Inside the Market’s roundup of some of today’s key analyst actions
Scotia Capital analyst Mike Rizvanovic expects higher valuation multiples for large Canadian banks are “here to stay, justified by the group’s strong fundamentals, which are driving a higher ROE.”
In a report released before the bell, he pointed to “long-term structural improvements related to: (1) a much stronger regulatory capital base; (2) far superior credit underwriting; and, (3) a growing Capital Markets business that provides a countercyclical revenue boost in times of heightened volatility.”
“While we have been surprised by the magnitude of the improvement in the banks’ valuation multiples over the past year, which currently sit at record levels, we firmly believe that a new narrative has quickly formed on the group’s earnings stability and lower downside risk through credit cycles, which has brought in growing interest from foreign investors, and supports P/E multiples well in excess of historical levels,” said Mr. Rizvanovic. “With that said, we anticipate modest total return upside for the banks over the next year (mid-single-digit range) based on our revised price targets that value the group using an average P/E multiple of 15.2 times.”
The analyst made these target adjustments:
- Bank of Montreal (BMO-T, “sector outperform”) to $239 from $234. The average on the Street is $227.78, according to LSEG data.
- Canadian Imperial Bank of Commerce (CM-T, “sector perform”) to $157 from $155. Average: $163.69.
- National Bank of Canada (NA-T, “sector outperform”) to $222 from $214. Average: $205.94.
- Royal Bank of Canada (RY-T, “sector outperform”) to $280 from $275. Average: $281.15.
- Toronto-Dominion Bank (TD-T, “sector outperform”) to $169 from $164. Average: $157.19.
“The two potential risks that we believe could partially reverse the group’s re-rating are (1) a meaningful credit downturn, which is not our base case scenario as the trajectory of PCLs appears very manageable, backed by solid balance sheet reserves; and (2) a material deceleration in market-sensitive businesses, which have been a key driver of the consistent EPS beats that have been reported over the past couple of years, although the near-term outlook for both Capital Markets and Wealth Management remains generally constructive,” he added.
Citing “further valuation upside from unsanctioned growth potential,” National Bank Financial analyst Patrick Kenny upgraded Keyera Corp. (KEY-T) to an “outperform” from “sector perform” previously in response to Monday’s release of its latest business upgrade and 2029 growth outlook following the completion of its $5.3-billion acquisition of Plains All American Pipeline’s Canadian natural gas liquids (NGL) business
“Coupled with a constructive macro backdrop, [we] would add to a core position below KEY’s long-term average trading multiple of 11.8 times EV/EBITDA,” he said.
In a client report released before the bell titled Integrating AND accelerating, Mr. Kenny emphasized the Calgary-based midstream energy company has now provided a 7-8-per-cent fee-based growth visibility from 2027 to 2029 and 2025 to 2027 fee-based adj. EBITDA per share growth of almost 35 per cent (a 16-per-cent compound annual growth rare and topping Mr. Kenny’s previous 17-per-cent projection).
“Following this pro forma step-change, KEY is setting the bar for fee-based adj. EBITDA per share CAGR from 2027 to 2029 at 7-8 per cent (NBCCM estimate: 7 per cent; was 3 per cent), reflecting the filling of whitespace across KAPS and North Region gas plants, but excluding unsanctioned organic growth potential,” he noted. “On the Marketing front, 2026 realized margin contributions are expected to come in at $360-$390-million (NBCCM: $375-million; was $435-million) with 90 per cent of 2026 frac spread margins locked in (50 per cent for 2027).
“With growing NGL supply and customer demand across the Montney/Duvernay, KEY is evaluating further debottleneck opportunities at Simonette, targeting more than 350 mmcf/d (ISD: 2028), and Wapiti, enabling growth beyond 300 mmcf/d, while also evaluating a new gas processing plant in the Gold Creek region. Overall, 2026 estimated growth capex guidance of $550-$625-million (NBCCM: $580-million) includes the $750-million KFS II Debottleneck, on track for completion by the end of June, the $490-million KFS III expansion (ISD: mid-2028), the $220-million (net) KAPS Zone 4 connection (ISD: mid-2027) and the recently sanctioned $240-million ACE Rail Terminal (ISD: mid-2028). Elsewhere, KEY expects to submit its response to the Competition Tribunal on June 17th.”
Pointing to “upsizing near-term synergies,” Mr. Kenny raised his financial forecast for Keyera to reflect higher utilization across its KAPS and North Region gas plants as well as the recently sanctioned ACE Rail Terminal in Fort Saskatchewan, Alta., and the expectation for higher annualized synergies. His 2027 adjusted funds from operations per share estimate is now $4.41, up from $4.25.
Those changes led him to increase his target for Keyera shares to $61 from $56 after “incorporating the fee-based CAGR guidance through 2029, the ACE Rail Terminal investment and higher run-rate synergies.” The average target on the Street is $60.33.
Elsewhere, other analysts making revisions include:
* CIBC’s Robert Catellier to $65 from $63 with an “outperformer” rating.
“KEY’s business update reinforces our constructive view on the Plains acquisition, with the pro forma outlook providing improved visibility into peer-leading fee-based growth and capital-efficient opportunities. The update reduces near-term earnings volatility through more robust hedging, while KEY simultaneously achieves meaningful synergy capture,” said Mr. Catellier.
* RBC’s Maurice Choy to $62 from $60 with an “outperform” rating.
“While there were several puts and takes, we believe the Strategic Growth Outlook themes favourably matched the market’s expectations, notably the 7-8% fee-based EBITDA/share CAGR, the ability for Keyera to outperform this growth rate, and the maintenance of the company’s capital allocation framework. Admittedly, the Competition Tribunal process remains topical among investors; however, we sense that its near-term and yet-to-be-announced synergies are sufficiently robust across many reasonable outcomes from the process. With a favourable relative stock valuation, a competitive growth rate, and upside potential, Keyera remains one of our best Canadian Energy Infrastructure stock ideas,” said Mr. Choy.
* Raymond James’ Michael Barth to $66 from $67 with an “outperform” rating.
“Following KEY’s business update and strategic growth outlook we revise our near-term estimates lower (primarily in Marketing), although our 2029/2030 estimates are largely unchanged. Our target does decline modestly to $66/share, but includes no new unsanctioned projects or additional synergy upside from the PAA acquisition, both of which we see a clear path to materializing over the next 12-24 months. KEY remains one of our favorite stocks in the peer group given what we view as an attractive valuation with some of the highest growth in the group and the strongest balance sheet,” said Mr. Barth.
* ATB Cormark’s Nate Heywood to $58 from $55 with a “sector perform” rating.
“With Management’s guidance, continued confidence in synergy realization and filling of white space, we are raising estimates higher,” said Mr. Heywood.
Ventum Capital Markets analyst Robin Kozar thinks Atlas Salt Inc. (SALT-X) is “an under-the-radar name deserving attention” with “plenty of upside” present.
“The stock has already increased 50 per cent since we initiated coverage earlier this year, and we expect the stock price to double from here over the next 12 months as the story gains traction,” he said. “For patient investors, comparable multiples and take-out valuations point to more than 700-per-cent share price upside.”
“We had SALT marketing in Montreal recently and investors certainly took notice. The Company is uniquely positioned in an unknown but very attractive end market with inelastic demand, no correlation to economic cycles, and structural undersupply. The GAS project is technically simple, clean, and shovel-ready. The result is a clear path to strong margins and decades of significant free cash flow.”
Resuming coverage following the close of the St. George’s, N.L.-based company’s upsized $15-million equity offering, Mr. Kozar sees a financing package for its Great Atlantic Salt (GAS) project as the “next big milestone.”
“GAS is a construction-ready project with an updated Feasibility Study completed in September 2025,” he said. “Detailed engineering and early-works construction will be supported by the recent financing. Capex for GAS is estimated at $600-million, and the next key catalyst and milestone will be the completion of a debt financing package targeted for Q4/26. SALT already has two LOIs in place with export development agencies and an equipment financing agreement with Sandvik.”
“We have updated our model to reflect the equity financing as well as Q1/26 results. Our NAV8-per-cent estimate declines slightly from $5.23 to $4.83 per share. Our price target, which is calculated using a 0.5 times multiple on our NAV estimate for the Great Atlantic Salt project and a 1.0 times multiple on our NAV for corporate adjustments, remains unchanged at $2.50. We view our valuation methodology as conservative.”
Mr. Kozar, currently the lone analyst covering Atlas, kept a “buy” rating and $2.50 target for its shares.
Calling Greenfire Resources Ltd. (GFR-T) a “proven single-asset SAGD producer with underutilized infrastructure positioned for pad-driven growth under new leadership,” TD Cowen analyst Menno Hulshof initiated coverage with a “buy” recommendation on Tuesday.
“Strong balance sheet and large tax pools support long-term FCF growth, while [Waterous Energy Fund’s] 72-per-cent stake brings strategic alignment and industry expertise,” he added. “Brownfield expansion and consolidation offer further upside. Current valuation reflects execution risk, creating attractive risk/ reward if ops improve.”
Mr. Hulshof said the Calgary-based company, which focuses on its assets at the Hangingstone Facilities south of Fort McMurray, possesses pure-play steam-assisted gravity drainage (SAGD) exposure with a long operating history, but he emphasized “the key question is whether new leadership can restore performance to historical levels.”
“With production well below capacity, the set-up is lower-risk, pad-driven growth with operating leverage,” he said. “At approximately 4.4 times 2027 estimated EV/DACF [enterprise value to debt-adjusted cash flow] and a 8.0-per-cent FCF yield (total capex, incl. growth wedge; TD Cowen deck), we think valuation reflects a degree of execution skepticism.
“Execution-driven upside: GFR must deliver on Pads 7, 5 SE and 8 to drive a recovery in prod’n and CF through 2027–2028. As new pads offset declines, the asset should move toward fuller utilization of 75 mbbl/d steam capacity, lowering unit costs and driving FCF growth. With largely fixed costs, modest gains in uptime and SOR should support margin expansion. Spare infrastructure enables capital-efficient growth, with upside from a brownfield expansion and consolidation optionality. Despite a 2026 FCF draw, the balance sheet remains supportive, with low leverage, liquidity and tax pools deferring cash taxes through 2032."
Believing its “valuation gap likely reflects execution credibility,” he set a target of $10, exceeding the $9.50 average.
“A strong balance sheet, liquidity, and tax pools limit near-term funding pressure,” he concluded. “However, single-asset exposure heightens execution risk, while growth capex (including a potential brownfield expansion) could delay returns, alongside heavy diff exposure and WEF control. We see a re-rating path tied to strong execution.”
RBC Capital Markets analyst Logan Reich thinks catalysts for shares of A&W Food Services of Canada Inc. (AW-T) “remain somewhat limited given a challenging macro backdrop and relatively low trading volume, which constrains the addressable shareholder base.”
“That said, the company’s new standalone store concept lowers construction costs by $500k and could enable faster unit growth over time,” he added.
In a client report released Tuesday, Mr. Reich said the Canadian macro backdrop for fast food operators “appears to be less favorable than in the U.S. as near-zero population growth, unemployment, inflation, and consumer sentiment are all headwinds.”
“Recall, on the Q1 call, management specifically called out eastern provinces as those that had experienced the most acute decline in consumer confidence,” he said. “As visibility into an improving consumer backdrop remains limited, the company is leaning into value and menu innovation (smash burger) to better compete for transactions. On value, the company continues to take a market specific approach given uneven macro pressures. To the degree those pressures spread, we think the company could expand their value offerings.
“Franchisee sentiment and new unit demand. Franchisee sentiment sounded stable, where we didn’t detect any indication of a change in the development pipeline in our recent conversation with management. Lowering the cost of the new build format remains a strategic priority for the company, and the company’s new freestanding store concept lowers the cost to build by $500k, which is significant to franchisee return on investment and could encourage incremental store development.”
Mr. Reich reiterated his $40 target, which matches the average on the Street, with a “sector perform” rating for A&W shares.
“W is a solid #2 player in the Canadian burger QSR space,” he said. “The brand is nationally recognized by consumers and has a large whitespace to continue growing units in the low-single-digits with potential upside over time from Petro Canada development, potentially improving franchisee paybacks, and Pret which is in its early stages of growth. That said, while the company has idiosyncratic SSS drivers (primarily loyalty program), the broader industry backdrop remains uncertain given ongoing geopolitical crosswinds and pressured consumer budgets limiting an improvement in discretionary spending. The company has solid EBITDA margins in the high-20-per-cents to low-30-per-cents and 95-per-cent-plus FCF conversion, which we think is largely well-appreciated by investors.”
Stifel analyst Ryan Walker expects the re-rating of shares of Mako Mining Corp. (MKO-X) to continue amid “production growth and jurisdictional diversification.”
He initiated coverage of Vancouver-based company, which operates the San Albino gold mine in Nueva Segovia, Nicaragua and owns two assets in the U.S, with a “speculative buy” rating on Tuesday.
“We conservatively forecast MKO’s gold production more than quadrupling to 173koz Au in 2030 from 41koz during 2025,” said Mr. Walker. “At the same time, we forecast consolidated All-in Sustaining Costs (AISC) declining by 23 per cent to US$1,449/oz sold (net of byproduct Ag), reflecting increased contribution from the larger-scale and potentially lower-cost production from the Moss and Mt Hamilton heap-leach mines, and largely saprolite-sourced (no blasting anticipated and carbon-in leach Au recovery) production from early mining at Eagle Mountain.
“While MKO shares have enjoyed significant year-to-date appreciation (up 33.5 per cent) — outpacing both the VanEck Gold Miners ETF (GDX: down 6.7 per cent) and VanEck Junior Gold Miners ETF (GDXJ: down 8.4 per cent), we contend that further rerating should accompany successful delivery of the company’s aggressive growth profile to become a multi-mine producer. We believe such potential re-rate should be further bolstered by the jurisdictional diversification represented by the ramp-up of the U.S.-based Moss and Mt Hamilton Au-Ag mines and subsequent development of the Eagle Mountain mine in Guyana."
Pointing to its “growth via internal cash flow,” Mr. Walker sees a “multi-mine operator in the MAKO-ing.”
“Plans call for cash on hand plus existing and expected cash flow from the producing San Albino and Moss mines to fund ongoing development of the fully permitted (Plan of Operations, with a final reclamation bonding increase yet outstanding) Mt Hamilton Au-Ag constructionstage project in Nevada (construction ongoing) and subsequent development of the PEA-stage Eagle Mountain Au project in Guyana,” he said. “Based on our metal price assumptions, we forecast that the planned funding route should be more than sufficient to meet such capital needs with our modelling indicating a health cash balance throughout the build-out process.
“Mako currently trades at a 0.30-times multiple to our NAV estimate, representing a 40-per-cent discount to the peer junior producer comparables in our coverage universe at 0.54 times. Indeed, MKO currently trades at a discount to the average P/NAV of our precious metal exploration and development coverage universe names, which currently sees an average of 0.43 times.... MKO’s rank among the bottom on a P/NAV basis while ranking well in terms of the other metrics based on our modelling.”
Currently the lone analyst covering the stock, he set a target of $20 per share.
In other analyst actions:
* Citing its valuation following a recent pullback and applauding its track record of value creation in international exploration and production, Roth/MKM’s Jamie Somerville upgraded Gran Tierra Energy Inc. (GTE-T) to “buy” from “neutral” with a $14.50 target, which falls below the $16.36 average.
* ATB Cormark’s Nicolas Dion increased his Montage Gold Corp. (MAU-T) to $19 from $18 with an “outperform” rating, while SCP Equity Research’s moved his target to $19 from $18 with a “buy” rating. The average is $19.30.
“Montage provided an update on satellite targets across the Koné property, adding 874,000 oz of higher-grade resource since the March 2026 update. The overall Koné resource now stands at 8.3 MMoz, and we see a path toward 10 MMoz through ongoing exploration/expansion drilling. First gold at Koné is still expected in late Q4/26, and we see further catalysts from additional updates including on Didievi and an updated Koné mine plan at the end of this year,” said Mr. Dion.