Inside the Market’s roundup of some of today’s key analyst actions
National Bank Financial analyst Michael Doumet thinks investors “should own waste names.”
In a report titled Turning Trash into Cash, he initiated coverage of the solid waste industry, emphasizing companies in the space “fare well” in recessions, low-growth environments and periods of elevated inflation.
“An economic slowdown would negatively impact construction and industrial waste streams (although activity there is already subdued) but should only have a modest aggregate effect to revenue trends (wasteco organic declines averaged less than 2 per cent in 2020),” said Mr. Doumet. “The wastecos face little direct impact from tariffs (i.e., minor impact to capex). As a defensive sector, sector trading multiples expanded year-to-daye versus a modest multiple contraction for the S&P500. This divergence was also seen in 2018 (trade war with China, slowing economic growth, lower consumer confidence, Brexit uncertainties, etc.) and 2022 (rising rates and fears of economic recession). Relative valuation spreads between the wastecos and the S&P500 have cooled in recent weeks (largely following easing tariff tensions with the U.S. and China) and, in our view, are not stretched in the context of the (i) upside to 2025 guidance (for nearly all) and (ii) a nearing FCFPS inflection from sustainability.”
As double-digit defensive compounders, Mr. Doumet emphasized “underperformance is infrequent (4 of last 10 years vs. S&P500) and shallow (less than 1-per-cent delta when the S&P500 rallies more than 20 per cent), translating into a cumulative outperformance (up 6 per cent per year vs. S&P500 in last 10 years).”
“Quality comes at a price: today, wastecos trade at an above-average premium vs. the S&P500 (group FCF yield is below that of the 10-Year Treasury),” he added. “While we acknowledge relative performance risk in a risk-on environment, we would not characterize current multiples as ‘stretched’ given (i) upside to 2025 guidance (for nearly all) and (iii) a nearing FCFPS inflection from sustainability.
“In the last three years, solid waste companies’ (wastecos) share price performance has far exceeded that of the broader market, with WCN (41 per cent), WM (43 per cent), GFL (62 per cent) and RSG (87 per cent) outperforming the S&P500 (40 per cent). SES shares are up over 115 per cent. following a corporate transformation and an aggressive share repurchase program. Overall strong execution has driven a sizable sector-wide re-rate in the last several years. In the last 10 years, wastecos’ share performance exceeded that of the S&P500 by an average of 6 per cent per year (largest underperformance in 2021 [down 8 per cent]). YTD, wasteco share prices are up 16 per cent (on average) versus the S&P500 down 1 per cent. Much of this delta, in our view, is due to the lingering macro uncertainty (the sector’s outperformance was greater YTD through April but has come in so far in May).”
Mr. Doumet initiated coverage of these companies on Tuesday:
* GFL Environmental Inc. (GFL-T) with an “outperform” rating and $76 target. The average target on the Street is $71.29, according to LSEG data.
Analyst: “We believe there are no structural limitations for GFL to close the margin gap with its larger peers’. While we see less upside from multiple expansion (following the re-rate), its business optimization, an M&A re-acceleration, and an outsized contribution from RNG/recycling position GFL for the fastest EBITDA/share (more than 17 per cent) and FCFPS (more than 20 per cent) CAGR [compound annual growth rate.”
* Republic Services Inc. (RSG-N) with a “sector perform” rating and US$270 target. Average: US$259.41.
Analyst: “RSG is a clean story. Its scale gives it advantages in terms of digital/automation, but it does not limit its ability to ‘move the needle’ with M&A. Additionally, we think it has proven out its thesis with Environmental Solutions. All said, we believe its strong execution has been captured with its re-rate (highest in the group), limiting upside in the NTM [next 12 months].”
* Secure Waste Infastructure Corp. (SES-T) with an “outperform” rating and $17 target. Average: $17.17.
Analyst: “We believe SES’s re-rate is unfinished. While we see a risk of a modest trim to its 2025 guide (due to macro), we believe recent investments will provide a strong growth uplift to 2026E EBITDA, supporting the continuation of its generous buyback program, which will, in turn, act as a multiplier for when SES completes its re-rate.”
* Waste Connections Inc. (WCN-N, WCN-T) with an “outperform” rating and US$216 target. Average: US$215.77.
Analyst: “WCN’s leading FCF margins and M&A track record underpin its ability to compound earnings at a superior rate. While its premium valuation could be viewed as a risk, it is also what enables it to capture the highest M&A value accretion. Given we expect its growth execution will continue to support its valuation, we view WCN’s risk/reward as favourable.”
* Waste Management Inc. (WM-N) with a “sector perform” rating and US$249 target. Average: US$248.75.
Analyst: “WM has several levers to drive strong earnings growth through 2027. While poised for outsized future benefits from sustainability and Stericycle synergies, we believe the extra noise, limited deployable capital and lower conviction on it ‘beating’ its 2025 guidance moderate the potential NTM upside.”
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In response to a nearly 30-per-cent jump in its share price since it reported better-than-expected results on May 5, TD Cowen analyst Patrick Sullivan lowered his recommendation for Wajax Corp. (WJX-T) to “hold” from “buy” previously, seeing the industrial products and services provider “now trading close to fair value.”
“WJX has made excellent progress adjusting its operating expenses in the previous two quarters, and we commend the team for that effort; however, normalized equipment supply is likely to put a ceiling on, or pressure, gross margins in the near term, in our view,” he said. “The most recent Canadian Equipment Report out of Rouse indicates that both general construction equipment and heavy earthmoving equipment auction values continued to weaken through April, which was also a low-volume month, supporting our view of a well-supplied, competitive market.”
Mr. Sullivan now expects earnings growth from its Engineered Repair Services (ERS) and Industrial Parts (IP) businesses to remain “muted” due to trade concerns.
“Tariff-related uncertainty has already impacted investment decisions from certain customers, creating notable weakness in the portion of the IP/ERS business related to capital projects vs. that related to general maintenance, which has remained resilient,” he said. “We believe it will take some time for customers to regain enough confidence in their own outlooks to redeploy capital to expansion/debottlenecking projects.”
He reiterated his Street-high $24 target for the Toronto-based company’s shares. The current average is $22.38.
“We remain comfortable with our estimates, which we had increased with our May 6 note, after the company demonstrated better-than-expected operating margins, but we believe now is not the right time to increase our valuation multiple. Our top-line forecast is underpinned by a strong backlog of $561-million, including six large mining shovels, and is supported by healthy demand in the mining and energy sectors, as per management commentary. With improved operating leverage, the company can focus on deleveraging from 2.5 times net debt/TTM [trailing 12 month] adjusted EBITDA currently, back within its target range of 1.5-2.0 times. Once delevered, the IP/ERS acquisition strategy may pick up again, adding a potential positive catalyst that has been missing from the story for the past 18 months.”
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In a report released Tuesday titled Capex cliff sets up a new cycle of tasty returns, Canaccord Genuity analyst Luke Hannan initiated coverage of Premium Brands Holdings Corp. (PBH-T) with a “buy” recommendation, seeing it “getting back on track for durable organic revenue growth.”
“Premium Brands offers investors high single-digit organic growth through the Specialty Foods (SF) business across each of its three distinct platforms (i.e., Protein, Sandwich, Bakery & Culinary), as well as mid-single-digit organic growth through its Premium Foods Distribution (PFD) segment made up of two platforms (Distribution and Seafood),” he said.
“In the latter portion of 2024, a slowdown in consumer spending and sales challenges at a key foodservice customer led to 2024 results falling short of expectations. That said, green shoots of a recovery, along with the company arriving at the end of a heavy capex cycle between 2022 and 2024, lead us to believe the pieces are in place for meaningful deleveraging and improved ROIC going forward, which we expect should drive a multiple re-rating from the current five-year lows.”
Mr. Hannan set a target of $100 for the Vancouver-based company’s shares. The average is $103.62
“We believe PBH shares present compelling upside given its long-term organic growth profile, prospects for continued SF growth in the U.S., and its strong brand portfolio,” he added.
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Scotia Capital analyst Orest Wowkodaw thinks the drop in Ivanhoe Mines Ltd.‘s (IVN-T) share price alongside the announcement of the removal of its copper production and cost forecast at one of its anchor operations in the Democratic Republic of Congo due to continuing seismic activity “appears overdone.”
The Vancouver-based company fell 16.2 per cent on Monday and now sits over 20 per cent lower over the past week.
“While the update is clearly negative and significant risks remain, we do not anticipate a long-term impairment at Kakula based on the current situation,“ said Mr. Wowkodaw. ”After materially reducing our 2025-2026 Cu production forecasts to 440kt and 575kt (from 550kt and 600kt previously), our 10-per-cent-NAVPS declined by only 2 per cent."
Keeping a “sector outperform” rating for Ivanhoe shares, he cut his target to $16 from $19. The average is $20.19.
“Although geopolitical risk is elevated, we rate IVN shares Sector Outperform based on the company’s world-class asset base, strong growth profile, and impressive management track record,” said Mr. Wowkodaw.
Elsewhere, others making target changes include:
* Raymond James’ Farooq Hamed to $21 from $23 with an “outperform” rating.
* Jefferies’ Fahad Tariq to $19 from $23 with a “buy” rating.
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Ahead of the June 11 release of its first-quarter fiscal 2026 financial results, TD Cowen analyst Brian Morrison said he continues to “appreciate” Dollarama Inc.‘s (DOL-T) long-term growth outlook, “especially as its model proves portable and is expanded globally.”
“The combination of a ‘soft landing’ in Canada, economics approaching that of Canada in LATAM, the early commencement of its entry to Mexico, and its transformation of the TRS [The Reject Shop] operating model, should sustain midteen EPS growth and warrant a premium multiple,” he said.
In a note released Tuesday, Mr. Morrison warned he expect a “moderation” in the Montreal-based retailer’s sales for the quarter following a 22.7-per-cent gain over the the past two years. His 6-per-cent growth forecast is “a combination of same-store sales returning to its historical target range at 3.6 per cent and 18 new store openings.”
“The gross margin should modestly improve with scale/freight tailwinds offsetting a further mix shift to consumables, while SG&A should be a benefit as operating efficiencies/scale offset higher store labour costs,” he added. “We forecast ongoing outsized growth at Dollarcity (equity pick up more than 30 per cent) due to productivity, margin expansion, and its increased ownership share. This should handily offset initial start-up costs associated with Mexico. Our EPS forecast of $0.83 is in line with consensus at $0.84.”
“Following a pause in price increases for much of F2025, our price tracker illustrated several increases implemented in Q1/F25 inclusive of single size chocolate bars. Being a price follower, we assume Dollarama is following its peers that is typically a positive as it widens its relative value proposition. We will monitor this recent development.”
Also seeing “attractive” top-line growth at Dollarcity and “excited” to watch the transformation of TRS after the acquisition of the Australian company closes, Mr. Morrison reiterated a “buy” rating and Street-high $185 target for Dollarama shares. The average is currently $171.96.
“We are increasingly confident that the Canadian operations can achieve stated targets as its outsized growth during elevated inflation normalizes, the growth outlook for Dollarcity LATAM appears exceptional, and the probability of success for Mexico/TRS increases, with the model now successfully operating in five different countries,” he said. “With improved visibility upon its mid-term growth outlook and Dollarama’s long-term track record of being a solid investment, we continue to view a BUY recommendation as appropriate at this time.”
“We view Dollarama as a core portfolio holding and expect investors to gain heightened comfort in its premium multiple as it continues to prove out the portability of its business model. We acknowledge our price target is below our 15-per-cent hurdle rate and will revisit it after the company’s Q1/F26 release.”
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RBC Dominion Securities analyst Irene Nattel thinks “consistency is key” for Loblaw Companies Ltd. (L-T), touting its “visible, predictable, sustainable growth algo” after a series of management meetings last week with European investors that included CEO Per Bank and CFO Richard Dufresne.
She said the retailer’s management team reiterated that its goal remains on consistently delivering the financial framework and 8-10-per-cent EPS growth target.
“Focus is squarely on growing the store base and reinvesting in price to deliver value to consumers and drive top line at stable margins, managing costs < revenue growth, repurchasing 3 per cent of the stock annually, to deliver 8-10-per-cent annual EPS growth consistently, in addition to annual dividend growth,” said Ms. Nattel. “Medium-term focus on network expansion should add 100 basis points to long-term revenue growth framework 2-3 per cent, driving EPS growth toward higher-end of the range.
“Real opportunities in hard discount, pharmacy, the right-hand side (RHS), and T&T. In hard discount, Loblaw has identified and is actively filling a gap in small format stores, notably in densely populated urban markets and cities with more than 50k population. New store pace accelerating in 2025 with 53 hard discount and 30 Shoppers Drug Mart (more than 2-per-cent total sq ft growth), and growing T&T including first U.S. store in 12/2024, additional tests planned before broader rollout. Company is also retrofitting existing stores to optimize the right-hand side, with early results showing double-digit sales lift with expanded/refreshed departments (toys, kids, HABA, pet). Another 20 retrofits planned this year (26 total), after which the concept would be deployed chain-wide to 180 locations. Rollout of pharmacist-led clinics continues (2025 target 260, and growing), providing critical point of service to more than 20 per cent of the population without a GP.”
In a note released Tuesday, Ms. Nattel reiterated her view that “Loblaw is best positioned to capitalize on the secular shift in purchasing patterns with a store base that skews to discount, industry-leading PL penetration and loyalty program, tailwind of hard discount and pharmacy square footage growth, with rising FCF/ROE/ ROIC.”
Calling it her top idea in the sector, she maintained an “outperform” rating and $234 target. The average is $237.
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TD Cowen analyst Michael Tupholme said he came away from recent U.S. investor meetings with Stantec Inc. (STN-T) “incrementally positive view of the company and its outlook.”
“We characterize the tone of the meetings as favourable, with mgmt. providing an upbeat assessment for most of STN’s key target end-markets and overall growth potential (near term and longer term),” he said.
“Overall, management commentary further reinforced the reasons we are constructive on Stantec; namely a solid organic growth outlook, margin improvement opportunities, and M&A growth potential. While STN’s shares have performed very well of late, we continue to see healthy upside.”
Mr. Tupholme said the Edmonton-based sustainable engineering, architecture and environmental consulting firm expressed confidence in delivering its 2025 and 2026 financial targets, supported by its record backlog. He sees “considerable improvement opportunities” on margins.
“Regarding 2025 organic net revenue growth (guidance is for ‘mid-to-high single digits’ organic growth overall), STN expects all of its business operating units to deliver growth within this range this year,” the analyst said. “Looking beyond 2025, encouragingly, STN sees considerable room for growth within its current ‘swim lanes’ (i.e., no need to pursue new end-markets), and management expressed confidence that 2025’s forecast organic growth range can be sustained over coming years and beyond. While positive on most of STN’s end-markets, management was particularly constructive on growth potential in water, infrastructure (including defence), power, healthcare and mission critical facilities (note: STN has not seen a slowdown in data centers work; currently 3 per cent of revenue). STN continues to see softness in Australian transport. and U.K. infra. markets, but sees potential for improvements.”
Also seeing the potential for accelerating M&A activity, Mr. Tupholme kept a “buy” rating and Street-high $165 target for Stantec shares. The average on the Street is $150.73.
“We remain constructive on Stantec’s outlook, which we see as supported by the company’s record backlog, favourable end-market trends, margin improvement potential over time, and acquisition growth potential,” he said.
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In other analyst actions:
* CIBC’s Luke Bertozzi raised the firm’s ratings for Allied Gold Corp. (AAUC-T) and Centerra Gold Corp. (CG-T) to “outperformer” from “neutral” upon assuming coverage. His target for Allied rose to $26 from $17.40, while his Centerra target moved to $12 from $11.50. The averages are $26.66 and $12.05, respectively.
* BMO’s John Gibson initiated coverage of TerraVest Industries Inc. (TVK-T) with a “market perform” rating and $180 target. The average is $188.80.
“TerraVest is a diversified consolidator of manufacturing companies across various industrial markets,” said Mr. Gibson. “The company has been very active on the M&A front, completing an average of two acquisitions per year since 2014, but has ramped activity significantly in 2025. Valuation remains the obstacle for us, with the company now trading 11 times our 2027 EBITDA estimates, which underpins our Market Perform rating. That said, we recognize TVK’s M&A strategy introduces significant catalysts moving forward.”
* Ahead of the release of its fourth-quarter 2025 results on June 19 before the bell, BMO’s Tamy Chen raised her Empire Co. Ltd. (EMP.A-T) target to $53 from $48 with a “market perform” rating, exceeding the $49.50 average.
“Our SSS [same-store sales estimate] is increased to up 3.2 per cent, from up 2.7 per cent previously. Street is up 2.6 per cent,” he said. “This would be a fourth consecutive quarter of quarter-over-quarter improving SSS. We believe the underlying consumer’s grocery shopping behaviour has not materially changed vs. early-2025, food inflation accelerated q/q, and EMP is lapping a weak FQ4/24. Separately, we wonder if very recently, the ‘Buy Canadian’ trend may be subsiding.”