Inside the Market’s roundup of some of today’s key analyst actions
After an “uneventful” year thus far for housing-exposed building materials companies, National Bank Financial analyst Zachary Evershed reevaluated his valuations for stocks in his coverage universe, predicting a “stronger performance in Canada, and a continuation of the ho-hum market in the U.S. from 2025 into 2026, with potential for a slight uptick later in 2026.”
“We thought it timely to update our prior work on housing factors and their correlation to our coverage’s organic growth rates, as during our last analysis in 2023, we noted a spike in regression residuals complicating signal extraction (owing to exogenous macroeconomic shocks spurred by the pandemic),” he said. “While one could argue the aftereffects of the pandemic are still being felt, and acknowledging the current market is not without its own shocks, we repeat the statistician’s aphorism: all models are wrong, but some are useful.”
“With our refreshed set of correlations, we used the best fitting functions to calculate organic growth over the NTM [next 12 months] for each company, ending with a calculated weighted average , placing the highest value on drivers with the best explanatory power. On this refresh, we expanded our factor selection, notably adding mortgage rates, a mortgage application index, specific lumber species cash prices, and advance U.S. retail sales of building materials. Across all three companies, we found U.S. advance retail sales to be a worthy addition, a statistically significant variable with strong explanatory power. SYP and SPF lumber prices are also worth mentioning, notably for DBM (unsurprisingly), but also for ADEN and RCH: while neither of the latter companies’ portfolios has direct exposure to softwood, lumber pricing is nevertheless a solid leading indicator for both.”
Mr. Evershed said his conclusions reaffirmed channel checks from earlier in the year as well as “improving forward-looking homebuilder sentiment.”
“The ‘back half improvement’ narrative is now familiar,” he added. “We note that our U.S. forecasts are generally higher than the levels suggested by our correlation models as each distributor contends with tariff impacts by hiking prices.”
After adding 2027 projections to his valuation model, Mr. Evershed hiked his target prices for shares of the three companies in the space. They are:
* Adentra Inc. (ADEN-T, “outperform”) to $54.50 from $42.50. The average is $44.56.
* Doman Building Materials Group Ltd. (DBM-T, “outperform”) to $11.50 from $10.50. Average: $10.92.
* Richelieu Hardware Ltd. (RCH-T, “sector perform”) to $40.50 from $35. Average: $36.
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National Bank Financial analyst Jaeme Gloyn saw TMX Group Ltd.’s (X-T) third-quarter results as a "solid beat that highlights the strength of the TMX platform with strong revenue growth from all facets."
After the bell on Monday, TMX Group, which operates the Toronto Stock Exchange, reported revenue of $419-million, up 18 per cent year-over-year and above both Mr. Gloyn’s $412-million estimate and the Street’s projection of $408-million. Adjusted earnings per share rose 27 per cent to 52 cents, topping expectations by 3 cents.
“Derivatives and GSIA revenues drove the beat vs. the street as Capital Formation and Trading performed roughly in line,” said the analyst. “Against NBCM, Derivatives outperformed on another tick higher in capture rates at MX, though mgmt noted the benefit of terminating a market making agreement has reached run-rate. Within GSIA, VettaFi and Datalinx beat our estimates while Trayport fell just shy. In Capital Formation, strong Corporate Solutions (formerly Issuer Services) drove the stronger result on higher transfer agency fees, partially offset by lower interest income. Equity & FI Trading missed vs. NBCM on product mix.
“VettaFi revenues jumped 35 per cent, Trayport 16 per cent, Datalinx 12 per cent, Derivatives 27 per cent, and Equity & FI Trading up 18 per cent,” he added. “Moreover, TMX continues to deliver impressive operating leverage of 10 per cent as organic revenue growth of 17 per cent exceeded organic expense growth of 7 per cent.”
Emphasizing the continued strength of subsidiaries Trayport, which provides a network and data platform for European wholesale energy markets and differentiated index provider VettaFi, Mr. Gloyn raised his full-year 2025 and 2026 EPS projections to $2.06 and $2.24, respectively, from $2.01 and $2.22, and he introduced a 2027 estimate of $2.49.
That led him increase his target for TMX shares by $1 to $60 with a “sector perform” rating. The average is currently $61.63.
“We maintain a favourable view of TMX’s long-term growth outlook, strong track record of strategic execution (e.g., diversify business mix, invest in tech/data, grow derivatives and drive cost control) and defensive attributes (e.g., over 50-per-cent recurring revenue, diversified/counter-cyclical revenue drivers, strong balance sheet and solid FCF generation). Our estimates imply double-digit EPS growth rates through 2027 as we anticipate continued solid growth from TMX’s rapid growth segments (e.g., Derivatives, Trayport, VettaFi, Corporate Solutions), upside in trading volumes near term given volatility, and a potential medium-term rebound in additional listings revenues as M&A activity flows through. That said, we maintain our Sector Perform rating considering a lower total return to our target price relative to other companies in our coverage universe.” he noted.
Elsewhere, Raymond James’ Stephen Boland reduced his target to $59 from $62.50 with an “outperform” rating.
“Overall, this was another positive quarter for TMX. The ongoing diversification of the company is offsetting general economic concerns. We are lowering our EPS estimates slightly due to more conservative Derivative revenue,” said Mr. Boland.
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Wealthsimple Technologies Inc.’s latest $750-million financing “highlights embedded value” in IGM Financial Inc.’s (IGM-T) portfolio, according to RBC Dominion Securities analyst Bart Dziarski.
The Toronto online financial services provider achieved a $10-billion valuation on Monday after announcing that a group led by Dragoneer Investment Group and Singapore sovereign wealth fund GIC and also including Power Corp. of Canada (POW-T) and affiliate IGM Financial, had invested $750-million in the financing. Of that, $550-million went to the company, with the balance used to buy shares from existing investors.
"Following the Rockefeller re-valuation announcement on October 14th, IGM’s announcement further highlights its strategic investment strategy and value creation from high-growth wealth management partnerships," said Mr. Dziarski.
"IGM announced that Wealthsimple’s $750-million financing round ($550-million primary; $200-million secondary) values IGM’s equity stake at $2.16-billion an increase of $0.68-billion (up 46 per cent) from its Q2/25 carrying value. The re-valuation adds $2.87/ share to IGM’s book value. Given Wealthsimple recently crossed $100-billion AUM [assets under management] and the financing round values the business at $10-billion post-money, we estimate a 10-per-cent EV to AUM valuation multiple. "
The analyst emphasized IGM’s participation is “strengthening [its] portfolio diversification through high-growth wealth platforms.
“The Wealthisimple valuation uplift follows earlier value appreciation in Wealthsimple in Q2/25 and a recent re-valuation in Rockefeller, reinforcing the role of IGM’s strategic investments in driving value creation,” he said. “We believe these investments enhance diversification and optionality, complementing the firm’s core businesses, Mackenzie and IG WM. We estimate Wealthsimple and Rockefeller account for 30 per cent of our IGM NAV."
Mr. Dziarski raised his target for IGM shares to $55 from $52 to “reflect the uplift in Wealthsimple’s implied valuation” with a “sector perform” rating. The average is $56.17.
“Our Sector Perform rating on IGM is predicated on a more cautious view of the asset management space, driven by an uncertain macro outlook, market volatility, and persistent fee pressure. IGM’s current valuation does not compensate investors for our cautious stance. IGM has completed turnarounds at both its Wealth Management (IG WM) and Asset Management (Mackenzie) businesses which has helped stabilize net flows (particularly at IG WM). With the repositioning now complete, IGM is focused on new growth opportunities driven by strategic investments within both its IG WM (e.g. Wealthsimple, Rockefeller) and Mackenzie (e.g. ChinaAMC, Northleaf) businesses. IGM has an attractive 4-per-cent dividend yield which we view as sustainable.”
His target for Power Corp. rose by $1 to $60 with a “sector perform” rating. The average is $61.57.
“POW’s current 14-per-cent discount to NAV is in-line with our justified discount given i) simplified organizational structure over the last 5 years, ii) GWO, IGM and GBL re-positioning their businesses and sporting respectable growth outlooks, and iii) growing Alternatives platform providing upside optionality,“ he said. ”Since 2019, POW has been actively surfacing value with $3.6-billion of asset monetizations to simplify its equity story, redeploying capital into seed investments within Alternatives, and returning capital to shareholders via NCIB and growing dividends. We expect further value-enhancing transactions over time. We no longer see valuation upside potential from a narrowing NAV discount.”
Elsewhere, Scotia’s Phil Hardie raised his IGM target to $67 from $64 with a “sector perform” rating and his Power Corp. target to $69 from $68 with a “sector outperform” recommendation.
“We think the transaction highlights the overlooked valuation creation potential of IGM’s strategic investment portfolio and proprietary investments that make up the bulk of Power Corp’s ‘private stub’,” he said.
“We continue to believe IGM’s portfolio of strategic investments is not fully reflected in its stock price and represents a source of overlooked value. We estimate that IGM trades at a conventional EV/EBITDA (NTM) multiple of 8.8 times, but after adjustments for its strategic investments valued at roughly $33.25/sh, the stock trades at an Adj. EV/EBITDA of just 4.6 times. This represents a 41-per-cent discount to its North American peer group average compared with the estimated historical five-year average of 36 per cent despite its continued evolution and relative operational momentum. To narrow the discount structurally, we believe IGM will need to demonstrate not only resilience but also the underlying earnings growth potential of its evolving platform.”
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Desjardins Securities analyst Brent Stadler expects “a relatively tougher quarter for weather resources (industry wide),” leading to a reduction in his forecast for Boralex Inc. (BLX-T).
However, he continues to see an enticing opportunity for investors, seeing the Kingsey Falls, Que.-based company as “very attractively valued at current levels.”
“We are trimming our forecast by further reducing our generation assumptions,” he added. “In our view, BLX trades at a massive discount to NAV and at very attractive levels compared with recent peer transaction multiples, with a weather-driven tougher 3Q already priced in. BLX remains our Top Pick.”
Seeing "weak weather resources largely affecting its wind and hydro production, which are industrywide challenges that we expect are temporary," Mr. Stadler cut his quarterly EBITDA projection to $108-million from $117-million, falling below the average on the Street of $114-million and now in line with the results from the same period a year ago of $109-million.
Ahead of the Nov. 7 release of its results, Mr. Stadler trimmed his Street-high target for Boralex shares by $2 to $43, keeping a “top pick” recommendation. The average is $38.
“We conservatively reduced our generation assumptions by 3 per cent to reflect some additional conservatism in our model, which took our target to $43.00 (from $45.00),” he said. “We’d highlight that over the trailing three years (2022–24), BLX has beat our annual EBITDA estimate (published in our annual outlook every December) on average by 1.2 per cent while missing LTAs by 4.5 per cent (only missed LTAs by 3 per cent over the trailing five years), which shows that our EBITDA estimates have been conservative. Additionally, our estimates of recent peer transaction multiples (Encavis, NEOEN and INE) in the 11.5–13.5-times range are at each company’s forward guidance, which is generally set at LTAs or run rates. We believe this is something for investors to consider when we make conservative adjustments to our BLX estimates for what we’d view as temporary industry-wide weather-related challenges. Our $43.00 target at a conservative 2026E EBITDA implies an attractive 11.7-times multiple. Further, we believe BLX trading at 9.8 times on conservative 2026 estimates is a very attractive entry point for a high-quality onshore renewables platform."
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Seeing “more opportunity than risk,” BofA Securities analyst Michael Feniger upgraded RB Global Inc. (RBA-N, RBA-T) to “buy” from “neutral” previously.
“After RBA share price pull back, we believe risk-reward is turning more favorable,” he said. “RB is a leading marketplace for used assets (construction – CC&T, salvage vehicles - auto). While we would not dismiss recent overhangs (limited catastrophic events, decline in repairable claims, used auto concerns) and we do not view Q3 as a catalyst (BofA estimate: no upside to 2025 guide), we are looking through to a positive l-term story that builds in 2026: CC&T inflects, auto share gain story, new management starts flexing its muscles.”
Mr. Feniger thinks 2026 is poised to be the company’s first “clean year” since closing the IAA acquisition in 2023.
“We see GTV [gross transaction volumes] picking up from flat (2024-25e) to MSD [mid single digits] (2026e) and higher (2027e) as CC&T inflects and auto gains share,” he said. “Positive volumes drive upside due to RB’s high operational flow through. RB can evolve into a steady DD-growth EBITDA compounder with quality traits (high FCF, lower cyclicality).”
“We believe as the dust settles around auto credit headlines, the drivers in RB’s salvage market (repair costs, rising vehicle complexity) is unique vs overall used transactions. That said, we believe the auto financial strain on households is likely shifting behavior (i.e. decline in repair claims) but more on the margin. Not filing a $1,000 claim on a high deductible is one thing – an accident with a $10,000 claim is a different story.”
He maintained a US$120 price objective. The current average is US$118.57.
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After hosting investor meetings with Aritzia Inc. (ATZ-T) executives, including chief financial officer Todd Ingledew, Raymond James analyst Michael Glen continues to view the clothing retailer’s fiscal 2026 guidance as “very conservative (particularly F3Q) given weather has now shifted to a tailwind on seasonal product in many markets + early mobile app download success.”
“Focal points were the drivers of comp acceleration and the underlying growth algorithm, which we expect to be more topical as we move closer to the F4Q comp of up 26 per cent,” he added. “F2027 consensus is reflecting sales growth of $440-million (up 13 per cent year-over-year) and we look closely at the four distinct buckets that will support this growth. We also slightly moderate or 2H forecast to better align with guidance.”
“The Growth Algo Summarized. 1. New Store Openings. ATZ targeting 12-15 new stores/year (U.S. target is now 180–200 stores vs. 68) at 10k sq. ft. (non-flagship) with all in cost of $4-4.5-million. Budgeted sales/ft is $1000 in both USD and CAD (e.g. CAD equivalent closer to $1,400), which we believe underlies targeted payback of 12–18 months. Current sales/ft. trending much better than budget, with current paybacks less than 12 months. We estimate F2025 sales/ft. in $1,700 range, which could drive $250-million-plus of rolling new store sales over next 12 months; 2. Repositions. ATZ targets 3-5 per year with typical project adding +5k sq. ft. Management noted repositions have shown no sign of sales/ft. degradation with higher assortment and higher fitting room count supporting sell-through. We estimate repositions could add $30-35-million in sales in F2027; 3. Retail Comp / SSSG. Aritzia budgets for a mid-single digit retail comp, but figures have been trending ahead. Our model is currently forecasting a 3.5-per-cent retail comp in F2027 (as company laps challenging compares), and we calculate MSD [mid-single-digits] range could add $90-140-million in sales in F2027. 4. eCommerce Growth. We are currently forecasting 10-per-cent eCommerce growth in F2027, but acknowledge we are not factoring much in terms of contribution from mobile app (Oct 27 launch) and Intl website (late August). While more difficult to estimate (mobile app contribution is elusive), we see a potential $150-200-million of F2027 incremental."
Maintaining his “outperform” rating for the Vancouver-based company’s shares, Mr. Glen increased his target to a Street high of $110 from $100. The average is $99.64.
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In other analyst actions:
* In a third-quarter earnings preview for Canadian thermal-weighted Independent Power Producers (IPPs), TD Cowen’s John Mould raised his targets for Capital Power Corp. (CPX-T) to $78 from $72 and TransAlta Ltd. (TA-T) to $27 from $20 with “buy” ratings for both. The averages are $71.79 and $20.73, respectively.
“Q3/25 avg. Alberta power prices of $51/MWh were supported by a warm September. We have raised our targets for CPX and TA primarily due to expanded valuation parameters we view as supported by thematic tailwinds that we believe remain in place for the sector (load growth, reliability, potential data centre growth in Alberta). CPX remains our top pick (thermal asset quality, growth track record),” said Mr. Mould.
* Piper Sandler’s Derek Podhaizer raised his Precision Drilling Corp. (PDS-N, PD-T) target to US$79 from US$74 with an “overweight” rating. The average is US$84.81.
* JP Morgan’s Sebastiano Petti moved his target for Rogers Communications Inc. (RCI.B-T) to $62 from $59 with an “overweight” rating. The average is $57.23.
* Raymond James’ Steve Hansen hiked his Secure Waste Infrastructure Corp. (SES-T) target to $22 from $17.75 with an “outperform” rating. The average is $20.17.
“We are trimming our 2H25 estimates for SECURE Waste Infrastructure (SECURE) to account for sustained metals recycling headwinds associated with U.S. tariffs and reduced Canadian steel industry operating rates (↓ scrap demand). Notwithstanding these revisions, we are increasing our target price to $22.00 (vs. $17.75 prior) as we roll our valuation forward and continue to champion the firm’s: 1) formidable long-cycle waste infrastructure; 2) attractive growth opportunities (organic, M&A); 3) strong balance sheet; and 4) shareholder-friendly capital allocation policies,” he said.