Inside the Market’s roundup of some of today’s key analyst actions
In response to Friday’s announcement of its decision to abandon its bid for MEG Energy Corp. (MEG-T) and a confirmation of its special $10-per-share dividend payment, National Bank Financial analyst Travis Wood downgraded Strathcona Resources Ltd. (SCR-T) to “sector perform” from “outperform” previously, citing valuation concerns.
“Overall, the revised corporate strategy and outlook as a heavy oil pure-play is largely in line with our expectations,“ he explained. ”However, based on share price outperformance since our initiation this past June, an expanded valuation multiple (5.7 times, up from 4.3 times in June), higher debt levels, and a compressed FCF outlook, we are downgrading to Sector Perform from Outperform. Following the $2.14 -billion distribution in December, we anticipate some short-term price weakness, which could present an opportunity for shareholders to build a position in Strathcona at a more attractive valuation.”
In a client note released before the bell, Mr. Wood said he doesn’t see “any material change” in the Calgary-based company’s strategy following Friday’s announcement, which included its 2026 guidance with a revised five-year plan as a pure-play heavy oil model. He continues to “believe Strathcona will prove to be a stronger thermal operator than it is currently credited for.”
“Although we view the current valuation as fair, our positive stance on the company’s ability to enhance value through asset optimization and operational execution remains unchanged,” he added. “We expect continued improvement in margins and SORs across the portfolio, particularly as medium-term organic growth projects come online, supporting an expanded FCF opportunity.
“Additionally, we reiterate Strathcona’s differentiated approach to the oil and gas sector, offering investors access to a long-term, private-style strategy that leverages a value investing approach. This embeds intrinsic value across the development of the portfolio over the long term. The company’s focus on corporate-level returns, driven by disciplined capital allocation and a unique organizational structure, fosters a culture of accountability and innovation.”
To reflect the company’s updated outlook, including higher debt levels and compressed free cash flow, Mr. Wood lowered his target for Strathcona shares to $38 from $42. The average target on the Street is $36.83, according to LSEG data.
Elsewhere, Scotia Capital’s Kevin Fisk raised his target to $40 from $34, keeping a “sector outperform” recommendation.
“SCR’s Montney disposition has transformed the company into a pure-play heavy oil producer with 120 mbbl/d of current production with plans to grow at a 10-per-cent CAGR [compound annual growth rate] over the next five years. We expect a modest negative share price reaction from the terminated bid and 2026 guidance featuring slightly lower than expected production and modestly higher capex. We have increased our price target to $40/sh to reflect the planned special dividend,” said Mr. Fisk.
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After GO Residential Real Estate Investment Trust (GO.U-T) defied “the odds” by completing Canada’s largest real estate investment trust initial public offering at US$410-million in July, RBC Dominion Securities analyst Jimmy Shan thinks it is “unclear whether the market will reward the small-cap REIT with a better cost of equity since its leverage structure impedes its ability to prove out its acquisition thesis while its valuation, despite attractive to private market, is largely in line with established, larger listed peers on leverage neutral basis.”
Accordingly, while acknowledging he continues to “lean constructive” on the Toronto-based REIT, which is focused on luxury high-rise multifamily properties in New York City “given its high-quality portfolio, a relatively strong Manhattan rental market and a well-aligned, specialized management team,” he initiated coverage with a “sector perform” recommendation on Tuesday.
“Avg CDN REIT IPO size in last 15 years is $100-million (Canadian),” said Mr. Shan. “Moreover, it was done when most listed residential REITs were/are trading at meaningful discounts to NAV and fund flows in the sector were generally weak. GO now finds itself with a suboptimal postIPO capital structure – its relatively higher leverage and a high cost of equity make it difficult to prove out its acquisition thesis and gain scale, both essential for a newly-listed small cap REIT to outperform.
“At the same time, GO has the key elements we like in a REIT. We are fans of local sharpshooters, especially those who are well aligned with unitholders and have shown an ability to sniff out and execute on good deals. The portfolio is of high quality, located in good NYC submarkets and has the highest average rent among N.A. listed residential REITs. The NYC rental market is strong, currently outperforming most Sun Belt markets. We expect broader market rent growth of ~4% and GO to do better in the near term given its portfolio mark-to-market rent opportunity.”
Seeing its valuation as “attractive relative to private market but largely in line with established listed peers,” the analyst set a target of US$14.50. The average is US$20.20.
“GO trades at implied cap rate of 5.7 per cent, 37-per-cent discount to NAV estimate of $19.25 and implies a portfolio value modestly higher than cost of portfolio when purchased in 2022,” he said. “When compared with both US and CDN-listed peers on a leverage neutral basis, GO is trading largely in line at a discount to Gross Asset Value of 16 per cent vs. 17 per cent. Our price target of $14.50 is based on a 25-per-cent discount to NAVPU [net asset value per unit] estimate. This discount assumes moderate multiple expansion as GO proves out its IPO forecast and NYC rental fundamentals remain positive.”
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With the near-term fundamental outlook for the copper having “substantially improved” following a rash of recent material supply disruptions, analysts at Scotia Capital are now projecting the largest absolute deficit in supply since 2004 next year and the largest deficit as a percent of annual demand (1.4 per cent) since 2010.
“Given this significantly tighter projected near-term market and low inventories, we anticipate markedly higher Cu prices ahead (including $5.25/lb in 2026),” said Orest Wowkodaw, Alfonso Salazar and Eric Winmill.
“Given the significantly tighter near-term outlook, which is expected to essentially deplete existing visible inventories by YE2026, we now forecast markedly higher 2025-2029 Cu prices of $4.50/lb, $5.25/lb, $5.00/lb, $5.25/lb, and $5.50/lb, up an average of 10 per cent per annum (including 17-per-cent rise in 2026). ... Our long-term incentive price of $4.50/lb is unchanged (we review this only annually). With low inventories and a very tight structural market, we see the potential for higher than anticipated Cu prices ahead, particularly if trade war uncertainty dissipates, another supply side shock emerges, and/or the U.S. dollar materially depreciates. Outside of Cu, we have made only modest changes to prices for other commodities.”
In a report previewing third-quarter earnings season, the analysts see their earnings expectations as “mixed” relative to the Street’s estimates for most companies, however they emphasized “material adjustments to consensus are still likely to come over the next two weeks.”
“We forecast CCO, ERO, HBM, and IVN to miss consensus EBITDA expectations (by more than 5 per cent), CIA, LUN, and NEXA to beat, with CS, GMEXICO, FCX, FM, SCCO, TECK, and VALE largely in-line (+/- 5 per cent),” they said. “On an EPS basis, we also expect mixed results, with notable projected misses by CCO, HBM, and ERO, with strong beats by CIA and VALE. ... CCO and FCX have the best track records of meeting EBITDA expectations over the past eight quarters, while CIA has posted the weakest results. CCO, HBM, and LUN have the strongest guidance track records over the past eight quarters, while ERO and TECK have demonstrated the weakest performance (largely due to ramp-up challenges at respective new mines).
“We anticipate slightly weaker results on a quarter-over-quarter basis as the benefit of higher commodity prices was in many cases more than offset by significantly weaker operational results related to several major disruptions (prices for Cu and 65-per-cent Fe were up 3 per cent and 9 per cent quarter-over-quarter). We forecast Cu output to decrease by an average of 3 per cent quarter-over-quarter and 4 per cent year-over-year (through Q3, we estimate that the companies have produced an average of 74 per cent of our full year estimates). Due primarily to several significant operating setbacks, average C1 Cu cash costs are projected to increase by 15 per cent quarter-over-quarter and by 14 per cent year-over-year despite markedly higher by-product Au/Ag prices. Overall, for the large and mid-cap miners, we forecast average EBITDA to decrease by 2 per cent quarter-over-quarter but to increase by 10 per cent year-over-year.
Pointing to higher commodity prices and improved multiples, the analysts raised their target prices for stocks in their coverage universe by an average of 15 per cent.
Mr. Wowkodaw also made one rating revision, downgraded Ero Copper Corp. (ERO-T) to “sector perform” from “sector outperform” previously “based on a less attractive risk-reward profile given relative valuation and the ongoing ramp-up risk at Tucumã.” His target rose to $32 from $26.50, topping the $29.11 average on the Street.
Other notable target changes include:
- Cameco Corp. (CCO-T, “sector outperform”) to $130 from $110. Average: $116.76.
- Capstone Copper Corp. (CS-T, “sector outperform”) to $16 from $11.50. Average: $12.69.
- First Quantum Minerals Ltd. (FM-T, “sector perform”) to $34 from $28. Average: $26.42.
- Hudbay Minerals Inc. (HBM-T, “sector outperform”) to $25 from $18.50. Average: $20.90.
- Lundin Mining Corp. (LUN-T, “sector outperform”) to $23 from $17. Average: $17.81.
- Teck Resources Ltd. (TECK.B-T, “sector outperform”) to $74 from $70. Average: $60.86.
“Among the producers, we recommend equity exposure to ALS, CCO, CIA, CS, HBM, IVN, LUN, TECK, and VALE. We rate ECOR, ERO, FCX, FM, GMEXICO, LIF, and NEXA as Sector Perform. Due to unattractive risk/reward profiles, we rate ANTO and SCCO Sector Underperform. Our preferred project developers include ASCU, DML, FOM, IE, NXE, and OM,” they noted.
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While Scotia Capital analyst Jonathan Goldman thinks BRP Inc.’s (DOO-T) recent Investor Day event “really hit home [its] best-in-class innovation and operations,” which is reflecting in “a positive long-term growth trajectory,” he recommends waiting for “a better entry point or fewer macro risks.”
“The event was very well attended by both sell-side and buy-side. The company presented two sets of targets: (1) M28 (calendar 2027) revenue and EPS of $9.5 billion and $8.00; and (2) mid-cycle revenue and EPS of $10 billion and $10.00. M28 targets could prove a low-bar as underlying macro assumptions seem conservative (read: no change in interest rate environment, flat industry, no restocking) while lean value savings alone could add $3.50/share (for context, F2026 EPS guidance is $4.50),” he said in a client note. “Defence is an area of upside as governments increase military spending. The wildcard to us is the competitive environment as we have to imagine peers will fight to maintain/gain share.
“On mid-cycle, we don’t think $10 is a stretch, but it depends on ‘when’, since anything becomes ‘mid-cycle’ given enough time. By 2027, we estimate DOO could generate EPS of $9.25, inclusive of buybacks. At historical P/E of 13 times, discounted to present value, that implies a fair value of $102/share.”
Mr. Goldman thinks the Valcourt, Que.-based manufacturer is “regaining the podium” in the outdoor recreational vehicle market while also becoming “leaner” moving forward.
“The company is aiming to recover to 30-per-cent market in SSV and hit 25 per cent in ATV,” he said. “The playbook includes expanding dealer coverage (+100 in U.S.); focusing on underperforming markets; and commercial strategies, such as introducing more affordable models. The company has assembled a small team to conduct R&D on adapting BRP vehicles for defense applications given heightened inbounds from several governments. While a small portion of the business, BRP has supplied military for the past 15 years.”
“The company is aiming for another $350 million of lean value savings, on top of the $300 million already archived under the previous strategic plan. Key initiatives include reducing time to market by 20 per cent, reducing development costs (e.g., expanding modularity and standardization), and improving asset utilization, which is currently running at 60 per cent. The company built up capacity during the COVID boom.”
Believing macro assumptions may prove to be “conservative,” he made “modest” upward revisions to our estimates, pointing to a lower interest expense following the recent debt restructuring. That led him to increase his target for BRP shares to $102 from $98, keeping a “sector perform” rating. The average is $103.31.
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After hosting Ivanhoe Electric Inc.’s (IE-T) president and chief executive officer Taylor Melvin for a series of investor meetings in London, Scotia Capital analyst Andrew Dusome reaffirmed his thesis that the Arizona-based company is “progressing toward becoming the next U.S. copper producer” with the U.S. government showing “strong industry support.”
He said potential backing from the government was a key topic of the meetings following recent investment in critical minerals companies, including Canada’s Lithium Americas Corp. (LAC-T) and Trilogy Metals Inc. (TMQ-T).
“We believe that IE is strategically positioned to be of interest for additional government support as one of the few copper projects which has progressed to a final bankable study and will produce a fully domestic source of copper for sale directly into the U.S. market,” he said. “Our current estimates call for Santa Cruz to begin producing first cathode in early 2029, slightly conservative to management’s guidance of 2H/28, which would notably fall within the tenure of the current administration. IE previously received an LOI from the U.S. EXIM bank for up to US$825-milion in debt financing, signaling strong government support for the project, and management has previously noted they are engaging with additional U.S. government agencies to explore funding opportunities. We learned in marketing that discussions with EXIM are progressing, with EXIM having a strong mandate to get deals done in support of the U.S. Government’s various critical minerals initiatives.
“We expect IE shares to continue experiencing volatility around the announcement of additional government initiatives to support mining projects within the U.S., and we would view these announcements as a positive catalyst for the company. Relationships with U.S. Government agencies appear strong, boosted by the connections held by Executive Chairman Robert Friedland, who has decades of experience in the international financial sector and mineral resource industry and is one of the leading mining entrepreneurs.”
Following the release of a prefeasibility study for its the Santa Cruz Copper Project in June, Mr. Dusome said Ivanhoe continues to advance financing and permitting efforts.
“Financing discussions are underway with several scenarios being considered including project-level debt and equity partners,” he said. “Given the projects advantageous location on private land, permitting efforts are largely with state/county/city agencies, with the key permits necessary to begin construction including: (1) approval of site plan (2) aquifer protection permits and (3) de-watering permit. Management remains confident in receiving these permits in 1H/26 to begin the initial boxcut next year.”
Maintaining his “outperform” rating for its shares, he raised his target to $22.50 from $18, seeing support from “multiple expansion given the positive sentiment for the development of critical metals mines in the U.S.” The average on the Street is $22.
“We believe IE warrants a premium multiple vs. peers driven by the attractiveness of the Santa Cruz Copper Project and management’s pedigree, including Executive Chairman Robert Friedland, who is a leading mining entrepreneur,” he added.
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Seeing the continued delay in closing the pending sale of its water and recycling facilities leading to heightened financial uncertainty, RBC Dominion Securities analyst Nelson Ng downgraded Calgary-based Green Impact Partners Inc. (GIP-X) to “sector perform” from “outperform” previously.
“The continued delay in the $54 million pending sale of GIP’s water and recycling facilities stems from the purchaser’s failure to meet its closing obligations under the purchase agreement, despite multiple extensions,” he said. “While GIP has received non-refundable deposits totalling $2.25 million, the delay has left the company in default on certain conditions of its corporate credit facility, creating financial strain. This has hindered GIP’s plans to improve its liquidity position by repaying its credit facility, which remains callable by the lender. Although GIP continues to receive interest from other parties, with one reportedly conducting advanced due diligence, there are no assurances that a new agreement will be reached or finalized.”
Mr. Ng emphasized the sale of its water, waste treatment, and recycling facilities, which are located in Alberta and Saskatchewan, are “critical to bolstering liquidity” and supporting growth for its Future Energy Park development.
“As of Q2/25, the company held $2 million in cash and was in a net debt position of $34 million,” he said. “We continue to believe that the company needs to divest its water and recycling facilities, so it can fully pay down its credit facility and have the financial resources to advance the Future Energy Park (FEP) development towards financial close.
“Upside remains if the company executes on FEP. We believe significant upside remains if the company can remain liquid and reach financial close on its $2 billion FEP development, which management believes could occur in Q4 2025 (construction completion targeted for 2028). With an estimated EBITDA range of $325-460 million and a valuation applying a 6 times EBITDA multiple to the mid-point of this range, FEP represents a significant value-creating opportunity for the company.”
Believing the majority of the Calgary-base company’s value “rests on management’s ability to reach financial close on the FEP development,” the analyst trimmed his target for its shares by $1 to $5. The average is $6.50.
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In other analyst actions:
* RBC’s Andrew Wong cut his Ag Growth International Inc. (AFN-T) target to $50 from $55 with an “outperform” rating. The average is $53.
“We see Q3 estimates as slightly below consensus, due to ongoing Farm segment weakness and incremental margin pressure from U.S. steel tariffs, although partially offset by stronger Commercial performance,” he said. “We still think 2025 guidance is achievable, although more back-end weighted due to being driven by Commerical contract wins offsetting softer Farm segment sales. We remain positive on Ag Growth given expectations for a Farm segment recovery in 2026, continued growth in Commercial, and a potential FCF inflection into 2027 (approximately 7-per-cent FCF yield in 2025/2026, 13 per cent in 2027).”
* BMO’s Thanos Moschopoulos raised his Celestica Inc. (CLS-N, CLS-T) target to US$300 from US$230 with an “outperform” rating. The average is US$227.25.
“We remain Outperform on CLS and have raised our estimates and target price ahead of Q3/25 results, and following OpenAI’s announcement of a strategic partnership with AVGO,” he said. “We believe CLS is likely to be a key beneficiary of OpenAI’s AVGO-based spend, and that this isn’t adequately reflected in current consensus estimates (particularly for FY2027, which we now focus on with respect to valuation).
“We believe the stock merits a premium multiple based on CLS’s customer exp”
* Scotia Capital’s Kevin Fisk raised his Cenovus Energy Inc. (CVE-T) target to $29 from $27 with a “sector outperform” rating. The average is $27.08.
* Following “mixed” third-quarter results, National Bank Financial’s Vishal Shreedhar reduced his MTY Food Group Inc. (MTY-T) to $43 from $51 with an “outperform” rating. Other changes include: TD Cowen’s Derek Lessard to $37 from $42 with a “hold” rating and RBC’s Ryland Conrad to $45 from $48 with a “sector perform” rating. The average is $46.33.
“Q3/F25 results reflected pressure in Canada (mall locations underperformed) and volatility in the U.S. Q4/F25 quarter-to-date trends point to slight improvement in Canada and continued choppiness in the U.S.,“ said Mr. Shreedhar. ”We expect the relaunch of Papa Murphy’s loyalty program and higher marketing (near end of October) to be supportive for U.S. growth. We view re-invigoration of Papa Murphy’s (16 per cent of system sales) to be key; we estimate Papa Murphy’s delivered sssg of negative 7 per cent (implies the remaining U.S. network delivered sssg of negative 1 per cent). A majority of U.S. store openings rely on Small Business Administration (SBA) support; openings may be impacted if SBA funding is disrupted (prolonged government shutdown). We revised our EBITDA estimates: F2025 is $261-million from $262-million and F2026 is $256-million from $262-million.”
* Expecting “a bit weaker” third quarter, Desjardins Securities’ Brent Stadler trimmed his Northland Power Inc. (NPI-T) target to $27 from $28 with a “buy” rating. The average is $27.73.
“We reduced our 3Q25 estimates given expectations for higher curtailments at the German offshore wind projects, reflecting some conservatism in our pre-completion revenue forecast at Hai Long, lower onshore weather resources, and our lower thermal forecast,” said Mr. Stadler. “These factors were partially offset by expectations for modestly better offshore wind speeds and higher FX than we forecast (impactful to EBITDA, but FCF is largely hedged). We estimate adjusted FCF/share of 5 cents (from 9 cents), which declines following the lower expected EBITDA.
“What to watch for with 3Q25 results. Commentary with the quarter could be relatively brief given NPI is hosting its investor day on November 20. With the quarter, we will be looking for: (1) a construction update on Hai Long, with NPI having installed roughly half the turbines (approximately 37) before heading into the winter break; (2) an update on construction progress at Baltic Power (as at 2Q results, 5 turbines had been installed); and (3) an update on the growth outlook including key markets.”
* Resuming coverage following its $147.5-million equity offering and acquisition of the Promenades St-Bruno mall, Desjardins Securities’ Lorne Kalmar increased his Primaris REIT (PMZ.UN-T) target to $17.50 from $17 with a “buy” rating, while TD Cowen’s Sam Damiani bumped his target to $18.50 from $18 with a “buy” rating. The average is $17.86.
“Why we like the acquisition. St-Bruno is a dominant pension fund–owned mall in a key Canadian market. This marks PMZ’s first property in the GMA, its fourth acquisition year-to-date and second one with CF, reinforcing a relationship that could yield further acquisition opportunities. The concurrent equity offering improves the REIT’s trading liquidity and dilutes the pension funds’ ownership interests. Lastly, the increase in the size of the portfolio and platform enhances leverage with tenants and expands its acquisition opportunity set to include larger assets,” said Mr. Kalmar.
* Barclays’ Theresa Chen increased her target for TC Energy Corp. (TRP-T) to $80, exceeding the $73.09 average, from $75 with a “overweight” rating.
* Jefferies’ Julien Dumoulin-Smith hiked his TransAlta Corp. (TA-T) target to $27 from $20 with a “buy” rating. The average is $18.77.