Inside the Market’s roundup of some of today’s key analyst actions
Strong equity markets are supporting assets under management and fees growth for Canadian life insurance companies, according to TD Cowen analyst Mario Mendonca, who expects “good” second-quarter results across the industry.
“We expect strong equity markets, improving insurance experience, and continued strength in Asian insurance sales to offset the impact of net outflows and support earnings growth in Q2/26,” he said. “We expect modestly higher net investment income (including earnings on surplus), driven by higher investment assets and surplus balances. Additionally, a lower share count (3-per-cent year-over-year decline across the group) supports adjusted EPS growth of 8 per cent and progress toward ROE targets.”
After outperforming its bank peers from 2022 through 2024 following by a down year in 2025, Mr. Mendonca expects “insurers to keep pace with bank performance in 2026, particularly if we have it right that SLF stages a recovery and capital markets revenue growth moderates.”
“So far, this view has played out, with year-to-date performance from the lifecos nearly identical to the Big Six,” he added. “This period of strong relative performance from the banks (the last 12 months) has moved the life insurance companies from trading at near parity to the banks on a forward P/E basis at the end of March 2025 to banks trading at an 18 per cent premium to the lifecos.”
“At this time, we are not making a call between the insurers and banks. We believe the strong momentum in bank earnings (stronger than the life companies) and lower credit cyclicality should support the recent step-up in bank multiples. However, in the context of risk, we highlight the downside to bank earnings associated with a) CUSMA-related uncertainty on commercial credit, b) downward normalization in trading revenues, and c) pressure on consumers from higher oil prices. We continue to believe that as (and if) investors shift to a risk-off posture, the insurers (particularly the P&C companies) will outperform the banks. Our top pick among the life insurance names is GWO, and in the banking space we favour BMO and RY.”
Mr. Mendonca raised his target for insurers in his coverage universe on Tuesday. His changes are:
* Great-West Lifeco Inc. (GWO-T, “buy”) to $98 from $80. The average target on the Street is $84.42.
Analyst: “Our focus for GWO will be on transformation expenses in Wealth to improve the rollover rate (should suppress Wealth inflows for 1-2 quarters).”
* IA Financial Corp. Inc. (IAG-T, “hold”) to $214 from $190. Average: $194.65.
Analyst: “For IAG, we will focus on sequential improvements in U.S. lapse experience following management actions related to an underperforming IMO.”
* Manulife Financial Corp. (MFC-T, “buy”) to $65 from $58. Average: $58.33.
Analyst: “Expect MFC to face questions about ALDA return assumptions (currently 9.0-9.5 per cent) as Q2/26 would be the 16th straight quarter of ALDA charges. That said, strong equity markets should drive non core equity market gains in excess of ALDA charges. Further reductions in long duration liabilities (e.g. LTC) would allow MFC to further reduce ALDA exposure.”
* Sun Life Financial Inc. (SLF-T, “buy”) to $121 from $107. Average: $106.79.
Analyst: “U.S. segment remains a challenge for SLF. While we expect that the repricing actions in recent quarters should be enough to support the Stop Loss business, we believe we could see continued (albeit much smaller) experience charges emerge this quarter. We do not expect good results in dental, as efforts to exit unprofitable Medicaid businesses should pressure the top line, while the commercial segment is too small for growth to move the needle.”
Jefferies analyst John Aiken thinks macroeconomic conditions should be a tailwind for Canadian lifecos for the second quarter, touting “strong” market conditions while warning “expectations are high.”
“Generally buoyant equity markets should benefit earnings in the quarter, although this could be partially offset by the higher yields in the U.S.,” he said. We suspect that an improved equity performance could benefit sales wealth sales levels, that saw structural weakness for most in the first quarter. We continue to believe that wealth will provide top and bottom line growth for the group."
In his quarterly earnings preview, Mr. Aiken said valuations across the industry are now reflecting “improving profitability.”
“Each of the Canadian lifecos are pursing different specific strategies, but each are attempting to structurally increase their respective ROEs by focusing on operations that are more capital light than traditional protection,” he said. “With each having shown a path to improvement, coupled with an improved macroeconomic outlook, investors have demonstrated increased confidence in their prospects. We agree with this assessment and, ahead of moving to 2027 as our valuation year, we have increased our target multiples for the group resulting in lifts to our target prices.”
His changes are:
* Great-West Lifeco Inc. (GWO-T, “buy”) to $107 from $84. The average target on the Street is $84.42.
Analyst: “Heading into reporting, our base earnings estimate is in-line with consensus for GWO. We anticipate that the momentum built up in Empower as well as its Capital and Risk Solutions (CRS) platform can be maintained in the second quarter.”
* Manulife Financial Corp. (MFC-T, “buy”) to $70 from $61. Average: $58.33.
Analyst: “We are slightly ahead of consensus on Manulife for the quarter as we anticipate continued strength in its wealth management operations. We anticipate that several of the headwinds that weakened the first quarter earnings will ease, providing a return to more normalized profitability in the second quarter.”
* Sun Life Financial Inc. (SLF-T, “buy”) to $131 from $115. Average: $106.79.
Analyst: “Heading into the second quarter reporting, our core earnings estimate for Sun Life is ahead of consensus. We anticipate that incremental improvements should provide additional lift to its U.S. platform while strong markets should continue to lift AUM.”
Stifel analysts Ralph Profiti and Cole McGill think global copper supplies are “becoming increasingly inelastic against a supply base that continues to be constrained by rising capital intensity.”
“According to S&P Global and BHP analysis, average mined copper grades are down approximately 40 per cent since 1991, LatAm brownfield capital intensity has risen 65 per cent since 2010, with a similar rise for greenfield since 2020,” they explained. “The greenfield incentive price is now more than$5.00/ lb (we share a similar view), and permitting routinely exceeds 10yrs and total development from discovery to first production takes over 20yrs. We estimate that to justify a 15-per-cent return on investment on our greenfield copper project database, the copper price needs to be approximately $5.05/lb after adjusting baseline PEA/PFS/FS and development assumptions with our risk-adjusted estimates for capital intensity, operating costs, sustaining costs and royalties & taxation.
“We increase our 2026 copper price forecast to $6.04/lb (up 3.5 per cent vs. previous $5.84/lb), our 2027/2028 (peak) to $6.25/lb (up 4.2 per cent vs. previous $6.00/lb), and our long-term copper price forecast to $5.00/lb (up 5.3 per cent vs. $4.75/lb).”
In a client report released Tuesday previewing quarterly earnings season, the analysts said copper miners appear to be “well positioned with a war chest much stronger vs. last peak capex cycle.”
“We believe the copper mining industry is entering a prosperity-phase where continuing supply disruptions to existing mines and a lack of adequate response to bring on new supply after 2028 see prices relative to current levels more likely to surprise to the upside, established industry participants react slowly to build new capacity relative to previous cycles, established mining districts face tougher regulatory hurdles and new entrants emerge during the early stages of a ‘company-making’ phase of the cycle,“ they said. ”In our view, the next cycle is likely to drive margin upgrades and encourage management and consensus to reconsider long-term commodity assumptions that are currently too low to justify a reasonable risk-adjusted return of 15 per cent. Not surprisingly, the war chest is stronger vs. last cycle peak, with the top 10 global copper miners sitting on $51-billion in cash at YE25 (up 24 per cent vs. previous capex peak in 2013) and forecast to rise to $70-billion by YE26, while $53-billiob of capex in 2026 is forecast at 33 per cent below previous capex peak."
With their new commodity price deck, the analysts made these target changes to stocks in their coverage universe:
- Capstone Copper Corp. (CS-T, “buy”) to $21 from $20. The average is $17.22.
- Ero Copper Corp. (ERO-T, “hold”) to $53 from $52. Average: $48.78.
- First Quantum Minerals Ltd. (FM-T, “buy”) to $55 from $52. Average: $48.52.
- Freeport-McMoRan Inc. (FCX-N, “buy”) to US$80 from US$76. Average: US$73.31.
- Hudbay Minerals Inc. (HBM-T, “buy”) to $43 from $41. Average: $43.52.
“Our preferred sector picks in Industrial Metals: ATEX, Cameco, Capstone, First Quantum, Freeport, IsoEnergy, NexGen, Trekor Metals, Western Copper & Gold,” they said.
While acknowledging second-quarter results for energy infrastructure companies are “likely to be mixed,” Scotia Capital analyst Robert Hope expects investors to “remain focused on the increasingly favourable medium-term backdrop.”
“Improving fundamentals across North American energy infrastructure, growing power demand from data centres and electrification, a more supportive regulatory environment, and an expanding project sanctioning cycle should outweigh what we view as a largely transitory quarterly earnings variability,” he said. “As a result, we believe management commentary on capital projects, backlog growth, and demand trends will be more important to share price performance than the quarter itself, supporting continued investor interest in the sector.
“Overall, we continue to favour gas-levered pipeline and midstream companies, followed by power names with exposure to tightening supply-demand fundamentals. Our overall favourite names are ALA-T, BIP-N, ENB-T, CPX-T, KEY-T, TA-T and TRP-T.”
In a client report released before the bell, Mr. Hope downgraded Pembina Pipeline Corp. (PPL-T) to “sector perform” from “sector outperform” after “a strong run in the shares,” seeing “fewer near-term catalysts and a more balanced risk/reward profile at current valuation levels.”
“Over the past year, Pembina has sanctioned approximately $6-billion of capital projects at attractive returns, while the long-term volume outlook across its asset base has improved and become more visible,” he said. “This has contributed to a significant improvement in investor sentiment, with the shares rising more than 40 per cent over the last 12 months. With fewer catalysts in the back half of the year, we see less room for multiple expansion beyond its recent trading level of 13.1 times EV/2028E EBITDA. While we acknowledge the market is increasingly recognizing growth from longer-dated projects such as Cedar LNG and Greenlight, PPL-T is now trading at the largest premium to its long-term average valuation within the pipeline and midstream peer group. As such, we move Pembina to Sector Perform.”
His target for Pembina shares rose to $73 from $69. The average is $69.83.
Mr. Hope’s other target adjustments are:
- AltaGas Ltd. (ALA-T, “sector outperform”) to $62 from $57. Average: $56.33.
- Atco Ltd. (ACO.X-T, “sector perform”) to $79 from $70. Average: $73.40.
- Canadian Utilities Ltd. (CU-T, “sector perform”) to $53 from $50. Average: $49.50.
- Emera Inc. (EMA-T, “sector outperform”) to $80 from $78. Average: $74.75.
- Enbridge Inc. (ENB-T, “sector outperform”) to $84 from $78. Average: $77.92.
- Gibson Energy Inc. (GEI-T, “sector perform”) to $31 from $29. Average: $30.86.
- Keyera Corp. (KEY-T, “sector outperform”) to $66 from $65. Average: $62.09.
- South Bow Corp. (SOBO-N/SOBO-T, “sector perform”) to US$39 from US$36. Average: US$33.91.
- TC Energy Corp. (TRP-T, “sector outperform”) to $105 from $97. Average: $96.43.
- Tidewater Midstream and Infrastructure Ltd.’s (TWM-T, “sector perform”) to $21 from $17. Average: $17.50.
National Bank Financial analyst Patrick Kenny thinks Tidewater Midstream and Infrastructure Ltd.’s (TWM-T) “irreplaceable assets underpin [its] free cash flow outlook,” leading him to raise his rating for its shares to “outperform” from “sector perform” previously.
“Despite rebounding almost 285 per cent year-to-date, TWM trades at just 4.5 times 2027 estimated EV/EBITDA (U.S. Refiners: 7.0 times),” he said in a client note titled Do call it a comeback!.
“Combined with 120-per-cent further unrisked upside to our valuation stemming from the $1.2-billion SAF project, filling whitespace at BRC, and Ram River restart, we are upgrading our rating to Outperform (was SP) ahead of TWM potentially cleaning up its corporate structure by rolling up the 35-per-cent public float of Tidewater Renewables (TSX: LCFS).”
Mr. Kenny’s move comes after hosting institutional meetings with the executive team from the Calgary-based midstream natural gas company, including CEO Jeremy Baines. He concluded Tidewater’s “balance sheet rehab [is] complete ... moving back to offence.”
“Since taking over the reins 2.5 years ago and prioritizing cost reductions, asset performance, and establishing a cash flow focused corporate structure, TWM’s leverage by year end is poised to land well within its 1.5x-2.5 times D/EBITDA target range, thanks in part to robust crack spreads,” he explained. “Therefore, management’s attention is shifting towards offence including the sanctioning of its $1.2-billion, 6,500 bpd Sustainable Aviation Fuel (SAF) project (more than $200-million EBITDA; ISD Q4/29), growing field gas throughput at BRC by 50 mmcf/d ($20-million EBITDA over two years), and restarting Ram River in H2/26 ($15-million EBITDA), together representing $30/sh unrisked valuation upside (approximately 120 per cent).”
Seeing “supportive renewable diesel fundamentals” and expecting its second-quarter results to exceed the Street’s forecast, Mr. Kenny hiked his target for Tidewater shares to $25 from $17. The average on the Street is $17.50.
Ahead of the release of second-quarter results from Canadian information technology services providers Alithya Group Inc. (ALYA-T) and CGI Inc. (GIB.A-T), Desjardins Securities analyst Jerome Dubreuil warns patience is required from an investing perspective as the industry recovers from a “negative” third-quarter 2026 release from “main bellwether” Accenture PLC (ACN-N) on June 18, which “contributed to continued pressure” across the sector.
“Over the past several weeks, we have not observed any meaningful change in the IT services demand environment based on our review of peer results and recent management commentary,” he added. “We continue to see companies struggle to accelerate their top-line growth in the near term while investors are still trying to assess what role AI has on this lack of acceleration. We have maintained Buy ratings as current valuations look compelling in the long term.”
With Accenture’s weaker outlook and increased uncertainty across the Middle East, Mr. Dubreuil lowered his near-term estimates and valuation multiples for both companies.
“On estimates, we believe our updated numbers better reflect the lack of meaningful improvement in
the industry that has been discussed recently by peers," he explained. “For our lower multiples, we believe earnings visibility is not what it used to be. We also anticipate AI will bring meaningful changes to the way the IT services industry operates. Nonetheless, we have maintained significant upside to current share prices as we anticipate IT services companies will continue to be relevant as trusted technology partners for corporations that need to accelerate digital transformation to fully leverage AI. Moreover, we believe (1) relative technology agnosticism; (2) context expertise; and (3) efficiency developed through the repeatability of implementations provide significant protection to the IT services business model.”
For Montreal-based CGI, Mr. Dubreuil trimmed his target for its shares to $117 from $147. The average on the Street is $123.73.
“Our top-line and adjusted EBIT forecast is 1 per cent below consensus for the quarter, which could be due to our expectation of sequentially lighter tailwinds from billable days, FX and M&A,” he said. “This, coupled with the fact that GIB trades at a higher P/E than ACN for the first time in 16 years, leads us to be cautious ahead of the quarter. Nonetheless, we expect an improvement in organic growth from negative 3 per cent last quarter to negative 2 per cent this quarter on expected improvement in the US federal vertical. On the call, we will hear from newly appointed CEO Tim Hurlebaus for the first time. We do not expect a major change
of tone, but we do expect more insight in relation to technical aspects of the business due to his profile.
His target for Alithya, his target slid to $1.55 from $1.75, which falls under the $2.17 average.
“We believe the top line will remain challenged for a few quarters, with the company continuing to cycle through lower-margin contracts. While this is likely a positive development for the long term, we expect continued pressure on near-term results,” he said.
National Bank Financial analyst Zachary Evershed is “looking forward to 2028-2033 demand spike” for Dexterra Group Inc. (DXT-T) with “the Nation Building thematic becoming more topical every day.”
“Spare capacity held by major providers (75-85 per cent of industry capacity) likely totals less than 11,000 beds currently vs. peak (?) demand of 10,500 in 2028-2033 provided all outlined projects proceed and remain on schedule,” he said. “DXT’s advantage in equipment quality and specification places them at the front of the line, likely maintaining 90-per-cent-plus utilization throughout, even if multiple projects are delayed or fall through. We estimate this translates to at least $15 million in incremental EBITDA, and likely more once pricing begins to climb on increasingly limited available supply.”
“Hyperscaler opportunities to remain capital-light. While Dexterra has recently won workforce accommodation business for a hyperscaler in Louisiana, and will likely announce another win in Texas in the coming months, it is important to note that DXT is unlikely to own this equipment. Thus, while the company’s exposure to this thematic growth vector remains exciting, it falls outside of this analysis.”
Mr. Evershed said his “firmer understanding of the towering tailwinds on the horizon” now reinforce Dexterra’s “track record for reliable execution,” leading him to reaffirm his “outperform” rating for its shares while raising his valuation multiple.
Acknowledging potential upside from Nation Building ha not yet been displayed in his model’s forecast window, he increased his target for the company’s shares to $20.50 from $16.50, exceeding the $18.25 average.
“Even after its 33.9-per-cent run year-to-date (vs. the S&P/TSX Composite Index up 10.2 per cent year-to-date), DXT trades at an attractive 9.4-per-cent FCF yield, too high for a company growing EBITDA by double digits annually, particularly given the resilience/defensive characteristics of the business. Dexterra remains our #2 pick for 2026,” he said.
In other analyst actions:
* Citing the threat posed by Meta Platforms Inc., Rothschild Redburn’s Dominic Ball downgraded Shopify Inc. (SHOP-Q, SHOP-T) to “neutral” from “buy” with a US$130 target, down from US$160. The average is US$158.30.
* Morgan Stanley’s Sean Diffley downgraded Telus Corp. (T-T) to “underweight” from “equal weight” and lowered his target to $13 from $20, falling under the $19.62 average.
““With a new CEO (Victor Dodig succeeded Darren Entwistle after a 26-year tenure) and competitive pressure limiting earnings growth while dividend commitments remain elevated, we see increasing risk that management ultimately prioritizes balance sheet flexibility over continued dividend growth with a yield more than 11 per cent and payout ratio more than 100 per cent, making a dividend cut a likely reality. While Telus has announced it is exploring the monetization of its Health business, ranging from a partial stake sale to a full divestiture, we have a hard time seeing it valued for greater than $3-billion, which would help leverage modestly (0.2-0.4 times), but still 3 times net debt to EBITDA,” je said.
Conversely, Mr. Diffley upgraded BCE Inc. (BCE-T) to “equal weight” from “underweight” with a $35 target, up from $31. The average is $37.03.
* Expecting improving production, cost and cash flow starting in the third quarter of 2026, Canaccord Genuity’s Dalton Baretto upgraded Ivanhoe Mines Ltd. (IVN-T) to “buy” from “hold” with a $13 target, up from $12. The average is $13.35.
“We have upgraded the stock to BUY based on our view that Q2/26 is a trough from a production perspective, and our view that the company could be acquired in the next 12 months,” said Mr. Baretto.
* TD Cowen’s Tim James bumped his Badger Infrastructure Solutions Ltd. (BDGI-T) target to $94 from $92 with a “buy” rating. The average is $94.99.
“We forecast strong revenue growth (up 14 per cent) and continued moderation in adj. EBITDA margin compression. We believe the outlook for long-term returns from recent initiatives aimed at sacrificing short-term margin in order to drive revenue growth should be a focus for investors. Our Q2/26 adj. EBITDA forecast is slightly above consensus due to margin. Badger reports July 30 after market close,” said Mr. James.
* Raymond James’ Stephen Boland raised his Goeasy Ltd. (GSY-T) target to $45 from $42, maintaining a “market perform” rating. The average is $36.08.
“We are revising our FY26 and FY27 estimates to reflect goeasy’s more granular portfolio disclosures. Following the material LendCare write-offs in 4Q25, the company began separately reporting net charge-off rates for the easyfinancial unsecured, easyfinancial secured and LendCare portfolios. While we were initially hesitant to recalibrate our model after a single quarter, we believe two quarters of disclosures have established an early trend. Relative to our prior estimates, we assume a larger ending loan portfolio and moderating LendCare charge-offs, increasing our FY27 EPS estimate to $1.96 from $1.72. Our FY27 BVPS estimate is lower as higher expected 2H26 losses more than offset the FY27 earnings improvement,” he said.