further supporting this view. In our opinion, this reduces execution risk for the back half of the year as performance should be less dependent on retail/macro dynamics, providing a buffer for investors,” said Mr. Poirier.
* TD’s Brian Morrison to $106 from $87 with a “buy” rating.
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ATB Capital Markets analyst Tim Monachello sees the growth of Questor Technology Inc.’s (QST-X) Mexican rental fleet business as “the most tangible and material opportunity the Company has faced since its earnings collapsed in 2020, carrying potential to drive a transformational inflection in earnings over the medium-term.”
While cautioning “it is early days” for the opportunity, which he thinks “remains somewhat speculative and will hinge on its ability to execute on initial deployments and to sign additional contracts,” he raised his recommendation for the Calgary-based environmental emission reduction technology company to “speculative buy” from “sector perform” previously.
Shares of Questor have jumped almost 35 per cent since it reported better-than-anticipated second-quarter results before the bell on Aug. 8, including revenue of $3-million that was up 40 per cent sequentially to the highest level on record since the first quarter of 2020 and topping Mr. Monachello’s $2.2-million projection. Adjusted earnings before interest, taxes, depreciation, amortization and stock compensation of $0.9-million exceeded his $0.5-million forecast.
“QST’s strong Q2/25 results were a function of deliveries for multiple international orders signed over recent quarters,” the analyst said in a client note. “While we expect QST’s results to trend lower in Q3/25 given that its sales backlog has largely been executed, we understand that QST has secured rental work in Mexico that has the potential to transform its earnings profile over the coming quarters, and could provide significant upside for investors.
“More specifically, we understand QST has deployed six Q5000 incinerators in Mexico on a long-term contract, with line of sight to an additional six units in Q4/25. Past this, QST believes that customer project schedules could drive demand for up to 50 Q5000s by year-end 2026, representing $25-$30-million annualized revenue potential from Mexico alone (compared to just $5-million total revenue in 2024).”
Pointing to “a gradual deployment of rental incinerator units in Mexico,” Mr. Monachello raised his 2026 and 2027 EBITDAS estimates to repersent gains of 213 per cent and 265 per cent year-over-year, leading him to hike his target for Questor shares to 85 cents from 45 cents. The average on the Street is 78 cents.
“We move our target year to 2026 given tangible tailwinds to growth beginning in late 2025, helping to de-risk our growth trajectory,” he noted.
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Laurentian Bank of Canada’s (LB-T) third-quarter results displayed an improvement in loan growth, but the outlook moving forward is “muted”, according to National Bank Financial analyst Gabriel Dechaine.
“Loan balances came in 1 per cent ahead of our estimates, with an expected seasonal decline in inventory finance loans offset by strong performance in CRE construction loans (up 8 per cent quarter-over-quarter),” he said. “Looking ahead, management expects loan growth near term to be ‘muted’ as depressed utilization rates in inventory finance are expected to take time to normalize and CRE demand for new projects remains weak. Rate cuts could be a possible catalyst for both of these businesses, which could aid growth in 2026.
“Deposit trends appear favourable. LB’s deposits rose 2 per cent quarter-over-quarter, a positive development for a bank that has seen deposits shrink over the years. Moreover, growth was led by core demand/notice deposits (up 3 per cent quarter-over-quarter), with securitization debt staying flat.”
Shares of the Montreal-based bank fell 3.7 per cent on Friday despite reporting earnings earnings per share for the quarter of 78 cents, topping both Mr. Dechaine’s 70-cent estimate and the consensus projection of 73 cents.
“Q3/25’s EPS outperformance was driven by $9-milllion of performing provision releases relative to our forecast of $3-million of additions (plus 20 cents to EPS),” the analyst said.
“We believe these releases are at odds with other credit trends, namely: 1) impaired loan losses of $20-million (vs. estimate of $13-million) and 2) new formations up 28 per cent quarter-over-quarter, driven by commercial loans. Management explained that the highly collateralized nature of its commercial lending portfolio should limit eventual losses, and retained its ‘high-teens’ PCL ratio guidance for Q4/25 (vs. 16 basis points year-to-date and 12 bps during Q3/25).”
After reducing his forecast to reflect slower loan growth, Mr. Dechaine trimmed his target for Laurentian shares to $26 from $27, keeping an “underperform” rating. The average on the Street is $29.67.
Elsewhere, Raymond James’ Stephen Boland bumped his target to $30 from $28 with a “market perform” rating.
“Similar to the Big Banks, credit came in ahead of our expectations due to performing PCL releases on account of an improved macroeconomic outlook,” he said. “As guided by management, elevated expenses led to a higher efficiency ratio both quarter-over-quarter and year-over-year. This is expected to continue into 4Q25 and into 2026 as the bank continues to work through an ongoing turnaround process. Positively, Laurentian remains well-capitalized with an 11.3-per-cent CET1 ratio and credit remains healthy. The bank also believes Northpoint utilization rates could improve should US monetary policy ease over the coming quarters.
“We continue to wait for evidence of operational improvements before adopting a more positive outlook on the stock. Management noted that the company is tracking in-line with the expectations outlined at the company’s Investor Day, but LB remains at mid-single digit ROE business, and we expect this to remain for the next several quarters. We are adjusting our estimates for higher expense growth in 4Q25 and FY2026 as management continues to reposition the business.”
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RBC Dominion Securities analyst Paul Treiber thinks “an upward re-rating from trough levels appears increasingly likely” for Open Text Corp. (OTEX-Q, OTEX-T).
“We believe shares of OpenText are likely to see an upward valuation re-rating, given: 1) potential divestitures are likely to help reduce leverage; 2) OpenText’s organic growth profile is likely to improve following divestitures of non-core, declining segments; and 3) a new CEO and CFO may help improve investor confidence,” he said. “The magnitude of the re-rating will depend on the degree of OpenText’s post-divestiture organic growth.”
In a research report released Tuesday, Mr. Treiber predicted the Waterloo, Ont.-based enterprise software company is unlikely to change its content management software strategy following the contentious departure of long-time chief executive officer Mark Barrenechea last month.
“The company believes that the enterprise data in its content repositories are a significant differentiator in an AI world; OpenText ranks as the 5th largest repository of enterprise data globally, according to management,” he explained. “OpenText believes it is well positioned to sell AI into its customer base. We anticipate the leadership change will sharpen execution and OpenText will move quickly to divest non-core assets and return to positive organic growth.
“Divestitures to help reduce leverage and improve organic growth. OpenText is likely to divest its SMB Cybersecurity and DevOps businesses, which are declining an estimated 5 per cent organically and combined represent 15-20 per cent of total revenue. If OpenText sells these businesses for 2 times sales, we estimate leverage would decline from 2.9 times net debt / EBITDA (next 12 months) currently to 2.3 times and constant currency organic growth would improve from 0.4 per cent to 1.8 per cent.”
Mr. Treiber also thinks a new executive team may improve the Street’s view of the company.
“We believe the appointment of a CEO with a strong sales background who can articulate OpenText’s AI opportunity may help improve investor confidence,” he said. “OpenText has already started its CEO search and an announcement is possible in the next 3 months. A new CFO may improve investor sentiment regarding capital allocation.
“Magnitude of valuation re-rating depends on the degree of improved growth. OpenText is trading at 8.1 times NTM [next 12-month] P/E, below its 3-year pre-Micro Focus average of 13 times and peers at 34 times. Following divestitures, we believe reduced leverage and improved organic growth will help lift OpenText’s valuation. We think the magnitude of the re-rating would depend on the degree of organic growth improvement and the consistency of quarterly results. OpenText has experienced uneven organic growth (avg. 0.1 per cent in the 10 years prior to Micro Focus) and the mid-point of FY26 guidance implied organic growth is below consensus (0.5 per cent vs. consensus at 1.0 per cent).”
Maintaining his “sector perform” recommendation for Open Text shares, Mr. Treiber raised his target to US$35 from US$30. The average is US$32.82.
“While OpenText’s shares may experience a valuation re-rating in the short term, we believe other consolidators in our coverage will create shareholder value at higher rates over the long-term,” he added.
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RBC Dominion Securities analyst Rob Mann sees “the pieces falling into place” for International Petroleum Corp. (IPCO-T) with its “potentially transformational Blackrod Phase 1 project tracking towards first oil production in the second-half of 2026, adding to the company’s existing long-life, low-decline production base.”
However, given a 51-per-cent jump in its share price thus far in 2026 and a “premium” valuation compared to its peers, he initiated coverage of the Toronto-based international oil and gas exploration and production company with a “sector perform” recommendation on Monday, saying he views its shares “as fairly valued however do see the potential longer-term upside as Blackrod milestones are achieved in 2026-27 and beyond.”
“IPC has laid a strong foundation to set itself up for further success in the years ahead, in our view,” said Mr. Mann. “The company’s long-life, low-decline oil & gas production base in Canada, France and Malaysia underpins a corporate strategy which balances production growth, shareholder returns via buybacks, and a focus on balance sheet strength. IPC’s management team and Board are also highly aligned with shareholders via its collective 4.2-per-cent direct share ownership and the Lundin family trust ownership of 37.6 per cent.
“Focus is on Blackrod Phase 1. Completion of IPC’s major $850 million greenfield project at Blackrod, the company’s 30,000 bbl/d steam-assisted gravity drainage (SAGD) project in Alberta, should drive greater free cash flow generation in the years ahead. IPC has experience with SAGD production through its Onion Lake Thermal asset, which helps reinforce our confidence in the company’s execution and operating abilities. We expect production from the company’s base portfolio to remain relatively flat in 2026E, with a 30-per-cent year-over-year increase in equivalent production in 2027 leading to a meaningful inflection in free cash flow and favorable knock-on effects.”
Mr. Mann set a target of $26 per share. The current average is $24.71.
“IPC’s shares recently achieved all-time highs, driving a premium relative valuation which we believe reflects the longer-term upside potential from Blackrod, he explained. “Under current futures pricing, IPC is trading at a premium debt-adjusted cash flow multiple of 8.9 times in 2025E and 8.8 times in 2026E (vs. peers at 4.3 times and 4.1 times, respectively) and at a free cash flow yield of (4) per cent and 5 per cent, respectively (vs. peers at 10 per cent and 10 per cent, respectively). Looking ahead to 2027E, we see valuation begin to fall to more comfortable levels, with shares trading at a 6.1 times debt-adjusted cash flow multiple and an 11-per-cent free cash flow yield.
“All said, IPC’s shares appear fairly valued at current levels, but we do see longer-term upside potential upon successful execution of a number of critical Blackrod milestones and project ramp-up, ultimately driving strong free cash flow generation and balance sheet positioning in 2027E.”
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In other analyst actions:
* In a report released Tuesday reviewing earnings season for Canadian banks, Scotia’s Mike Rizvanovic raised his National Bank of Canada (NA-T) target to $150 from $147 with a “sector outperform” rating. The average is $151.42.
“We came into Q3 earnings cautious about the near-term outlook for the banks following the strong run-up in their share prices in recent months and were doubtful that results would drive forward earnings expectations higher,“ he said. ”Clearly, our caution was unwarranted as the large banks once again showed their resilience even in the face of ongoing macroeconomic uncertainty. The quarter featured a sizable EPS beat almost across-the-board, driven by top-line strength (NIMs and fee-based revenue), while credit losses were well-contained with the outlook for PCLs sounding a bit more constructive. Capital remained a tailwind with CET 1 ratios solid and several of the banks upping their commitments on share repurchases.
“We have not made any rating changes post-Q3, although following yet another clean, strong quarterly result, CM is now our top pick among the large banks, followed by RY, NA (both also SO-rated), BMO, and TD. Among the smaller banks that we cover, we prefer LB over EQB, with the latter having seen F2026 EPS consensus fall by 11 per cent following a sizable EPS miss that was broad-based. Within our coverage universe overall we now have a slight preference for the large Canadian banks over the large Canadian lifecos.”
* Canaccord Genuity’s Aravinda Galappatthige hiked his target for Abaxx Technologies Inc. (ABXX-NE) to $27.50 from $20 with a “buy” rating. The average is
“We have made certain positive updates to our model and valuations based on recent developments, in particular as we consider management comments during its last update call. First, we are hearing constructive commentary around volumes for its LNG contracts. Second, the launch of the Gold product appears to be ramping nicely and much faster than the original greenfield futures products. Third, the company is planning a slate of new futures products through Q4/25 and into F2026. Finally, the company is now pushing ahead with its technology initiatives facilitated by its ID++ and Abaxx Digital Title capabilities, with an H1/26 go-to-market objective,” he said.
* Desjardins Securities’ Frederic Tremblay trimmed his Atlas Engineered Products Ltd. (AEP-X) target to $1.35 from $1.50 with a “buy” rating. The average is $1.56.
“While 2Q reflected challenging market conditions, comments from management point to stronger performance in 2H25. We also like AEP’s continued execution of key strategic initiatives such as M&A and automation. In the coming months, we will watch for announcements by the Canadian government to address the housing shortage, which could reignite builder confidence and construction activity — this would be a catalyst for AEP’s coast-to-coast manufacturing network,” said Mr. Tremblay.
* Jefferies’ Lloyd Byrne raised his Cenovus Energy Inc. (CVE-T) target to $29, exceeding the $26.95 average on the Street, from $25 with a “buy” rating.
* Jefferies’ Randal Konik cut his target for Lululemon Athletica Inc. (LULU-Q) to US$150, which is a low on the Street, from US$160 with an “underperform” rating. The average is US$273.85.
* Desjardins Securities’ Bryce Adams raised his Magna Mining Inc. (NICU-X) target to $4, exceeding the $3.69 average, from $2.75 with a “buy” rating.
“Magna reported a transitional 2Q25, with broadly in-line operating and financial results ... Separately and significantly, Magna reported a drill result from the new R2 target which is fast developing into a discovery and has strong comparisons to the initial drill results reported by FNX which discovered the Morrison deposit (near to R2) in 2005. We have included 650kt of R2 material in our Levack mineable model, and increased our target price,” he said.