Inside the Market’s roundup of some of today’s key analyst actions
Ahead of the release of BRP Inc.’s (DOO-T) fiscal third-quarter results on Dec. 4, National Bank Financial analyst Cameron Doerksen thinks the recent downturn in the powersports industry is “past the trough” with inventories “more balanced” and interest rates “less of a headwind for both consumers and dealers.”
Accordingly, he now expects to see improved results for the Valcourt, Que.-based manufacturer moving forward, emphasizing its management laid out “a credible plan” in late October to grow earnings per share to $8.00 in fiscal 2028 from its $4.25-$4.75 guidance range for 2026.
“While retail demand overall remains somewhat uncertain given the broader macroeconomic context on North America, leaner industry dealer inventories and lower interest rates should be helpful for powersports OEMs,” he added. “BRP’s largest competitor in the ORV segment, Polaris, reported that its calendar Q3 North American retail was up 9 per cent year-over-year with the overall industry up low single digits. At its investor day in October, BRP management noted that demand trends were running in line with its plans for Q3 and Q4 and the dealer pick-up for the new models introduced at Club BRP in August has been strong.”
In a research note released before the bell, Mr. Doerksen did warn of the lingering presence of two factors that warrant concern for investors: “still some concerns over retail health” and the impact of the ongoing tariff and trade dispute with the United States.
“Powersports retail trends have been improved of late, but consumer confidence in the U.S. (and in many other markets) remains low with other macroeconomic concerns building, including higher unemployment in the U.S,” he said. “We believe improving retail will be needed to sustain BRP share price momentum, but it is not clear that retail trends will continue positively in the coming quarters, in our view.
“Tariffs/trade remain a key risk. Given BRP’s USMCA compliance, the tariff situation is manageable for now for the company; indeed, BRP is in a relatively more favorable position than many of its major competitors. However, the USMCA agreement faces a review in 2026 and while theoretically the agreement would not terminate until 2036 in the event the three countries can’t agree on changes, we are nevertheless concerned that the U.S. Administration will demand substantive changes to the agreement that could impact BRP’s manufacturing competitiveness, or that the U.S. could simply ignore its obligations under the agreement and unilaterally impose tariffs on Mexican and Canadian goods that are currently USMCA exempt. Recall that almost all of BRP’s unit production is in either Mexico or Canada with no material manufacturing footprint in the U.S. (approximately 60 per cent of sales in the U.S.). Uncertainty around the USMCA agreement could limit valuation upside for BRP shares until there is more clarity on the review outcome.”
Maintaining a “sector perform” recommendation for BRP shares, Mr. Doerksen raised his target to $105 from $101. The average target on the Street is $104.47.
“We have made only minor adjustments for Q3 and now forecast EPS of $1.17 versus $1.15 previously (consensus sits at $1.20),” he said. “We have modestly increased our revenue and earnings forecasts for F2027 to reflect what we see as incremental improvements in industry dynamics, particularly more balanced dealer inventories that should boost wholesale demand from dealers as well as limit promotional activity. We have also adjusted our forecast to account for the recent repricing of BRP’s term loan facility and reduction in long-term debt. The F2026 EPS guidance range (currently $4.25-$4.75) may move higher to reflect the expected interest cost savings.”
=====
Scotia Capital analyst John Zamparo sees the decision by MTY Food Group Inc. (MTY-T) to begin a formal review process with the aim of boosting shareholder returns as “somewhat unsurprising but a clear positive for investors.”
Shares of the Montreal-based franchiser and operator of Thai Express, Wetzel’s Pretzels and other quick-service restaurants soared 13.5 per cent on Monday after it revealed it is exploring strategic options that could lead to the sale of the business.
“A review of various deals could suggest approximately 8.5 times EBITDA or $53/share, in our view,” said Mr. Zamparo. “However, gauging a reasonable level presents challenges: recent deals (DENN at 7.7 times NTM [next 12 months], CHUY at 10.3 times LTM [last 12 months]) lack MTY’s complexity, while the acquisition of the most similar business (RECP at 8.4 times) occurred in better industry conditions. Also relevant is MTY’s FCF generation, which (relative to EBITDA) is superior to those names. If a deal does occur, meaningful upside remains: MTY traded at 6.4 times (GAAP basis) pre-news breaking; now at 6.9 times. The key question for us is whether MTY’s 90-brand portfolio reduces interest from strategic players, which limits potential buyers to private equity.”
In a client note, Mr. Zamparo emphasized complexity may be the largest obstacle to the sale of the company.
“The challenge MTY may face in seeking a buyer is questionable interest from strategics, who we believe wish to target a simpler portfolio,” he said. “If so, this leaves private equity names as the most likely acquirors. A smaller pool of buyers lowers a successful outcome, though MTY’s FCF yield of 15 per cent, potential returns can still be quite compelling even in a higher-rate world.”
“If a buyer for the entire business does not emerge, we expect MTY will look to sell some of its brands. This would likely be more compelling to various strategic buyers, in our opinion. MTY’s largest banners include Papa Murphy’s ($1-billion in system sales) and Cold Stone Creamery ($900-million). That said, we do not expect either to be the most likely sale candidates in an asset sale. Cold Stone has been a star performer and likely one MTY would like to retain, in our opinion. Meanwhile, Papa Murphy’s is undergoing a systemwide improvement plan, and we expect MTY wishes to improve EBITDA generation before exploring any divestiture. We expect MTY to prioritize selling banners that are mostly corporate-owned.”
His target for MTY shares rose to $41 from $39 with a “sector perform” rating. The average is $44.33.
“In thinking about potential downside if no buyer is found, we believe it could be lower than today’s pre-affected price of $33.50, as the stock carried at least some level of expectation of a potential acquisition, albeit likely a low one. We believe outside of M&A, the stock’s most important potential catalysts remain unchanged: higher organic growth (units, comps, EBITDA), or improved industry conditions,” concluded Mr. Zamparo.
=====
TD Cowen analyst Tim James continues to see bullish fundamentals for Bombardier Inc. (BBD.B-T), however he thinks its valuation remains “reasonable” and maintained a “hold” recommendation for investors.
“While Defense backdrop has improved during 2025 and civil jet cycle remains constructive, (strong) earnings outlook for 2025-2027 remains largely unchanged,” he said. “We believe incremental longer-term upside/de-risking is accounted for in 11.9 times forward EBITDA multiple and view consolidation as likely absent additional catalysts to 2026/27 earnings estimates.”
In a client note released before the bell, Mr. James adjusted his forecasts for the Montreal-based company to reflect “updated assumptions for the impact of expected delivery mix and supply chain headwinds on Q4/25 and 2026, the net impact of which is a slight bias lower to our estimates.”
“Upper end of 2025 FCF guide is coming into view based on year-to-date results, Civil jet delivery cadence, mix shift, demand environment/order activity, Services growth, and Defense deliveries,” he explained. “Q4 deliveries (40 per cent of 2025 vs. 39 per cent in Q4/24) expected to be weighted toward large cabin aircraft (higher dollar value and margin). Order activity remains strong suggesting FCF benefits from deposits. Services strength should continue through Q4 (TD Cowen: up 10 per cent year-over-year). Management expects at least 10 Defense deliveries in Q4 (higher $ and margin %). Supply chain headwinds are expected to persist. We estimate that our forecast and consensus imply some moderation from Q3/25 impact.”
After revising his valuation methodology, Mr. James raised his target for Bombardier shares to $203 from $197, remaining under the $216.75 average on the Street.
“Our long-term/2030 outlook remains largely unchanged,” he said. “We forecast annual adj. EBITDA margin expansion through 2027 and beyond driven by Services and Defense growth, Global 8000 deliveries and easing supply chain. There is upside in excess of our target beyond 12 months, in our view.”
=====
TD Cowen analyst Brian Morrison reaffirmed his “buy” recommendations for both Groupe Dynamite Inc. (GRDG-T) and Aritzia Inc. (ATZ-T) ahead of the release of their third-quarter results, believing “positive consumer demand trends for each appear to have accelerated since Q2, that we feel should lead to upward revisions to sell-side estimates.”
“We view current trading multiples at the high-end of high-growth peers as warranted, but acknowledge meeting/exceeding consensus is ‘a must’ to sustain share price momentum,” he added.
In a client note, Mr. Morrison said recent channel checks have been “positive” and point to growth for both retailers, leading him to predict both with announced annual guidance increases.
“The key driver of our revisions for both GDI and Aritzia are our recent channel/observed sales data checks, that each illustrate consumer demand trends well ahead of its peer group,” he explained. “We attribute this strength to the success of their product offerings - GDI’s open-to-buy strategy is driving on-trend inventory, Aritzia’s ‘everyday luxury’ value proposition is resonating - along with both companies’ expansion strategies (notably in the U.S.).”
“We expect strong year-over-year Q3 results for GDI/Aritzia. For GDI, strong SSSG [same-store sales growth], store up-tiering, and expansion initiatives support a positive growth outlook. For Aritzia, SSSG, new store openings, and the launch of its mobile app should drive sales growth. Consensus is near the high end of company guidance, so upward revisions to guidance/consensus may be required to maintain share price momentum.
Believing premium valuations are “warranted” for both companies, Mr. Morrison raised his target for Aritzia shares to $110 from $93 and Groupe Dynamite to $68 from $55. The averages on the Street are $105 and $62.42, respectively.
“GDI and Aritzia are trading at premium valuations at the high-end of their high-growth peers, reflecting investor confidence in their mid-term runways for growth,” he said. “We view both valuations as justified, as their current growth trajectory/outlook place these retailers in a ‘class of their own’. Admittedly, elevated valuations come with elevated investor expectations to sustain their premium valuations.
“Conclusion: We maintain our positive recommendation upon GDI and Artizia as we approach the all-important holiday season for retail. Our channel checks support our view, that both are positioned to report outsized Q3 growth, that should lead to upward revisions to annual guidance and continue to warrant their premium valuations. Admittedly, we see more muted returns in 2026 with both having had material share price appreciation in 2025, a function of upward financial revisions and multiple expansion. At this time our top pick in our Consumer Discretionary universe is Gildan Activewear.”
=====
In a separate report, Mr. Morrison named Gildan Activewear Inc. (GIL-N, GIL-T) his “top pick” for 2026, believing its proposed acquisition of HanesBrands Inc. should “improve investor visibility upon an attractive EPS growth/FCF profile, predicated upon [its] low-cost manufacturing advantage.”
“The proposed combination of Gildan/HBI brings together the NA cost leadership of Gildan, with the NA retail brand leadership of HBI,” he said. “We expect modest revenue benefits from the transaction, but the key driver of our attractive EPS growth/strong FCF forecast, stem from the proposed cost synergies, namely consolidating HBI’s textile operations into Gildan/applying ‘best practices’.
“With Gildan successfully integrating facilities previously, we see upside to management’s $200-million synergy target. Improved visibility upon the combined strategy, market share gains, investor confidence in the EPS growth outlook, non-core asset sales, and strong FCF we view as emerging catalysts in 2026 that should lead to increased financial forecasts and multiple expansion.”
Mr. Morrison also argues investors “potentially misunderstand that Gildan learned a valuable lesson with its prior misstep (2015) in the Retail segment.”
“While low-cost is the predominant driver of Printwear sales, innovation, quality, and brand strength supported by advertising are prolific within the Retail channel,” he said. “Bringing its cost leadership to the NA innerwear brand leader we view as a winning combination. Investors may underappreciate Gildan’s ability to integrate HBI’s textile capacity. We estimate innerwear throughput is 3 pairs of briefs for each t-shirt equivalent. By 2027, Gildan should have capacity to combine HBI’s textile manufacturing into its existing operations with modest capital investment.
“Catalysts & Milestones To Watch: Catalysts include Gildan meeting 2025 financial targets, deal closure/detailed strategy, successful integration of HBI/realized synergies, non-core asset sales, NCIB restart.”
Mr. Morrison reaffirmed a “buy” rating and US$74 target for Gildan shares. The average on the Street is US$72.56.
=====
National Bank Financial analyst Rabi Nizami thinks Aura Minerals Inc. (AUGO-Q) “continues to exhibit discipline on operating costs and is tracking to meet 2025 guidance, with the outlook for production growth set to continue into 2026 as the newly-constructed Borborema mine is now ramping up well, and several other growth projects are under consideration.”
In late September, the South America-focused gold and copper miner voluntarily delisted from the Toronto Stock Exchange following the completion of a listing its on Nasdaq in July with the “intention to consolidate the trading in the U.S. equity market, which the company expects will improve its stock liquidity.” It said the decision was made, in part, due to “the ongoing fees and expenses associated with maintaining a TSX listing and the availability of an alternative market for the common shares.”
“We updated our model to incorporate Q3/25 financials, and made slight adjustments to Q4 2025 and 2026 based on management commentary on the conference call,” said Mr. Nizami. “Our full year production estimate now stands at 275 kGEO, which is within the guidance range of 266-300 kGEO. Nevertheless, our 2025 production estimate decreased slightly from the previous 284 kGEO, as we no longer include 11 kGEO of attributable production from the MSG mine for which the transaction is expected to close later in Q4/25. Similarly, removing MSG from our Q4/25 estimates lowered our consolidated AISC for FY2025 to US$1,427/oz, which represents the midpoint of guidance.
“With the newly-constructed Borborema mine now in commercial production, we lowered our discount rate on the asset to 5 per cent (from 7 per cent), which contributed to a 4-per-cent increase in our overall NAV to US$43.91/sh (was US$42.05/sh). Going forward, Aura’s mine building team will be looking for their next construction project to be sanctioned in 2026. We will look forward to results from several technical reports that are due to be released during Q4/25 for further insight: A feasibility study on the Era Dorada (Bluestone), technical reports on the Pé Quente and Pezão projects at Matupa, and studies on developing an underground addition to the Almas mine.”
Reaffirming his “outperform” rating for Aura shares, Mr. Nizami raised his target to US$48 from US$45. The average is US$42.20.
=====
In other analyst actions:
* After it revised its 2025 outlook higher and believing the 2026 consensus “appears to have room to move higher,” CIBC’s Tal Woolley upgraded Sienna Senior Living Inc. (SIA-T) to “outperformer” from “neutral” with a $23 target, rising from $20. The average target on the Street is $21.69.
“Taking into account the Q3 beat, the improved outlook, and still-to-close acquisitions, our 2025/26 operating FFO/sh forecasts rise 4 per cent/8 per cent, and our NAV follows suit, up 7 per cent,” he said. “Further upside to our 2026/27 forecasts does not seem out of reach: we are forecasting moderating SPNOI growth in 2027. If demographic demand continues to accelerate as SIA outlined on its conference call, that could prove conservative, and investors will likely see more upside over time.”
* JP Morgan’s Sebastiano Petti downgraded Telus Corp. (T-T) to “underweight” from “neutral” with a $19 target, down from $22 and below the $22.82 average.
* Scotia’s Himanshu Gupta cut his GO Residential REIT (GO.U-T) target to US$14 from US$16 with a “sector outperform” rating. The average is US$14.72.
“GO unit price is now down 30 per cent since its IPO in July’25,” he said. “What needs to happen to see a price rebound? #1. Market confidence in IPO forecasts: Q3 was pro-rated for two months. NOI was in line but FFO lower. We need two solid quarters (Q4/25 and Q1/26) to improve sentiment on the name. #2. Mamdani was elected NYC mayor (as expected). We need more transaction activity to see if Mayor elections led to cap rate expansion. We increased our NAV cap rate by 25bp to 5.25 per cent vs implied cap rate of 6.3 per cent.”
* Mr. Gupta raised his Flagship Communities REIT (MHC.U-T) target to US$23 from US$22 with a “sector outperform” rating. The average is US$23.33.
“Despite solid year-to-date outperformance, still Value. MHC is trading at 22-per-cent discount to Scotia NAV and 39-per-cent discount to IFRS NAV. MHC is trading at a 13 times 2026 estimated AFFO multiple vs. large U.S. peers at 20 times to 23 times and mid-size U.S. peer (UMH) at 15 times. We acknowledge that MHC leverage is higher and being small-cap, should trade at a relative discount to U.S. peers, but current valuation discount is wide enough,” he said.
* Canaccord Genuity’s Carey MacRury raised his Montage Gold Corp. (MAU-T) target by $1 to $9, keeping a “speculative buy” rating. The average is $9.21.
* Citi’s Scott Gruber trimmed his Ovintiv Inc. (OVV-N, OVV-T) target to US$52, below the US$53.82 average, from US$54 with a “buy” rating.
“On their 3q call, OVV executed on what many had anticipated – an acquisition to expand their position in the Montney, an intent to sell their Anadarko position and moving forward with a portfolio consisting of two core assets. The deal required OVV to pay a turn premium for NuVista relative to OVV’s valuation. However, the quality of the rock is accretive, asset duration matches the long runway on OVV’s current Montney position (using 930 wells), asset adjacency is robust (longer laterals not counted in synergies), and gas FT coverage is modestly higher than OVV (with good hedge coverage on top). While the market will need to wait on the timing of the Anadarko sale and value secured, the streamlining of the portfolio into two quality assets, including a superior inventory position to most SMID E&Ps, should lay the foundation for outperformance by the stock," said Mr. Gruber.