Inside the Market’s roundup of some of today’s key analyst actions
Desjardins Securities analyst Doug Young is expecting the second quarter to be “decent” for Canadian banks, forecasting average 20-per-cent year-over-year growth in cash earnings and a 10-per-cent gain in adjusted pre-tax, pre-provision earnings.
“For the most part, we aren’t expecting any big surprises,” he said in a client report titled Oh my God, we’re back again... previewing earnings season, which is set to begin on May 27.
“That said, there’s a good chance the capital markets divisions will outperform expectations, while the build in performing loan ACLs could also be higher than anticipated. But these are tough to model. With that said, the focus will be on the 2H FY26 outlook, which given geopolitical and macro events seems a little more uncertain. We remain overweight Canadian banks.”
Mr. Young said he expects “strong” results from Canadian banking and wealth management, and predicts capital markets could “be a source of upside surprise.”
“We forecast an average PCL rate of 45 basis points (down 12 bps year-over-year),” he added. “Lower performing loan provisions is the big driver of the year-over-year decline. We expect impaired PCL rate to remain stable. Geopolitical tensions, rising oil price and CUSMA renegotiations add uncertainty to the credit outlook.
“We expect higher NIMs vs last year, modest loan growth, and good expense management to support results this quarter. On the latter, we expect the group to deliver positive operating leverage for the 9th consecutive quarter.”
Mr. Young maintained his pecking order of “buy”-rated names:
- Canadian Imperial Bank of Commerce (CM-T) with a $160 target, up from $152. The average on the Street is $145.57, according to LSEG data.
- Toronto-Dominion Bank (TD-T) with a $154 target, up from $145. Average: $142.70.
- Royal Bank of Canada (RY-T) with a $262 target, up from $250. Average: $253.46.
- National Bank of Canada (NA-T) with a $215 target, up from $200. Average: $191.18.
In the small-cap space, he continues to favour EQB Inc. (EQB-T) with a $132 target, up from $130. The average is $120.50.
His other target changes are:
- Bank of Montreal (BMO-T, “hold”) to $212 from $208. Average: $208.75.
- Bank of Nova Scotia (BNS-T, “hold”) to $108 from $107. Average: $108.
Meanwhile, TD Cowen analyst Mario Mendonca expects “good” PTPP earnings growth from Canada’s banks “supported by NII growth (year-over-year NIM gains remain good but down 2 basis points quarter-over-quarter), strong fee income (WM particularly) & positive operating leverage.
“Other than lumpy credit results in commercial and weaker consumer credit, we expect credit to be uneventful,” he added. “Strong fundamentals (NIM, fees, capital markets, buybacks) continue to support elevated multiple.”
In a client report released Tuesday titled Strong Fundamentals Support Elevated Valuations, he argued banks are “approaching full value.”
“The ERP at 4.2 per cent is below average (6.6 per cent),” he said. “We believe a low ERP given the uncertainty with the direction of Canada’s economy supports a cautious outlook on the sector. However, fundamentals remain strong, and until that changes, we believe elevated multiples can be sustained.”
Mr. Mendonca made these target adjustments:
- Bank of Montreal (BMO-T, “buy”) to $234from $219. Average: $208.75.
- Bank of Nova Scotia (BNS-T, “hold”) to $112 from $111. Average: $108.
- Canadian Imperial Bank of Commerce (CM-T, “buy”) to $166 from $153. Average: $145.57.
- National Bank of Canada (NA-T, “hold”) to $202 from $182. Average: $191.18.
- Royal Bank of Canada (RY-T, “buy”) to $267 from $259. Average: $253.46.
"Our top picks are BMO & RY. Among our coverage, we favour those with large capital markets operations in the U.S. (BMO, RY); greater exposure to U.S. lending (BMO) and a strong ROE progression story (BMO, potentially CM)," he said.
With shares of Dollarama Inc. (DOL-T) sitting near a 52-week low, Stifel analyst Martin Landry sees ”an appealing entry point in our view" for investors, prompting him to raise his rating for the discount retailer to “buy” from “hold” previously.
“We are changing our recommendation to BUY for the following reasons: (1) Valuation has receded from the highs of 39 times forward earnings in January 2026 and now at 29.5 times, stands below the 2-year average of 33 times. (2) Dollarama is likely to gain market share under a potential scenario of significant inflation in the coming year stemming from the conflict in Iran. In order to stretch their dollars further Canadians are likely to shop more at Dollarama. (3) Recent insider buying is reassuring,” he explained. “Both the CFO and CEO recently purchased shares at $174 and $175, respectively, higher levels than currently. Hence, with a more reasonable valuation and potential for Dollarama to gain market share due to inflationary pressures, we change our rating to BUY.”
In a client note released before the bell, Mr. Landry attributed the recent decline in the Montreal-based company’s shares to concerns about “a lower comparable sales growth than expected in Canada combined with concerns on the transformation of the Australian business which is taking more time than expected due to regulatory hurdles.”
“What will move Dollarama’s shares higher? We expect significant disruption and inflation in the global supply chain due to the war in Iran,” he added. “Inflation is bound to accelerate in Canada this fall putting pressure on the discretionary spending power of Canadians. This may lead to value seeking behavior which could favor Dollarama and lead to further market share gains. We also believe that Q1/26 comparable sales growth should accelerate sequentially, which could reassure investors that the 1.5-per-cent comparable sales growth in Q4FY26 was an anomaly.”
“No better retailer to weather the storm. We believe management has an excellent control over Dollarama’s EBITDA margin and this was displayed post COVID. The rebound in consumer demand post COVID created a supply chain shock and significant volatility in the earnings of most companies. However, Dollarama’s EBITDA margin was under control and increased at a pace of 50-100 basis points per year from 2022 to 2024.”
Mr. Landry raised his target for Dollarama shares by $10 to $190. The average on the Street is $205.
“Given the prolonged conflict in Iran and the potential repercussions to the global and Canadian economies, we believe investors will turn to defensive retailers such as Dollarama. Dollarama offers investors (1) stability in profit margins during times of volatility, (2) potential market share gains in Canada and LATAM, (3) strong growth prospects internationally, (4) a healthy balance sheet and (5) a pristine track record,” he said. “This combo puts Dollarama in a select class that deserves a premium valuation multiple.”
Calling it a “lagging performer at a positive inflection in fundamentals,” TD Cowen analyst Aaron MacNeil upgraded Pason Systems Inc. (PSI-T) to “buy” from “hold” previously.
“Our Energy Services coverage is at a positive inflection point amid strong commodity prices, although many stocks have already re-rated,” he said. “However, Pason has lagged despite its many positive attributes, including its high barriers to entry, strong operating leverage, low sustaining CapEx commitments, low debt and attractive yield.”
Pointing to “an improvement in its fundamental outlook,” Mr. MacNeil’s revision comes ahead of the release of the company’s first-quarter results on Thursday.
“Since May 2025, Pason’s stock has increased 24 per cent, materially lagging the peer average of 133 per cent,” he said. “In this context, the premium that Pason has traded at historically relative to its peers has collapsed, with the company’s NTM EV/EBITDA valuation expanding 1.7 times over the past year compared to the peer average of 2.4 times over the same time period. We believe that a relative premium for Pason is warranted given the company’s high barriers to entry, strong operating leverage, low sustaining capital spending commitments, no debt, and attractive yield. As such, with a potential improvement in the outlook, we believe Pason represents a strong buying opportunity for investors at this time.
“We have seen a more constructive outlook from many D&C-exposed Energy Services companies so far in the Q1/26 reporting period, driven primarily by incremental spending from smaller, private E&P’s, but now also including select larger public producers like Diamondback, which has said it would raise oil output immediately due to high prices. Pason will be a direct beneficiary from rising U.S. activity levels, both through its strong incumbency for its core EDR product, and perhaps more meaningfully through IWS, given strong indications that completions activity for Drilled but Uncompleted wells will increase.”
Mr. MacNeil hiked his target for the Calgary-based company’s shares to $18 from $13. The average is $15.
TD Cowen analyst Michael Tupholme sees Russel Metals Inc. (RUS-T) poised to benefit from “favourable” demand and pricing, while he warns inclement weather has been a headwind thus far in 2026, leading him to make a modest reduction to his first-quarter earnings expectation.
“Overall, we are encouraged by solid demand in most key end-markets and continued steel price gains; both to benefit RUS over coming quarters,” he said in a client note previewing Tuesday’s post-market release. “We also like RUS’ margin improve. opportunity and strong balance sheet, and see the stock’s valuation as attractive.”
For the quarter, he’s now projecting revenue of $1.354-billion, a rise of 15.4 per cent year-over-year but narrowly under the consensus estimate of $1.38-billion. He is now expecting earnings per share of 75 cents, up 20 cents from the same period a year ago and 2 cents under the Street.
“At the TD Cowen Distinctive Industrials & Infrastructure Services Conference (Mar. 24), management characterized Service Centers demand as solid overall,” said Mr. Tupholme. “While January was softer due to weather-related disruptions, February and March were described as very strong. U.S. demand continued to outperform Canada. Notably, management noted robust demand in Alberta, and continued strength in end-markets such as data centers.
Touting a “robust pricing environment,” the analyst added: “During Q1/26, the U.S. Midwest HRC price was up 12 per cent, while the U.S. Midwest plate price was up 13 per cent. Further, encouragingly, benchmark steel prices have continued to trend higher, with HRC up 9 per cent since RUS reported Q4/25 results on February 11 and up 15 per cent year-to-date. Meanwhile, plate is up 16 per cent since mid-February and up 19 per cent year-to-date.”
Maintaining his “buy” rating for Russel shares, Mr. Tupholme increased his target to a Street-high of $63 from $57. The average is $53.51.
“We view RUS’ valuation as attractive. Meanwhile, we believe RUS offers various other compelling investment attributes, including a strong balance sheet, value-added processing-related margin improvement potential over time, margin-enhancement opportunities in connection with the Kloeckner and Samuel acquisitions, and additional upside potential associated with possible future acquisitions,” he said.
In a separate client report, Mr. Tupholme also lowered his first-quarter estimates for Stella-Jones Inc. (SJ-T) ahead of its release before the bell on Wednesday, citing “tempered” margin expectation that he thinks were “optimistic” given the seasonally slower period.
“We remain upbeat on SJ’s Utility Poles growth outlook (largest segment; key driver to the story) given favourable T&D investment backdrop,” he added. “We like SJ’s mix of growth potential and defensive attributes, and see its valuation as attractive.”
He’s now projecting revenue for the period of $821-million, up 6.2 per cent year-over-year and above the consensus expectation of $811-million. He sees earnings per share of $1.21, a jump of 30 cents from the same period in fiscal 2025 and a penny above the Street’s forecast.
“We are upbeat on the growth outlook for Utility Poles,” said Mr. Tupholme. “We forecast overall Q1/26 Utility Poles revenue growth of 13.5 per cent year-over-tear, including 6.0-per-cent organic growth, largely volume-driven. We expect volumes to benefit from new contractual commitments secured in 2023/2024, as well as increased purchase activity from certain customers that began in Q3/25 (momentum seen carrying into 2026). On pricing, we do not see meaningful downside risk. On the Q4/25 conference call, SJ noted that full-year 2025 spot pricing was 7-10 per cent below contracted levels, while Q4/25 pricing was relatively stable, as softer spot pricing was largely offset by higher contract pricing. For full-year 2026, we forecast overall Utility Poles revenue growth of 11.7 per cent, including 6.6-per-cent organic growth.
“Railway ties competitive concerns likely driver to recent pullback; expect flat 2026 organic revenue. SJ has traded down since reporting Q4/25 results in late-February; appears to reflect in part investor concerns around more aggressive competitor behavior in the Railway Ties business. Recall, SJ previously flagged heightened competitive pressures (and timing-related factors) in Q4/25, when Ties organic growth was down 16 per cent year-over-year. In spite of industry headwinds, SJ last quarter called for 2026 organic revenue growth to be flat year-over-year, and reaffirmed its three-year Ties organic growth outlook of low-single digits annually (we forecast flat Ties organic growth for Q1/26 and FY2026). For context, note that the Ties segment is 21 per cent of total SJ revenue.”
With his “buy” rating, the analyst moved his Street-high target for Stella-Jones shares to $106 from $107. The average is $96.75.
“We continue to view SJ as a high-quality company that offers investors a mix of growth potential and defensive characteristics, and we see the stock’s valuation as appealing,” he concluded.
Scotia Capital analyst Jonathan Goldman thinks a “lag” in the performance of Wajax Corp.’s (WJX-T) Product Support and Industrial Products segments is “dampening operating momentum.”
He lowered his full-year earnings per share expectation for the Toronto-based diversified industrial products and services provider by 6 per cent following the release of its first-quarter results after the bell on Monday. The release saw a 10-per-cent miss on EBITDA, driven by lower sales and margins, and a 10-per-cent year-over-year in revenue with drops seen in all product lines except Engineered repair services (ERS).
Adjusted earnings per share came in at 65 cents, down 2 cents from the same quarter a year ago and missing both Mr. Goldman’s 83-cent estimate and the consensus projection of 76 cents.
"We think investors might look through the new Equipment miss since the company was lapping two large mining shovel deliveries last year, which we had correctly in our model ($40-million headwind)," said Mr. Goldman. “That said, Product Support down 7 per cent year-over-year (Scotia estimate down 5 per cent/consensus down 4 per cent) due to lower mining revenue in Western Canada; and Industrial Parts down 5 per cent year-over-year (Scotia estimate up 3 per cent/consensus 2 per cent) due to softer market conditions in Eastern and Central, both missed.
“While PS was lapping a tough comp, growth has been anemic, remaining effectively flat since 2023; IP is down over the same period. Lower PS/IP mix impacted gross margins while lower sales impacted operating leverage with normalized SG&A rate of 15.2 per cent up 70 basis points year-over-year. There were a couple of green shoots: (1) SG&A (excluding unrealized gains) of $76.4-million was down $4-million year-over-year, further distinguishing Wajax as one of the better cost-out stories in our universe; and (2) strong FCF generation on the back of lower w/c accelerated deleveraging with net debt to EBITDA excluding leases now back to the low-end of the target range of 1.5 times to 2 times.”
Maintaining his “sector perform” rating for Wajax shares, Mr. Goldman trimmed his target to $37 from $38. The average is currently $35.75.
“WJX trades at 9 times P/E on our 2027E, well below peers: 10-times discount to FTT (2 times historicals) and 16-times discount to TIH (1.5 times historicals),” he said. “That said, WJX did not have the same backlog build as peers (effectively flat quarter-over-quarter) and we believe a reacceleration of PS/IP growth and/or M&A are prerequisites for a re-rate. On the latter, it could be a few quarters until new CEO George McClean gets a lay of the land.”
RBC Dominion Securities analyst Sabahat Khan thinks RB Global Inc. (RBA-N, RBA-T) just logged “another quarter of progress” that “reflecting a fifth consecutive quarter of share gains for IAA, strong underlying cost control, and continued M&A activity, all of which we view positively.”
“That said, our investor discussions indicate that AI-related concerns have weighed on the shares recently, which we believe is unjustified given RBA’s business model/competitive positioning/moat,” he added. “At a 2026 estimated P/E of 22.8 times, we continue to see compelling value in the shares.”
After the bell on Monday, the Illinois-based company, which is legally domiciled in Canada, reported total gross transaction value increased 13 per cent year over year to US$4.341-billion with revenue rising 11 per cent to US$1.235-billion. Both exceeded Mr. Khan’s projections ($4.012-billion and US$1.125-billion, respectively. Adjusted earnings per share of US$1.01 was 5 US cents under his estimate but a penny above the Street’s forecast.
“Guidance calls for: 1) GTV growth of 6-9 per cent (vs. 5-8 per cent previously), which notably reflects the expectation of continued share gains in automotive + CC&T and excludes recent M&A activity; 2) Adj. EBITDA of $1.485-1.545-billion (vs. $1.470-1.530-billion prev.); 3) tax rate of 23-25 per cent (unchanged); and, 4) capex of $350-400-million (unchanged; vs. $370-million in 2025),” said the analyst. “Notably, fuel headwinds are built into the guide (i.e., reflecting the recent run in oil prices). Further, while RBA is experiencing some disruption with market alliance partners and international buyers due to Middle East concerns, mgmt. reiterated its confidence in being able to manage the company’s ultimate exposure.”
Maintaining his “outperform” rating for RB Global’s NYSE-listed shares, Mr. Khan raised his target to US$150 from US$146. The average is US$124.
“Over the last decade, Ritchie Bros. has undertaken a strategic shift toward becoming a multi-channel, full-service marketplace for customers looking to buy, sell, and manage their used equipment (as compared to its historical positioning as purely an auctioneer). To support this evolution, the company has leveraged investments in its technology platforms and undertaken a number of tuck-in acquisitions. Further, the evolution of the legacy business combined with the opportunity ahead for IAA provides a favorable setup for investors over the medium-to-long term, in our view,” he said.
Elsewhere, BMO’s John Gibson raised his target to US$135 from US$130 with an “outperform” rating.
“Overall, market share wins in its auto segment should drive growth in a market lacking CAT-events. We also believe the strong CC&T [commercial construction & transportation] print is indicative of a turning point in heavy equipment sales,” he said.
In other analyst actions:
* Stifel’s Daryl Young reduced his Boyd Group Services Inc. (BYD-T) target to $255 from $265 with a “buy” rating. The average is $255.42.
“Q1 is traditionally a weaker margin quartergiven accounting accruals to start the year,” said Mr. Young. “Additionally, financials will be a bit messy thisyear given the full integration of Joe Hudson (closed January 9th). In terms of the industryfundamentals, Q1 has been well-telegraphed to be a slower start to the year given the impactsof inclement weather in the Southern U.S., which kept motorists off the road. Management hasset expectations for 2-per-cent SSSG in Q1/26 (Stifel: 2.2 per cent), but the key focus will be around theoutlook and run-rate performance in March/April. Read-throughs from suppliers (see here) pointto optimism for a normalization of industry conditions in 2026, with macro data continuing tolook constructive (strong used car prices, +VMT, and declining insurance rates). Following several false starts, estimates and expectations appear better aligned for the stock tofinally begin compounding once again.”
* Raymond James’ Stephen Boland reduced his Goeasy Ltd. (GSY-T) target to $46.50 from $50 with a “market perform” rating, The average is $39.87.
“We are lowering our estimates for GSY as we enter 1Q26 reporting. Following further discussions with management, we are moving our 2026 estimates closer to the full-year guidance provided with the 4Q25 results. We caution investors that there are considerable unknowns around the pace of portfolio movements and the gradual improvement in charge-offs,” said Mr. Boland.
* Following a first-quarter miss, National Bank’s Ahmed Abdullah lowered his target for Richards Group Inc. (RIC-T) to $41 from $42 with an “outperform” rating, while Canaccord Genuity’s Luke Hannan cut his target to $39 from $42 with a “buy” rating. The average is $40.33.
“RIC expects Healthcare to continue driving growth through a combination of acquisitions and organic initiatives, while Packaging is likely to remain under pressure due to ongoing macroeconomic challenges,” said Mr. Abdullah.
* ATB Cormark’s Gavin Fairweather reduced his target for Thinkific Labs Inc. (THNC-T) to $2.50 from $3 with a “sector perform” rating, while BMO’s Thanos Moschopoulos cut his target to $2 with a “market perform” rating. The average is $2.17.
“While Q1/26 results met the guide and were not a ‘surprise’, revenue has flatlined given the upmarket shift (Plus growth offsetting modest Self-Serve declines) and EBITDA is now at a loss given accelerating R&D investment. The Q2 guide points to a stable to modestly down revenue while the burn will remain consistent. Given the R&D acceleration, it appears some added costs we thought were temporary will stick longer than previously expected, taking our C26 EBITDA expectations lower. As we await the more AI development and a turn in financials, we maintain our Sector Perform rating while our target moves to $2.50,” he said.
* Mr. Fairweather raised his Kneat.com Inc. (KSI-T) target to $7 from $6 with an “outperform” rating. The average is $5.63.
“Last week, we attended Kneat’s user conference in Dublin. We attended customer-led sessions and interacted with most clients, partners, and many Kneat employees (senior management, AEs, product leaders). Most customers are actively expanding to new plants and processes which de-risk growth forecasts. On product, there was more buy-in on the data-centric model, which expands the runway for growth in the base and positions Kneat well for AI,” he explained.
* National Bank’s Jaeme Gloyn increased his target for TMX Group Ltd. (X-T) by $1 to $64, keeping a “sector perform” rating, while TD’s Graham Ryding also increased his target to $64 from $63 with a “buy” rating. The average is $61.80.
“This is a strong quarter from TMX, but also one with a couple of nitpicks,” said Mr. Gloyn. “TMX delivered a healthy 12-per-cent beat on strong revenue growth from key drivers: GSIA [Global Solutions, Insights and Analytics] up 13 per cent (with Datalinx up 19 per cent), Derivatives (with 28 per cent growth from the MX), Equity & FI Trading up 19 per cent, and a robust Capital Formation segment up 28 per cent (with Corporate Solutions up 16 per cent). Organic revenue growth of 14 per cent exceeded flat organic expense growth driving significant operating leverage. The nitpick is that organic revenue growth of Trayport and VettaFi slowed in Q1-26, with Trayport posting a second sequential quarter of sub-10-per-cent organic growth. Trading at 23 times consensus 2026 EPS, we see TMX as balanced risk-reward.”