Inside the Market’s roundup of some of today’s key analyst actions
Citing the impact of the U.S. and Israel military strikes on Iran and “improving Canadian policy support,” equity analysts at TD Cowen raised their valuation assumptions for domestic energy infrastructure companies, seeing “a stronger production outlook emerging, supporting midstream growth opportunities and sustained valuation strength.”
“The U.S.-Israel strikes on Iran and ongoing disruptions at the Strait of Hormuz have elevated global energy security concerns,” said analyst Aaron MacNeil. “Even if tensions ease, supply reliability and jurisdictional stability have moved from secondary considerations to primary drivers of energy trade and investment decisions.
“Against that backdrop, Canada’s energy industry has taken on renewed strategic relevance. Canadian oil and gas supply offers long reserve lives, low decline rates, and scale that supports multi-decade planning. Canada is positioned to play a more visible role in global energy flows.”
In a report released before the bell titled Energy Opportunity Amid Global Conflict: Can Canada Meet the Moment?, the analysts caution this global opportunity now emerging for Canada “intersects with a more challenging domestic economic reality.”
“Canada’s GDP growth on a per-capita basis has lagged that of peers for much of the past decade, underscoring the limits of population-driven growth absent productivity and capital investment,” said Mr. MacNeil. “At the same time, Canada’s reliance on a single dominant trading partner has become a more meaningful constraint as trade frictions, tariff risk, and policy uncertainty with the U.S. complicate long-term planning. In this context, energy—Canada’s largest exporting sector—has re-emerged as a central lever for investment, growth, and economic relevance.
“This sets up the central question ... can Canada meet the moment? Specifically, can heightened geopolitical relevance and domestic economic necessity be translated into buildable, investable infrastructure outcomes in Canada that attract capital and support durable growth? The introduction of the Building Canada Act meaningfully shifts the policy backdrop for largescale energy infrastructure by improving regulatory sequencing and late-stage certainty. Combined with higher utilization across existing systems, renewed export relevance, and a more coordinated regulatory framework, Canada’s energy sector appears to be approaching an inflection point after a prolonged period of underinvestment and sub-trend growth. Not every project will qualify, and discipline remains essential, but for the right projects operating within a more supportive framework, the answer to whether Canada can meet the moment is increasingly ‘yes’, in our view.”
With that bullish view, Mr. MacNeil upgraded a pair of companies in his coverage universe:
* Gibson Energy Inc. (GEI-T) to “buy” from “hold” with a $32 target, up from $29. The average target on the Street is $29.72, according to LSEG data.
Analyst: “Consistent with our more constructive growth outlook for the Canadian energy infrastructure sector and our preference to own the indirect midstream beneficiaries of larger egress expansions, Gibson’s 7-per-cent infrastructure growth target is increasingly visible given the potential for rising crude throughput across its systems. At its crude oil logistics platform anchored in Hardisty, incremental volumes drive higher utilization and create recurring opportunities for optimization and debottlenecking across pipelines, terminals, and tankage. As flows increase through the core system, opportunities for selective brownfield expansions at Edmonton and Hardisty are likely to emerge.
“Attractive Relative Value: While sector valuations are elevated relative to history, Gibson remains toward the lower end of the peer group, trading at a 2027E multiple of 10.3 times vs. the peer average of 12.2 times. We believe this discount has partially stemmed from a lack of visibility to the growth outlook. As such, we see the potential to narrow the gap to its peers as opportunities materialize. We are not changing our estimates through 2030, reflecting the challenge in forecasting the timing and magnitude of growth, particularly with some opportunities longer dated. That said, we see a higher probability of upward revisions over time as volume growth and utilization exceed current assumptions, and are increasing our SOTP multiples to reflect this improving risk profile.”
* Pembina Pipeline Corp. (PPL-T) to “buy” from “hold” with a $75 target, up from $65 and above the $67.63 average.
Analyst: “Consistent with our more constructive growth outlook for the Canadian energy infrastructure sector and our preference to own indirect midstream beneficiaries, Pembina’s integrated system across condensate, NGLs and natural gas provides direct leverage to rising crude egress. This increases condensate demand and drives incremental NGL and gas volumes, supporting compounding throughput growth across pipelines, fractionation, storage and export infrastructure, without requiring exposure to large-scale greenfield megaproject risk.
“Stronger Production Outlook Than What is Embedded in Guidance: Our base case assumptions embedded in our Ahead of the Curve report points to a more robust growth outlook, with our bottom up forecasts calling for roughly 3.5-per-cent to 4-per-cent production growth through the decade, above management’s more conservative 2.5-per-cent to 3-per-cent volume assumptions expressed in its April 7, 2026 business update. As volumes build, we see a clear path to higher utilization and capital efficient expansion across Pembina’s footprint, primarily through brownfield expansions, debottlenecking and system optimization.”
The analysts also made these target revisions:
- Enbridge Inc. (ENB-T, “hold”) to $79 from $73. The average is $78.90.
- Keyera Corp. (KEY-T, “buy”) to $68 from $61. Average: $59.18.
- Rockpoint Gas Storage (RGSI-T, “buy”) to $35 from $32. Average: $31.33.
- South Bow Corp. (SOBO-T, “hold”) to $51 from $47. Average: $46.81.
- TC Energy Corp. (TRP-T, “hold”) to $98 from $90. Average: $92.39.
“We are increasing price targets across Canadian Energy Infrastructure, reflecting improved visibility into basin growth and a broader opportunity set. As outlined in our Ahead of the Curve report, incremental egress is increasingly supported by utilization, debottlenecking, and system optimization, reinforcing a more durable and capital-efficient growth outlook. We are also increasing valuation multiples across our coverage to reflect improved growth visibility, stronger utilization, and a more durable path to capital deployment, even if realized over a longer time horizon. Our upgrades of Gibson and Pembina align with this theme and better reflect our relative preferences despite elevated sector valuations.
“Hard to Model Timing, but Direction of Risk Is Improving: While the opportunity set is expanding, timing and magnitude remain difficult to forecast, particularly with some growth longer dated. We are not broadly changing out-year estimates, but the direction of risk has shifted positively as higher production and throughput support future earnings power.”
Beyond its still “strong” core operations, Whitecap Resources Inc. (WCP-T) is “increasingly hard for investors to overlook, given a shrinking universe of independent, scaled Montney liquids producers,” according to RBC Dominion Securities analyst Michael Harvey.
“The Veren combination transformed Whitecap into Canada’s fifth-largest producer, but it’s what’s happened since that point in time which deserves attention: record production and guidance upgrades funded within existing budgets,” he said. “In our minds continuing to execute in a drama-free manner should position WCP as a key mid-cap stock in the minds of investors.”
Following meetings with the Calgary-based company’s management team, including president Joseph Wong, Mr. Harvey said the company’s position in the Montney formation in British Columbia and Alberta “sets the stage” for gains, while “optimization” continues in the Duvernay oil play in central Alberta.
“Near-term growth will be driven primarily by the company’s Montney development program. Lator Phase 1 is expected to come online in Q4/26 with nameplate capacity of 35,000–40,000 barrels of oil equivalent per day (40–50-per-cent liquids). ... WCP’s total yield and liquids yield against Alberta Montney peers generally [paints] a favourable picture and reflecting a thoughtful, methodical development strategy. Elsewhere in the Montney the prospective Resthaven asset offers future gas optionality, underpinned by competitive economics in a higher ($3- $4 AECO) gas price environment.“
“WCP holds the largest Duvernay land position in the play, with approximately 500,000 acres within the core of Kaybob. The development opportunity is predominantly liquids-focused, with 86% of identified locations classified as oil or liquids-rich targets. Similar to the Montney, Whitecap’s results in the Duvernay are top quartile - particularly with liquids production in mind.”
Also touting the impact of its conventional division and balance street “strength,” Mr. Harvey raised his target for Whitecap shares to $20 from $18 with an “outperform” rating “on the expectation of multiple expansion as a result of continued operational outperformance.” The average is $18.45.
“WCP is Canada’s second-largest conventional light oil producer, with a land base exceeding 3mm acres and an inventory of over 5,800 locations,” he said. “The conventional division serves as a stable free cash flow engine, while recent multilateral well innovations are creating potential yield and inventory tailwinds that could position this segment as a meaningful contributor to future volume growth”
While AutoCanada Inc.’s (ACQ-T) first-quarter earnings exceeded expectations, RBC Dominion Securities analyst Sabahat Khan says he remains “on the sidelines in search of better visibility and an inflection in underlying results.”
“Amidst a soft operating backdrop,” the Edmonton-based company saw revenue and same-store sales fall 4.1 per cent and 4.3 per cent year-over-year, respectively, with new retail vehicle units sold down 17.9 per cent and used retail vehicles units sold down 1.1 per cent.
“The decline in volumes was attributable to elevated vehicle prices, affordability concerns, rising fuel costs and the tariff uncertainty,” he said. “GPU [gross profit per unit] remains pressured (gross margin percentage was down 175 basis points year-over-year to 14.6 per cent; Adj. EBITDA margin was negative 86 basis points to 2.6 per cent), largely due to used vehicle sales (-$48 GPU) as AutoCanada works through its aged inventory and the challenging macroeconomic/industry backdrop.
“Looking ahead, management pointed towards softness in early Q2 for the Canadian automotive market, with industry data indicating mid-single-digits year-over-year decline in volumes. However, March and April showed sequential improvement in used vehicle profitability trends (i.e., strong sales productivity and improved pricing and inventory). GPU is expected to remain compressed in H1/26 and normalization expected to begin in H2/26 (performance returning to ‘normal conditions’ is expected to take 9-12 months). On the used car side, management. expects used car GPU to inflect to $1,000/unit in H2. Operationally, AutoCanada pointed to early signs of operational stabilization, with improvements in vehicle sourcing and inventory management year-to-date (aided in part by leadership changes/addition of regional and functional leaders), which should help with used car GPU.”
Despite the presence of a “a somewhat more challenging operating backdrop,” Mr. Khan raised his target for AutoCanada shares to $23 from $18 despite reductions to his earnings projections through 2027, keeping a “sector perform” rating. The average target is $21.33.
“Our valuation multiple is below AutoCanada’s publicly traded Dealership peers. We believe our target multiple fairly reflects AutoCanada’s growth outlook and changes in its margin profile. Our price target supports our Sector Perform rating,” he explained.
Desjardins Securities analyst Brent Stadler thinks Capital Power Corp. (CPX-T) has the opportunity to roughly double its EBITDA by 2030, pointing to a “diverse set of highly accretive capital-light and capital-deployment opportunities.”
“These opportunities include: (1) U.S. gas M&A; (2) asymmetric upside from a tighter Alberta power market; (3) U.S. recontracting upside given strong demand and elevated cost of new entry; (4) PJM [power market] upside as we estimate that forwards are up 20 per cent from when CPX completed and hedged its PJM transaction; (5) near-term uprates, and expansion and repowering projects,” he said in a client report.
“In our base-case scenario ... we estimate CPX could generate $3.2-billion of EBITDA by 2030 (up 85 per cent from our $1.7-billion 2026 estimate), driving a four-year 17-per-cent EBITDA CAGR [compound annual growth rate] (2026–30), based on reasonable assumptions (not blue sky). This would imply that CPX is trading at a 6.7 times EV/EBITDA (our 2030 base case) forecast vs 10.0 times or 9.8 times on 2026E and 2027E. Locking the EBITDA multiple and adjusting for debt related to expected capital deployment opportunities would suggest that CPX could be worth $120/share in a few years."
In a client report released before the bell, Mr. Stadler said he sees several “positive developments” since the Edmonton-based company’s Investor Day event in early December of 2025.
They include: “(1) better clarity on near-term contracting in PJM, including existing generation, expansions and repowering projects; (2) M&A opportunities likely more robust as some capital is potentially sidelined; (3) we are more confident in the potential for data centres to tighten the Alberta power market; (4) PJM collar has been extended to 2030, providing better pricing visibility at elevated prices; and (5) CPX recontracted Arlington Valley at a 150-per-cent EBITDA lift.”
The analyst reaffirmed his “top pick” rating for Capital Power shares with a target of $82 per share. The current average is $84.07.
“We are highly confident in CPX’s ability to execute on M&A, we view Alberta as asymmetric upside, PJM has tightened and we expect continued upside from US recontracting,” he added. ”We believe investors should be confidently buying CPX ahead of continued execution.
In other analyst actions:
* Raising his fiscal 2026 and 2027 earnings expectations for Restaurant Brands International Inc. (QSR-N, QSR-T) on the benefits of an extended period of reinvestments as well as operational improvements and effective marketing, Guggenheim’s Gregory Francfort increased his target for its shares to US$85 from US$80 with a “buy” rating. The average is US$84.81.
* In a report titled Expectations Reset but Bar Seems Low; Defence Opportunity Still Early Days, Stifel’s Darryl Young trimmed his CAE Inc. (CAE-T) target to $47 from $50 with a “buy” rating. The average is $44.39.
“With the stock down 14 per cent on Friday, investors were clearly disappointed by the F2027 guidance and new F2030 targets that were 10-15 per cent below buy-side expectations,” said Mr. Young. “Additionally, some investors expressed unease around management’s comments on a potential return to M&A. No question this was a disappointing update but our sense is that the F2030 targets are conservative (management emphasized on the call that it was looking to break CAE’s history of over-promise/under-deliver). F2027 was always going to be a challenging transition year but the Middle East conflict is amplifying Civil segment headwinds. Positively, the defence business is performing well, with several ‘billion dollar opportunities’ that collectively are larger than the existing backlog. Big picture, we continue to like the medium-term structural tailwinds for Civil/Defence and would view the current sell-off as a clearing event. However, admittedly patience will be required as near-term results are unlikely to provide a catalyst.”