Inside the Market’s roundup of some of today’s key analyst actions
Touting “an attractive risk/reward setup,” Canaccord Genuity analyst Carey MacRury upgraded Allied Gold Corp. (AAUC-T) on Tuesday to a “buy” recommendation from “hold” previously.
In a client note released before the bell, he said he expects the agreement to be acquired by Zijin Gold International in a friendly, all-cash transaction for $44.00 per share, valuing the Toronto-based company, which operates mines in Mali and Côte d’Ivoire, at $5.5-billion, to close.
“If not, we see the value of Allied as exceeding $44/sh with the ramp up of Kurmuk on the horizon,” said Mr. MacRury. We see Allied’s valuation as attractive at 0.34 times NAV and trading at 2.2 times 2026 estimated EBITDA and 1.0 times 2027E EBITDA with Kurmuk at full capacity. If we were to zero out value for Mali (a highly unlikely event in our view), we estimate AAUC is trading at 0.47 times NAV, which we find as attractive."
His target for Allied shares remains $44, matching the average on the Street.
Following Monday’s announcement of an increase to its full-year production guidance and an expanded capital program for the second half of 2026, National Bank Financial analyst Dan Payne thinks Surge Energy Inc. (SGY-T) is “opportunistically expanding its annual capital investment and associated shareholder returns,” emphasizing “the strength in commodity prices and continued execution & momentum of its ongoing capital program.”
“Notably, prevailing and projected commodity prices are substantially ahead of its initial budget expectations (i.e., $80/bbl vs. $65/bbl), which supports the company in pursuing this targeted acceleration,” he said in a client note. “With that, the company is expanding its capital budget by 15-20 per cent ($25-million) to $175-million, which should generate 5-per-cent annualized growth (from flat prior; expanded exit to 24 mboe/d from prior 23 mboe/d) within the context of a 55-per-cent payout ratio (from 60 per cent prior), with an implied incremental FCF yield of 15 per cent (from 10 per cent prior).
“Importantly, the outcome of free cash to shareholder returns is notable, where that FCF yield is now explicitly being redirected to its 5-per-cent cash yield, with an incremental 3-4 per cent being returned through its strategic buyback ($5-million per month being returned), and the residual being redirected through continued deleveraging.”
Mr. Payne sees the Calgary-based company’s incremental investments supporting “the strength of its sustainable fundamentals, which paired with its expansive inventory (+900 locations, +12-year duration), serves to support the long-duration nature of free cash flow generation being validated within its portfolio.”
Maintaining his “outperform” rating for Surge shares, the analyst raised his target to $13.50 from $12.75 to reflect “the augmented pace of development and outcome of sustainable returns noted through its revised outlook.” The average target on the Street is $10.
Elsewhere, others making target adjustments include:
* ATB Cormark’s Amir Arif to $13 from $12 with an “outperform” rating.
“We continue to like the name for its 85-per-cent oil weighting and total return framework (production growth, dividends, and debt reduction) relative to its attractive valuation of 2.8 times 2027 strip EV/DACF. This valuation, along with a balance sheet that will have no net debt by mid-2027, suggests further upside ahead for this name. As a result, we are increasing our price target from $12.00 to $13.00. We expect the company to provide some additional details surrounding the capital plans along with results on its improved capex efficiencies and perhaps early results from its waterflood pilots next week at its planned Investor Update on June 10,” said Mr. Arif.
* Acumen Capital’s Trevor Reynolds to $13.75 from $13.25 with a “buy” rating.
“Overall, we believe updated guidance is more than achievable and highlight that our estimates were ahead of previous guidance,” said Mr. Reynolds. “Aside from increasing capex and production expectations we have increased our share buyback estimates based on the current run rate. Note that Q2 production is expected to see a drop off from Q1 based on shut-ins due to third-party facility work but will begin ramping up again in Q3 through to the end of 2026.”
“Overall, the outlook for SGY remains intact with a continued focus on operational performance and return of capital.”
* Canaccord Genuity’s Mike Mueller to $13 from $12 with a “buy” rating.
“With the 4-per-cent increase to its exit-rate guidance, SGY will enter 2027 in a strong position to either continue accelerating drilling or maximize FCF prior to breakup, contingent on commodity prices,” said Mr. Mueller.
* Raymond James’ Luke Davis to $13 from $12 with an “outperform” rating.
“Surge continues to screen as one of the least expensive stocks in our coverage, despite having a balance sheet, asset quality, and return of capital framework that compare favourably to peers. We currently peg the company’s FCF yield at 16 per cent/15 per cent in 2026E/27E as amongst the best in its class and would reiterate that the company’s largely unhedged 2027 production profile stands to benefit significantly should prices remain elevated, driving the potential for relatively asymmetrical upside,” said Mr. Davis.
Following a $100-million, nearly 50-per-cent increase to its 2026 capital program, “in response to strong operational results and a supportive commodity outlook.” Raymond James analyst Luke Davis thinks Obsidian Energy Ltd.’s (OBE-T) “prudent allocation warrants credit with roughly two-thirds of the increase allocated to the light oil division and the balance allocated to waterflood initiatives in Dawson/Nampa and new exploration opportunities across its growing undeveloped acreage, namely in Pekisko.”
“While retaining the ability to trim capital, should prices deteriorate, Obsidian is now on track for 15-per-cent production growth in 2027 with essentially all incremental barrels slated to come onstream early next year,” he noted.
After the bell on Monday, the Calgary-based company increased its 2026 capital budget to $300–$325-million, from $190–$230-million, while keeping production guidance unchanged at 27,900–29,900 barrels of oil equivalent per day.
“The company also added longer-dated growth optionality, having acquired more than 150 sections of prospective land over the past two years, including 100 sections in Peace River,” said Mr. Davis. “As a result, Obsidian now holds roughly 830 sections of Peace River land underpinned by stacked multi-zone development where the team continues to delineate its resource. Most notably, the increased capital program adds $10 million to test two prospective areas in 2H26, including the Pekisko play where an offsetting well posted average IP30 rates of 490 bbl/d. While this is not factored into our estimates, we believe the expanded land base gives management more running room for long-term development at the same time it converts its core Clearwater producing assets to waterflood.
The analyst updated his estimates for Obsidian in order to “reflect the timing difference between the capital spend and production impact highlighted in management’s updated guidance.”
“Despite a relatively unchanged outlook near-term, we now model a 15-per-cent increase in production volumes in 2027E which we expect to drive $350-million of cash flow,” he said. “Altogether, we expect this near-term use of cash to fuel a more sustainable business on the back-end, with our 2028E FCF estimates increasing by 15 per cent, despite running a higher capital program.”
That led to an increase to his target for the company’s shares to $20 from $19 with an “outperform” rating (unchanged). The average is $18.33.
Desjardins Securities analyst Frederic Tremblay sees Denver-based York Space Systems Inc.’s (YSS-N) announcement of the acquisition of Solestial highlighting “the strategic importance of space-grade solar power,” which he thinks is “a positive readthrough” for 5N Plus Inc.-owned (VNP-T) AZUR Space.
Accordingly, he emphasized the pending SpaceX IPO is not the only development “catching [his] attention.”
pace stocks offer skyrocketing returns – even before that one big IPO
“York emphasized supply chain resilience amid rising power needs, reinforcing our confidence in AZUR as a proven leader in high-efficiency multi-junction solar cells for space applications,” he said.
“Supply remains tight and concentrated among a limited set of providers. III-V cells (produced by AZUR and peers) remain the preferred choice (90-per-cent share) for highperformance missions requiring efficiency and reliability. Peers SolAero (Rocket Lab) and Spectrolab (Boeing) are vertically integrated, which may limit their availability to third parties. By contrast, AZUR’s independent model is a differentiator, positioning it as a preferred supplier for satellite OEMs. Overall, market capacity for space solar cells is constrained, with lead times exceeding two years, which reflects the limited number of scaled manufacturers and disciplined capacity expansion tied to backlog (avoiding overcapacity). Combined with demand for space solar cells expected to grow at a 10– 12-per-cent CAGR (increases in satellite deployments, onboard power requirements, as well as commercial and defence activity), we envision a favourable pricing environment."
Mr. Tremblay thinks investor interest in SpaceX has “contributed to valuation expansion across the broader space ecosystem.”
“That said, valuations in the space sector have been volatile, with performance increasingly driven by event-based catalysts (eg SpaceX IPO developments, Blue Origin incidents). While some of the thematic enthusiasm around space investing may moderate over time, we do not view AZUR (or, more broadly, VNP) as a purely sentiment-driven or speculative story,” he added. “Rather ... the investment case is underpinned by durable secular tailwinds, as well as strong visibility via bookings and backlog. Accordingly, our valuation framework continues to reward VNP as visibility improves on the company’s strategic positioning within critical supply chains (eg space solar power, terrestrial solar power, health and pharma) and on the multi-year growth trajectory of its Specialty Semiconductors segment. This is particularly evident in space solar power (supported by AZUR’s capacity expansion initiatives) and in terrestrial renewable energy (via contracted volumes with First Solar across 2025– 26 and 2027–28)."
Reiterating a “buy” rating for Montreal-based 5N Plus, Mr. Tremblay raised his target to $50 from $43. The average is $38.
“Despite valuation volatility, we do not view VNP as a purely sentiment-driven story. Our valuation framework continues to reward VNP for visibility improvements on its strategic role within critical supply chains, particularly in space solar power (AZUR’s expansion) and in terrestrial renewable energy (First Solar contracts). Our target increase to $50 is based on 24 times EV/EBITDA on our 2027E EBITDA (was 21x), supported by: (1) York-Solestial readthroughs; and (2) valuation benchmarks across space and nonspace equities,” he explained.
Citi analyst Joanne Wuensch sees Bausch + Lomb Corp.’s (BLCO-N, BLCO-T) “seeing its pipeline strategy play out across the entire portfolio, investing in high-unmet-need areas where there is either no available treatments or where management can change the treatment paradigm.”
She met with the Vaughn, Ont.-based company’s management as part of its R&D Teach-In Series, which focuses on innovation in its Vision Care franchise, with discussions focused on two of the company’s “most innovative technologies” in contact lenses - its bioactive Project Halo lens material and novel myopia management lenses.
“Project Halo represents the first substantial disruption in contact lens material science since the introduction of silicon hydrogel (SiHy) in 1999,” she explained. “Management has designed this bioactive lens material ‘from the inside out with the user in mind,’ aiming to address key challenges like discomfort and end-of-day dryness, which contribute to the current 20-25-per-cent drop-out rate of new contact lens users (within the first year). Project Halo is a daily lens fundamentally different than hydrogel and SiHy lenses, using hyaluronic acid (HA) as the ‘backbone’ of the lens material; Halo is “bioactive” as the HA is recognized and released by a naturally occurring enzyme, providing continuous hydration throughout the day. The material also provides oxygen permeability (or breathability) on par with leading daily SiHy lenses on the market. Management also highlighted Halo’s soft and smooth surface, which cushions the interaction between the eye, eyelid, and lens, plus reduces friction. It has conducted its first external performance study and plans to initiate its second study in the 2H26. Assuming positive results, management then plans to initiate its registrational study in 2027 to support FDA approval in 2028.
“Growing the pie, with a bigger slice. With Halo, management’s goal is to both grow the size of the contact lens market globally and take greater market share. Halo’s differentiated material should advance this goal in three ways by: 1) reducing the new wearer drop-out rate; 2) bringing in new wearers to the market; and 3) re-engaging patients who ‘silently’ dropped out of the category and are looking to get back in. Management does not anticipate Halo will cannibalize the daily SiHy market immediately considering there remains substantial unmet need globally. Halo will be produced on existing low-cost manufacturing lines, minimizing capital investment and driving higher gross margins immediately. This should give management ‘flexibility’ around striking a balance between pricing and adoption, emphasizing that it wants to make Halo a ‘lens for everybody.’”
Mr. Wuensch says Bausch’s myopia management lens “leans on recent scientific breakthroughs in myopia progression to provide a differentiated offering focused on customizing and titrating treatment for individual needs.”
She reaffirmed a “buy” rating and US$19 target for the company’s NYSE-listed shares. the average is US$18.67.
When Transcontinental Inc. (TCL.A-T) releases its second-quarter financial report on Wednesday, RBC Dominion Securities analyst Ryland Conrad expects results to be weighed down by difficult year-over-year comparisons.
He’s projecting consolidated revenues and EBITDA of $280-million and $43-million, respectively, down 59.1 per cent and 60.2 per cent from the same period a year ago due largely to the late 2025 sale of its Packaging business to ProAmpac Holdings Inc.
“We expect year-over-year performance in Q2/26 to primarily reflect a tough year-over-year comparable (particularly in book printing) with management indicating with Q1/26 results the expectation of lower adjusted EBITDA year-over-year prior to improved performance in H2/26,” said Mr. Conrad.
“We believe the key issues in focus this quarter include: (i) the outlook for in-store marketing (ISM) including the integration/contribution from recent tuck-in acquisitions (Middleton, Canva, PDI) and the potential for additional M&A; (ii) an update on the potential financial impact from the national expansion of raddar; (iii) the extent to which business development initiatives could benefit book printing; and (iv) any changes to the current F2026 outlook, which includes modest negative organic revenue growth and stable adjusted EBITDA (proforma the sale of Packaging).”
Moving forward, the analyst sees “returning to growth remains the primary catalyst for the stock.”
“Following the sale of Packaging, the focus has shifted to the extent to which the remaining asset mix (Retail Services and Printing, Media/ Educational Publishing) can return to sustained positive revenue and EBITDA growth, which in our view, remains the primary potential re- rating catalyst for the stock,” Mr. Conrad explained. “For F2026, management expects organic revenue growth to be slightly negative year-over-year with EBITDA largely stable. While the timing of any inflection point on growth remains unclear to us, we would not rule out F2027 reflecting the likelihood of additional growth-accretive tuck-in acquisitions within In-Store Marketing (ISM), the potential absence of Canada Post strike impacts, the realization of corporate cost reductions following the sale of Packaging, and other pockets of growth (raddar, Media, book printing). In the meantime, we expect investors to continue to benefit from ongoing capital returns (dividends, share repurchases) building upon what have been two special dividends amounting to $21/share paid over the F2024-F2026 period (including a reduction of stated capital).”
He reiterated an “outperform” rating and $9 target for Transcontinental shares. The average is $10.71.
In other analyst actions:
* Canaccord Genuity’s Phil Ker trimmed his Luca Mining Corp. (LUCA-X) to $3.80 from $4.40 with a “speculative buy” rating. The average is $3.58.
“After reflecting on Luca’s recent operating results, we have made key adjustments to our model, which resulted in a negative impact on our NAV. Despite the target decrease, we continue to see upside being unlocked through the drill bit, while our investment thesis continues to hinge on the anticipation of an upgraded mill at Campo Morado, which we foresee supporting increased recovery rates, resulting in higher precious metal production and cash flow,” said Mr. Ker.
* ATB Cormark’s David McFadgen raised his target for shares of Magellan Aerospace Corp. (MAL-T) to $46 from $31 with an “outperform” rating. The average is $30.50.
“We continue to like MAL given the very favourable outlook for both its commercial and defence segments,” he said. “The commercial side is largely driven by Boeing and Airbus.
“The defence side continues to see strong demand as countries increase defence spending to eventually reach 5 per cent of GDP by 2035. We believe MAL will benefit from Canada’s Defence Industrial Strategy, and it will be awarded some large contracts sometime in 2026 that will likely impact 2027 and beyond. We believe the defence is likely to post higher growth.”
* Raymond James’ Daniel Magder cut his Ucore Rare Metals Inc. (UCU-X) target to $14.75 from $15, keeping an “outperform” rating. The average is $12.
“Ucore Rare Metals Inc. is focused on establishing a domestic supply chain for rare earth elements essential to EVs, renewable energy, and defense applications. The company’s flagship asset is the Louisiana Strategic Metals Complex (LSMC), a rare earth separation facility designed to support North American supply chain independence. Ucore has also recently announced its first planned Canadian plant in Kingston, ON, to be built coincidentally with the LSMC. While still pre-revenue, the company is well positioned to be a leader in the North American rare earths sector, in our view. We reaffirm our Outperform rating and reduce our target price to $14.75/sh (prior $15.00/sh) due to refreshed modeling assumptions,” said Mr. Magder.