Inside the Market’s roundup of some of today’s key analyst actions
In response to last week’s “unexpected” announcement of the approval of the Grassy Mountain coal project by The Alberta Energy Regulator, RBC Dominion Securities Walter Spracklin upgraded Westshore Terminals Investment Corp. (WTE-T) to an “outperform” recommendation from “sector perform” previously.
While he cautioned the decision restarts the approval process but “does not guarantee the project ultimately goes through,” Mr. Spracklin does “not see this upside as priced into shares at current levels,” leading to his rating revision.
“And even if the project does not go through, strong underlying FCF (8-per-cent yield) and no debt protect investors to the downside,” he added.
“he Alberta Energy Regulator last week approved the Grassy Mountain Coal Project, which we see as a meaningful positive for WTE; however, this does not guarantee the project will move forward. The project was initially denied in 2021 due to environmental concerns and at the time the project had contracted from WTE 4.5Mt of capacity (for reference, WTE is at a throughput run rate of 26.5Mt currently and a name plate terminal capacity of 35Mt). Key is that Grassy Mountain is met coal, which we view as having a more favourable long-term outlook versus thermal, and we therefore see this type of throughput through WTE as deserving of a higher multiple and as a result, we expect a material re- rate higher in WTE shares if the project is approved.”
In a note to clients released Tuesday, Mr. Spracklin said Westshore’s management has not “reengaged regarding what production and throughput through Westshore would look like longer-term.” However, he thinks the Vancouver-based company will “get this volume if the project goes ahead, and see the project as representing nice potential upside.”
“We are making no change to our estimates despite our view that Grassy Mountain will ship roughly 4.5Mt of met coal per year through Westshore longer-term if the project goes ahead (in line with expectations when the project was initially denied in 2021),” he added. “Prior to today, we had assumed 12Mt of coal throughput annually post 2030, mainly from Teck and/or some small contribution from other met/thermal producers. While our out year coal throughput estimates are unchanged, we flag nice upside to these estimates if Grassy Mountain is approved.”
Mr. Spracklin increased his price target for Westshore shares to $30 from $23. The average target on the Street is $30, according to LSEG data.
“We value Westshore shares off a discounted cash flow methodology and today lower our cost of capital assumption to 8 per cent (from 10 per cent) reflecting the upside Grassy Mountain represents to our long-term throughput estimates. This results in our target price moving higher to $30 (from $23). We expect the Grassy Mountain news to be well-received and are upgrading shares to OP,” he concluded.
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While National Bank Financial analyst Mohamed Sidibé remains “positive on the long-term value potential” for Lithium Americas Corp.‘s (LAC-T) Thacker Pass project in northern Nevada, he downgraded its shares to a “sector perform” recommendation from “outperform” previously in response to its May 15 announcement of the launch of a $100-million at-the-market (ATM) equity program.
The Vancouver-based company will the common shares with TD Securities through both the New York Stock Exchange and the Toronto Stock Exchange with proceeds to be used for general corporate purposes, “which may include funding of corporate and project overhead expenses, financing of capital expenditures, repayment of indebtedness and additions to working capital.”
“We acknowledge that the ATM adds flexibility to the balance sheet, but it does create an equity overhang for future potential dilution, as well as raises questions around the overall project capex,” said Mr. Sidibé in a client note.
“Notably, management noted in its Q1/25 results reported before market on May 15 that approximately 75 per cent of the company’s capital costs are insulated from any direct potential tariff impact. That leaves 25 per cent of our remaining $2.5-billion exposed. Now, a potential 10-20% impact to that 25 per cent would lead to $60-120 mln in additional capex, manageable in our view based on our current surplus of $79-million we model and the ATM of $100-million. Management reiterated that it remains fully funded at both the corporate and project level and noted that the use of net proceeds from the ATM, if any, will be for general corporate purposes, financing of capex, repayment of indebtedness and additions to w/c.”
The analyst said he seeking “greater clarity and confidence on final funding outcomes and tariff impacts,” but he continues to view Thacker Pass “as a strategically significant lithium asset with long-term value potential.”
“Major earthworks at the Thacker Pass site are nearing completion, and the placement of permanent concrete for the processing plant began in early May,” he said. “Engineering progress has surpassed 60 per cent and is on track to exceed 90 per cent by year-end. Structural steel fabrication is underway, with installation scheduled to begin in September. Meanwhile, the company has started installing modular housing units at its dedicated workforce facility in Winnemucca. LAC has also submitted a plan to develop a limestone quarry to supply a cost-effective, local source of a key reagent used in processing. Construction of Phase 1 is still expected to be completed in late 2027 in line with our model; we estimate first production in Q1/28.”
After reducing his new asset value projection, Mr. Sidibé lowered his target for Lithium America’s TSX-listed shares to $5.50 from $6.50, which is the current average on the Street.
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Despite Extendicare Inc. (EXE-T) reporting underlying first-quarter results that fell short of his expectations, RBC Dominion Securities analyst Pammi Bir thinks the Markham, Ont.-based long-term care provider “remains on steady ground amid turbulent markets,” seeing it “gaining field position across segments.”
“We expect healthy organic growth to persist across segments, particularly with the substantial improvements in operational execution and government funding,” he said. “As well, the acquisition of CTG [Closing the Gap Healthcare Group] marks another strategic step forward through an accretive transaction. All said, we see its premium valuation as well-supported.”
On May 6, Extendicare reported headline quarterly funds from operations per share of 27 cents, up 6 cents year-over-year and ahead of both Mr. Bir’s 23-cent estimate and the consensus projection of 22 cents. However, he noted FFOPS came in at 21 cents if workers comp rebates were excluded, falling short of expectations “due to lower NOI and higher current taxes.”
“Our overall read on results is neutral, as EXE’s quarterly prints tend to be very volatile,” he said. “Operationally though, stripping out the noise from one-time and prior period funding, results are trending positively across segments.”
“Excluding workers comp rebates, LTC NOI was short of our call, partly due to seasonality and timing of home closures/openings (Axium JV related). Still, excluding prior period adjustments, NOI was up 19 per cent year-over-year from higher govt funding, timing of spend, and higher preferred occupancy. In light of the significant ‘catch-up’ funding increases announced last year, we expect more inflationary- type growth ahead. NOI was also modestly below our forecast in ParaMed (excluding workers comp rebates). However, NOI was still up a substantial 41 per cent year-over-year (excluding prior period adjustments) from rate increases and higher ADV (up 2 per cent quarter-over-quarter, up 9 per cent year-over-year). Supported by EXE’s platform investments, lengthy LTC waitlists, and improved labour availability, our forecasts reflect mid-to-high-single-digit NOI growth through 2026. Combined with steady advances in Managed Services , we see EXE as capable of delivering mid- single-digit total organic NOI growth in the year ahead.”
Believing its growth “stacks up well,” Mr. Bir raised his 2025 and 2026 FFOPS estimates, leading him to increase his target for Extendicare shares to $15 from $13.50 with a “sector perform” rating (unchanged). The average is currently $16.08.
“We believe valuation reasonably captures its improving growth outlook, business mix, and strong balance sheet,” said Mr. Bir.
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Desjardins Securities analyst Kyle Stanley thinks InterRent Real Estate Investment Trust‘s (IIP.UN-T) recent focus on capital allocation is “paying off.”
Andrew Willis: InterRent REIT plays coy on offers from potential buyers
“IIP reported in-line 1Q results, with our takeaway being one of cautious optimism as it relates to the leasing environment across IIP’s portfolio, particularly as it was the only apartment REIT to benefit from improving turnover spreads vs 4Q24,” he said.
“IIP completed 465 new leases in 1Q25 (3 per cent year-over-year) at an 8.5-per-cent turnover spread vs 7.4 per cent in 4Q24, positioning it as the only apartment REIT to improve its new leasing spread vs 4Q. Proactive increases to marketing spend in 1Q have positioned IIP favourably ahead of the stronger spring/summer leasing period (occupancy largely flat at 96.9 per cent). Call commentary suggests turnover spreads have stabilized, with the mid- to high-single-digit range expected through 2025 as IIP captures the 23-per-cent mark-to-market opportunity. IIP reiterated its expectation for 5–6-peer-cent SP [same-property] revenue growth for 2025, which aligns with our 5-per-cent estimate."
Mr. Stanley thinks the Ottawa-based REIT’s capital allocation priorities remain intact, believing “market volatility has not impacted IIP’s 2025 disposition program.”
“It has sold four assets for $65-million year-to-date, with confidence in the previously disclosed annual disposition target of $200–250-milllion ($125–140-milllion net). IIP has completed $70-milllion of unit buybacks since the beginning of the year at an average price of $10.35. The buyback at a 37-per-cent discount to IFRS BV and a 5.4-per-centimplied cap rate drove a 2-per-cent increase in our FFOPU [funds from operations per unit] outlook. We expect IIP to renew the NCIB later this month.“
Maintaining his “buy” recommendation, Mr. Stanley hiked his target to $14 from $11.50. The average is $12.91.
Elsewhere, others making target adjustments include:
* National Bank’s Matt Kornack to $12 from $11.75 with a “sector perform” rating.
“While IIP’s quarterly results were slightly below our forecast (although we are nitpicking a bit here as the variances on most items were less than 2 per cent), there were some positive signals on the leasing front,“ said Mr. Kornack. ”Occupancy was stable and rent spreads improved sequentially on consistent turnover levels (the only Canadian apartment name where we saw this happen). Nonetheless, organic growth in the quarter was relatively muted (up 3 per cent on NOI, although revenues were better at up 5 per cent as winter weather impacted margins) and the MTM potential came down sequentially to 23 per cent (was 26 per cent). From an earnings standpoint, our estimates increase on the back of active accretive buyback activity funded through dispositions.“
* Raymond James’ Brad Sturges to $13.25 from $12.75 with an “outperform” rating.
“Given its forecasted deep NAV/unit discount, InterRent’s capital allocation priorities in the near-term remain focused on increasing unit buybacks under its NCIB, which we expect to be executed generally on a financial leverage neutral basis. We believe continued execution of the REIT’s near-term capital allocation plan can further help to narrow its discount valuation. While Canadian MFR leasing fundamentals have moderated from historically all-time high levels, we believe InterRent remains positioned to generate mid-to-high single-digit 2025E AFFO/unit growth year-over-year,” said Mr. Sturges.
* Scotia’s Mario Saric to $12.50 from $12.25 with a “sector outperform” rating.
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H.C. Wainwright analyst Heiko Ihle thinks Vancouver-based TMC the metals company Inc. (TMC-Q) is poised to benefit from a first-mover advantage in the deep-sea mining space.
“The Metals Company (TMC) is a deep-sea mineral explorer aiming to commercialize polymetallic nodules from the Clarion Clipperton Zone (CCZ), a 4.5-million square kilometer stretch of international waters in the Eastern Pacific that contains ‘nodules’ rich in nickel, copper, cobalt, and manganese,” he explained. “Located about 1,300 nautical miles southwest of San Diego, the CCZ holds one of the world’s largest known nodule deposits. TMC has completed several key milestones, namely pilot collection and environmental trials, and is positioning itself as a first mover as management tackles the world’s first seafloor nodule exploitation contract that is a process with no regulatory precedent.”
In a research report released Tuesday, Mr. Ihle initiated coverage with a “buy” recommendation, emphasizing the “significant” support of the U.S. government.
“On April 24, 2025, President Donald Trump signed an Executive Order ‘Unleashing America’s Offshore Critical Minerals and Resources,’ which aims to establish a framework for American companies to retrieve offshore critical minerals and resources,” he said. “The EO highlights America’s core national security and economic interests in deep-sea science, technology, and seabed mineral resources amid unprecedented challenges in these areas. President Trump has called for an expedited process for reviewing and issuing seabed mineral exploration licenses and commercial recovery permits through the Deep Seabed Hard Mineral Resources Act (DSHMRA) within 60 days of this order.
“Following the support from the EO, TMC submitted applications to the National Oceanic and Atmospheric Administration (NOAA) for two exploration licenses and one commercial recovery permit under the DSHMRA on April 29, 2025. We stress that these two exploration license applications combine for a total area of 199,895km², while the commercial recovery permit covers 25,160km². Management believes that exploration licenses contain about 1.64B wet tonnes (t) of polymetallic nodules with the potential of 500.0Mt of exploration upside, containing 15.5Mt of nickel, 12.8Mt of copper, 2.0Mt of cobalt, and 345.0Mt of manganese.”
Mr. Ihle set a target of $5.50 for TMC shares. The current average is $5.87.
“Unsurprisingly, the major near-term catalyst for TMC is the receipt of positive responses regarding its exploration licenses and commercial recovery permits,” he said. “In our view, this key step marks a major de-risking event towards unlocking commercial operations. TMC’s Environmental Impact Statement (EIS) is currently expected in 3Q25 and remains a critical regulatory milestone that should further de-risk the NORI-D project and address any concerns voiced by opposition groups.”
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In other analyst actions:
* Citing better-than-expected first-quarter execution and improved visibility into cost control and earnings stability, Jefferies’ Sheila Kahyaogl upgraded Air Canada (AC-T) to “hold” from “underperform” with a $18 target, rising from $12. The average is $23.87.
“[Jefferies’ estimated]’25 EBITDA of $3.48-billion is near the top-end of the reduced $3.2–3.6-billion guide and sits comfortably within the original $3.4–3.8-billion range,” she said.
* TD Cowen’s Michael Tupholme raised his Bird Construction Ltd. (BDT-T) target to $31 from $26 with a “buy” rating. The average is $32.17.
“Adj. EBITDA was about 3 per cent above consensus on better margins, but revenue growth (up 4.3 per cent year-over-year vs. consensus at up 7.9 per cent year-over-year) was soft partly due to certain industrial work deferrals (customer caution given macro),” he said. “Q2/25 revenue may be similarly affected. Still, BDT noted that its record combined backlog provides good visibility into meeting its 2025 targets. We remain constructive on BDT’s outlook and the stock.”
* Mr. Tupholme cut his Mattr Corp. (MATR-T) target to $11 from $12 with a “hold” rating, while ATB Capital Markets’ Tim Monachello reduced his target to $15 from $16 with an “outperform” rating. The average is $15.
“While Q1/25 cont. ops. EBITDA was above consensus, MATR’s Q2/25 guidance calling for cont. ops. EBITDA to decline quarter-over-quarter compares unfavourably to Q2/25 pre-qtr. consensus. MATR expects certain customer purchasing decisions in Q2/25 and beyond may be delayed or reduced due to tariff-related uncertainty. We see upside in MATR as limited until there is lifting of the uncertainty clouding the outlook,” he said.
* Following “weak” first-quarter results, National Bank’s Rupert Merer lowered his Exro Technologies Inc. (EXRO-T) target to 16 cents from 20 cents with an “underperform” rating. The average is 13 cents.
“We believe that EXRO has a unique and valuable technology offering but needs to access additional capital to survive and breakeven. With no improvement to liquidity risk and challenged markets, including tariff risk and reduced support for EVs, we maintain our Underperform rating, and we have lowered our target,” said Mr. Merer.
* National Bank’s Shane Nagle moved his target for shares of Metalla Royalty & Streaming Ltd. (MTA-X) to $6.50 from $6.75 with an “outperform” rating. The average is $7.55
“Our $6.50 target price (was $6.75) has been lowered modestly as we have adjusted ramp-up and production estimates for 2025 and adopt a more conservative assumption on longer-dated assets including Taca Taca, West Wall and Castle Mountain,” said Mr. Nagle. “Our Outperform rating is based on the company’s strong growth outlook, diversified portfolio and high-quality counterparties. We believe MTA’s valuation has been restricted by its development-heavy portfolio, with 80 per cent of NAV in development/exploration stage, including four projects (corresponding to 17 per cent of NAV) expected to begin producing by the end of 2025; a step-change in FCF should drive a re-rating.”
* Scotia’s Ben Isaacson bumped his Superior Plus Corp. (SPB-T) target to $10 from $9.50 with a “sector outperform” rating. The average is $10.05.