Inside the Market’s roundup of some of today’s key analyst actions
Ventum Financial analyst Rob Goff thinks headwinds facing Alithya Group Inc.’s (ALYA-T) legacy Canadian business “overshadow repositioning for the future,” leading him to lower his rating for the its shares to “neutral” from “buy” previously.
“We are encouraged by Alithya’s repositioning towards higher value, growth markets. Strong relationships with Microsoft, Oracle and more recently Salesforce bring future value for the Company,” he explained. “Unfortunately, ongoing pressures in legacy Canadian business with Government and Financial Services contracts continue to weigh down margins and lead to disappointments. The longer sales cycles in the US compounded the legacy headwinds.”
“While the current F2027 EV/EBITDA at 5.9 times and FCF yield at 28-per-cent limit downside, we believe the shares are likely to be held back pending visibility of improved revenue momentum and/or positive outcomes from the strategic review. While positive evidence of the above would likely move the shares ahead, we submit the risk/return profile at that point would likely improve.”
On Aug. 13, the Montreal-based digital strategy and technologies company reported first-quarter fiscal 2027 revenues of $105.1-million, down 15.4 per cent year-over-year and below both Mr. Goff’s $113.9-millon estimate and the consensus projection of $114.7-million due to “project maturities and lower billable hours, primarily from government and banking clients within Industry Services & Solutions.” Adjusted EBITDA of $5.4-million also missed expecations ($9.4-million and $9.9-million, respectively).
“Heightened competitive pressure on the Canadian business has overshadowed the Company’s success in building its high-value U.S. business,” added Mr. Goff. “The Company announced that it has officially undertaken a strategic review as it believes the undervaluation of its shares restricts its ability to add shareholder value through acquisitions. We expect the market to cautiously discount the prospects of the Company’s inclusion of sale or privatization amongst its stated potential outcomes, where the range of outcomes includes taking on strategic investments or partnerships or a recapitalization.
“The Canadian declines over the past two years with the completion of a large contract and the Company’s decision to walk away from unduly competitive situations have led to disappointing overall results and overshadowed U.S. gains. While we see a return to growth with stabilization in Canada and growing scale in the U.S., a fuller revaluation of the shares will likely await positive YoY gains in financials, except for takeover or privatization considerations. We do see the shares as attractive where the F27 FCF yield of 28-per-cent limits downside and in the event of a takeover or privatization offers upside.”
After reducing his full-year fiscal 2027 revenue and earnings expectations, Mr. Goff cut his target for Alithya shares to $1.35 from $2. The average target on the Street is $1.53.
“Our one-year target DCF valuation of $1.79/shr reflects a discount rate of 17.50 per cent and a terminal EV/EBITDA multiple of 5.75 times, which equates to a perpetual growth rate of 9.8 per cent and a terminal FCF multiple of 14.3 times,” he said. “Our terminal value multiple of 5.75 times EV/EBITDA is quite conservative, where it implies a discount to public market peer valuations, while the discount rate is at a level that merits Private Equity (PE) interest in the name.The steep discount reflected in our $1.35 PT against the DCF valuation of $1.79 reflects both our view that a positive revaluation awaits stronger revenue momentum and our view that the shares offer prospectively aggressive returns.”
National Bank Financial analyst Alex Terentiew thinks Luca Mining Corp.’s (LUCA-X) second-quarter results were “consistent with 2026 being a transition year” for the Mexico-focused company.
“Development at Tahuehueto and optimization work at both mines weighed on earnings but should support higher-grade feed and improved recoveries over the coming quarters,” he said. “Tahuehueto costs drove the EBITDA miss, while lower recoveries at both operations limited the benefit of strong throughput at Tahuehueto and higher precious metal grades at Campo Morado. Our investment thesis remains intact, with the 2026 mine investment and exploration programs supporting an improving operating profile into 2027.”
On Monday, Vancouver-based Luca reported adjusted EBITDA for the quarter of US$14.3-million, falling below Mr. Terentiew’s US$18.8-million estimate due largely to higher-than-anticipated costs at its Tahuehueto underground gold and silver mine project in Durango State, Mexico. The results follow a production update on July 20 which exceeded expectations.
“Higher-grade underground feed remains the key to improving Tahuehueto’s margins,” the analyst said. “Contractor ramp-up and equipment availability constrained underground ore extraction and haulage, requiring the mill to supplement underground feed with lower-grade surface stockpile material despite strong throughput. Recoveries were also lower across all metals, further weighing on margins. We expect grades, recoveries and unit costs to improve as contractor performance improves, higher-grade stopes are accessed and long-hole mining ramps up.
“Campo Morado recoveries remain the key operational focus. Despite improved precious metal grades, recoveries declined across all metals, with gold recovery falling to 18.9 per cent from 26.2 per cent year-over-year, as the mill processed feed from multiple mining areas. We expect ongoing feed-blending, reagent and flotation optimization to improve recovery consistency, with the expansion study and updated mine plan remaining key year-end catalysts.
While seeing Luca’s valuation remaining “compelling,” Mr. Terentiew trimmed his target for its shares by 10 cents to $2.40 after increasing his long-term costs estimates to reflect additional global inflation pressures. The average on the Street is $2.83.
He maintained an “outperform” rating.
Following “good” second-quarter results, RBC Dominion Securities analyst Sabahat Khan is anticipating “more progress to come” from AutoCanada Inc. (ACQ-T).
“ACQ reported Q2 Revenue/Adj. EBITDA above consensus, with SSS [same-store sales] of 5.5 per cent year-over-year on higher new/used vehicle sales,” he explained. “The outlook calls for GPUs to remain weak through Q3 (as ACQ works through older inventory), with normalization in Q4 and into 2027. We expect Q1/27 onward to reflect more normalized trends, assuming the inventory is right-sized by calendar year-end.”
After the bell on Aug. 12, the Edmonton-based multi-location automobile dealership group reported revenue from continuing operations of $1.418-billion, topping the Street’s expectation by 12 per cent ($1.268-billion) as volumes increased 10 per cent year over year and pricing per unit gained 3 per cent. Diluted earnings per share of 46 cents was below the consensus estimate of 65 cents.
“Management noted improvement in new cars through the quarter with June reflecting market share gains ‘for the first time in a long time’,” said Mr. Khan. “The increase in used vehicle units sold was driven by early progress in sales productivity, winter buying program, and was partially offset by softness in the used car market due to affordability concerns. On profitability, [gross margins percentage] was down 224 basis points year-over-year to 14.6 per cent and Adj. EBITDA margin was down 113 basis points to 3.7 per cemt, as pressures continue on vehicle margins. Used car GPUs inflected sequentially to up $587 (vs. down $48 in Q1), but remain under pressure as the company works through aged inventory and the challenging macroeconomic/industry backdrop. Looking ahead, similar trends are likely in Q3 as the company works through longer-dated cars, with potential for more normalized front-end GPUs expected in Q4 and into 2027.”
While he reduced his earnings forecast through 2027, Mr. Khan raised his target for AutoCanada shares by $1 to $24 with a “sector perform” rating. The average is $23.06.
“Uncertain macro backdrop likely to weigh on results in the near-term: With the auto retail industry sensitive to macroeconomic conditions, we believe that periods of economic uncertainty could result in some demand softness (e.g., driven by factors such as trade/tariff policy changes, inflationary pressures/elevated interest rates, or lower consumer confidence). In turn, a more challenging operating environment is likely to weigh on auto dealers’ profitability. As new vehicle demand softens, new/used vehicle prices could decline (or alternatively, incentives/ promotions could increase), which we believe could also pressure dealer margins.”
“On a relative basis, our valuation multiple is at a discount to 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 said.
Desjardins Securities analyst Bryce Adams initiated coverage of Toronto-based Cadillac Mines Corp. (CADY-T) with a “buy” rating, touting the potential stemming from its “significant land package along the Cadillac-Larder Lake Fault Zone within Canada’s Abitibi Greenstone Belt, a region that has produced more than 200 million ounces of gold.”
“The cornerstone asset is the 5.6moz Kerr-Addison resource that is central to a district-scale strategy which includes the Kerr-Addison, Larder, Galloway and Geminid assets,” he added.
In a client report released Tuesday titled The Cadillac of gold developers, Mr. Adams said the key drivers of share price appreciation over the next 12–24 months for the company, which completed an upsized initial public offering (IPO) on the Toronto Stock Exchange on July 24, “include continued resource growth at Kerr-Addison, compliant resource estimates for Larder and Galloway, engineering studies and permitting progress.”
“Cadillac Mines Corporation (Cadillac) is led by a group of senior, recognized mining executives with multi-decade track records of building, financing and operating gold mines in Canada,” he added. “CEO Rick Howes is a mining engineer with 40+ years of experience, including roles such as former CEO at Reunion Gold and Dundee Precious Metals; he is currently Chair of Torex Gold. CFO Hannes Portmann is a mining engineer and CPA with former senior roles at New Gold (CEO), Marathon Gold (CFO) and SilverCrest Metals (until its US$1.7-billion sale to Coeur). ”
“n our view, Cadillac has a well-aligned shareholder register. The Trinity Group (a Toronto-based cornerstone investor) has a strong track record backing successful Canadian juniors (including Orla Mining, Prime Mining, ATEX Resources and Foran Mining) and retains its equity position through the IPO (approximately 10-per-cent ownership pre-IPO, 9 per cent post IPO), signalling longer-term alignment with Cadillac. Post IPO, Agnico Eagle increased its ownership to 11 per cent (through the concurrent US$60m private placement), Pan American Silver holds 6 per cent (through the closing of the Larder acquisition and IPO participation) and Franco-Neveda retains a 2-per-cent strategic position. With two senior gold producers and the pre-eminent gold royalty company on the share register, Cadillac carries the technical validation of the company’s asset base and long-term development strategy and, in our view, warrants a premium valuation vs junior gold developers. Adding Chairman Pierre Lassonde and other board/management (22-per-cent post IPO), 49 per cent of the pro forma share register is held by parties with long-term value-creation intentions, in our view.”
Seeing it “well-funded through near-term development milestone” and operating in “a preferred Tier 1 jurisdiction,” Mr. Adams set a target of $13.50 target price, representing 80-per-cent upside from current trading levels.
Elsewhere, others initiating coverage include:
* Stifel’s Ralph Profiti with a “buy” rating and $14 target.
“CADY consolidates a district-scale, 40km land position on the Cadillac-Larder Lake Fault in Ontario’s Abitibi greenstone belt, anchored by the Kerr-Addison gold project (3.4Moz Indicated 2.2Moz Inferred) and the Geminid nickel deposit (218Mln lbs Inferred at 2.08-per-cent Ni), which we view as high-grade critical minerals optionality and an opportunity for early cash flow potential to anchor our differentiated view. Historical Galloway and pending Larder properties add a further 2.4Moz of Inferred and 0.4Moz of Indicated gold. Backed by strong foundational partners and a well-capitalized balance sheet, CADY offers early exposure to a potential multi-deposit mining complex at a resource-stage value entry point with a funded path to a maiden PEA/PFS in 2027,” said Mr. Profiti.
* BMO’s Andrew Mikitchook with an “outperform” rating and $10 target.
“Cadillac Mines recently completed a $250-million IPO to bring to the market an exceptionally well financed developer reinterpreting the 11mmoz past producing Kerr-Addison underground gold mine into an open pit,” said Mr. Mikitchook.
“The current pit constrained resources stand at 3.3mmoz in all categories with exploration ongoing to expand and delineate the ultimate development scale.’
Raymond James analyst Michael Freeman thinks Apotex Health Corp.’s (APTX-T) “solid” first-quarter fiscal 2027 results show it is “well-equipped to replace the lion’s share” of the earnings from the U.S. generic version of Revlimid (VLLP2) “through launch execution and cost discipline.”
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“We flag that the US business remains in an active state of (re)development, and 1Q27 benefited from low competition on a key launch (driving the 31-per-cent adjusted EBITDA margin surprise); management expects competition (thus, margins) to normalize in 2Q27, offering a clearer vantage,” he said.
“In our view, FY27/FY28 outlook relies on APTX converting its large launch pipeline into sustained revenue growth while progressively increasing contribution from its high-value segments and continuing to realize cost-savings.”
Maintaining his “outperform” rating, Mr. Freeman raised his target by $1 to $41. The average is $41.27.
In other analyst actions:
* ATB Cormark’s reduced his target for Abaxx Technologies Inc. (ABXX-T) to $95 from $115 with an “outperform” rating. The average is $88.17.
“ABXX reported Q2/26 financial results highlighted by an IFRS 15 accounting reclassification that presents liquidity-related credits ($4.5-million) directly as a top-line reduction against gross transaction and clearing fees ($4.5-million), and reported net revenue of $0.0-million. While this presentation change adjusts reported top-line revenue, it does not alter underlying operational momentum or cash flow dynamics. In an emerging commodities exchange, establishing deep order-book liquidity and building Open Interest (OI) are the critical precursors required to attract full-rate commercial hedgers and institutional participants. Management’s deliberate strategy to reinvest gross fees back into liquidity provider programs is driving a sharp acceleration in trading activity, with ADV up 276 per cent quarter-over-quarter to 14,572 contracts in Q2 and expanding further to 34,136 ADV in July,” said Mr. Toner.
* RBC’s Jimmy Shan bumped his Automotive Properties REIT (APR.UN-T) target to $13.50 from $13 with an “outperform” rating. The average is $12.75.
“The main takeaways for the quarter: 1) a second consecutive 2-per-cent distribution increase, setting a pattern of consistent distribution growth; 2) the creative Vaughan Transaction – selling 50 per cent of 9088 Jane Street at a premium to IFRS value while retaining redevelopment optionality under a new 16-year triple net lease; and 3) active lease renewal activity removing near-term maturities. At 11.4 times 2026 FFO (vs. 15.3 times for peers), APR continues to trade at a wider than historical discount to peers, which we believe provides upside,” he said.
* As it continues its a strategic review in response to an unsolicited proposal from Slate Asset Management (SLAM), Mr. Shan raised his Slate Grocery REIT (SGR.U-T, SGR.UN-T) target to US$12.50 from US$11 with a “sector perform” rating. The average is US$11.39.
“Amid the ongoing strategic review, we see a few puts and takes. Though details of SLAM’s proposal are unknown, we believe upside could be limited as it’s a related party. Given robust investment demand for grocery anchored retail, we believe third parties will also have interest. However, SLAM’s external management contract and SGR’s high leverage may limit the number of bidders at the table. Nonetheless, we see the potential for an en bloc sale,” said Mr. Shan.
* TD Cowen’s Michael Tupholme raised his Mattr Corp. (MATR-T) target to $24 from $23 with a “buy” rating, while RBC’s Sabahat Khan hiked his target to $22 from $13 with an “outperform” rating. The average is $23.33.
“While Q2/26 consolidated revenue and adjusted EBITDA was pre-released, we were encouraged by the underlying details; strong year-over-year revenue growth and margin performance in both segments. We expect momentum to continue, driven by supportive end-market demand trends and operational efficiency gains. We remain constructive on MATR and see room for expansion in the stock’s valuation on continued execution,” said Mr. Tupholme.
* National Bank’s Matt Kornack raised his target for California-based SmartStop Self Storage REIT (SMA-N), which he thinks provides “unique exposure to Canada, primarily in the Greater Toronto area,” to US$39.25 from US$38.50 with an “outperform” rating. The average is $36.10
“After a solid Q2 print, the setup remains for gradual improvement in fundamentals,” he said. “Absent cost of capital to grow through on-balance sheet acquisitions, management is using a capital-light approach to achieve clustering efficiencies and operating leverage.
“After marketing with management in Toronto, we came away incrementally positive on the story in terms of the strength and technologically advanced platform, near-term capital-light growth initiatives that are driving better margins and improving underlying fundamentals (organic growth outlook). As such, we took our target price higher on a tighter assumed discount to NAV with further upside potential as the growth plan unfolds and storage headwinds dissipate.”