Inside the Market’s roundup of some of today’s key analyst actions
National Bank Financial analyst Cameron Doerksen views CAE Inc. (CAE-T) as “relatively well positioned ... to manage through the current macroeconomic and tariff uncertainty,” and he now sees the current share price as “a more attractive entry point.”
Accordingly, he raised his recommendation for the Montreal-based company to “outperform” from “sector perform” ahead of the May 13 release of its fourth-quarter fiscal 2025 financial results.
“We downgraded the stock in January as we viewed the relative valuation at that time as fair, and we saw some near-term headwinds for the Civil segment as well as growing uncertainty around tariffs,” said Mr. Doerksen. “The stock has fallen slightly since our downgrade and some of our concerns have since been alleviated.”
In a research note released after the bell on Tuesday, he emphasized demand for CAE’s pilot training is not overly cyclical, allowing it to weather some of the turbulence from the uncertain macroeconomic backdrop. He also sees the backdrop in the Defence industry “getting even more positive.”
“There has been some recent market concern over the potential impact on CAE from a slowing airline sector,” he explained. “Demand for airline pilot training is ultimately driven by global airline capacity growth. Although airline profitability has historically been severely impacted by economic slowdowns, actual flying activity has been much less cyclical and in the event of a significant airline slowdown, pilot training will remain resilient as 70 per cent of training is driven by regulated recurrent training.
“CAE’s underperforming Defence segment has had a more positive trajectory recently, with the fiscal Q3 EBIT margin coming in at 8.3 per cent, above CAE’s original F2025 target range of 6-7 per cent. With a backlog that sits at $11.5 billion (with better embedded margins) and the end market backdrop for defence spending in CAE’s key markets overwhelmingly positive, we see Defence as a growing contributor to CAE earnings in the coming years”
After introducing his forecast for its fiscal 2027, Mr. Doerksen increased his target for CAE shares to $43 from $40. The average target on the Street is $41.25, according to LSEG data.
=====
National Bank Financial analyst Shane Nagle raised his rating for Ero Copper Corp. (ERO-T) to “outperform” from “sector perform” previously, predicting a ramp-up at its Tucumã operation in Brazil will support a free cash flow inflection later this year.
“With our revised estimates, we foresee a FCF inflection point for ERO in H2/25, accounting for payables to reduce in Q2/Q3, copper prepayment deliveries through to the end of 2026 and slower ramp-up assumptions at Tucumã,” he said. “Available liquidity of US$116-million (including US$81-milllion in cash) appears sufficient to fund the near-term obligations and support a reduction in leverage from 2.38 times (as of Q1/25) to less tha 1.3 times by the end of 2025.
“While we remain cautious on the long-term outlook for the company given a premium P/NAV valuation and declining production profile from existing operations beginning in H2/27, with more certainty on FCF inflection through H2/25 and fewer concerns with near-term liquidity needs, we expect to see a rebound in valuation multiple (currently 4.5 times EV/2026E CF compared to peers at 5.8 times).”
After the bell on Monday, the Vancouver-based miner reported earnings that topped the Street’s expectations “despite poorer operating performance in the quarter.”
“At Tucumã, Ero highlighted that more than 50 per cent of quarterly throughput and production occurred in March, following the completion of planned maintenance to address bottlenecks associated with tailings filtration,” said Mr. Nagle. “The Company remains confident in achieving commercial production in H1/25 - maintaining guidance for the year.”
“All else equal, we expect the market to remain cautious on an operational turnaround at ERO despite the headline beat - as it was driven more from accounting treatment of Tucumã (recognizing revenue for the quarter while capitalizing ramp-up costs). Confidence in a turnaround of operations (specifically at Tucumã) is imperative to ascribe more value to the pending FCF inflection point for the Company. Ero reiterated its 2025 operating guidance and highlighted that ramp-up at Tucumã remains on track for commercial production in H1/25,”
Mr. Nagle raised his target for Ero Copper shares to $23 from $21.50. The average is currently $24.54.
Elsewhere, other changes include:
* Canaccord Genuity’s Dalton Baretto to $26 from $26.50 with a “buy” rating.
“Our take: Neutral. Management had previously highlighted that Q1 was expected to be the weakest quarter of the year, with operational activities at each asset designed to ‘set the stage’ for increasing production over the rest of the year (more on this below). Copper production was in line with our estimate, while gold production was below our forecasts; that said, management has maintained all guidance for the year. Financial results for the quarter were far better than our estimates and consensus, but we attribute this largely to the accounting at Tucuma pre-commercial production, as a major portion of the operating cost was capitalized. Finally, following the $50 million restructuring of the RGLD stream announced on March 31, ERO’s liquidity appears sufficient, and the balance sheet seems poised to improve with increasing production over the rest of the year,” said Mr. Baretto.
* TD Cowen’s Craig Hutchison to $22 from $20 with a “buy” rating.
“Q1 earnings came in ahead of us and consensus, however, the beat was largely accounting related with a portion of the Tucumã costs being capitalized rather than expensed. We are somewhat surprised by [Tuesday’s] strong market reaction (up 11 per cent). We continue to expect a positive production and FCF inflection starting in H2/25, which underpins our BUY recommendation,” he said.
=====
National Bank Financial analyst Maxim Sytchev thinks Ag Growth International Inc.‘s (AFN-T) year is “progressing as expecting” and continues to see 2025 as a likely inflection point as the food and agricultural cycle moves “closer to the bottom.”
“We would have thought the stock would have experienced a bigger relief rally post the quarter but questions around working capital are telling in a way that leads to meagre FCF generation (at least in the short-term),” he said. “Ultimately, the shape of a farm recovery cycle will determine the share price directionality; for the time being, Farm expectation are subdued, creating a positive risk/reward dynamic at the current AFN share price. The stock has lagged its ag cohort on year-to-date basis (down 33 per cent vs. 8 per cent and up 1 per cent/down 5 per cent for the TSX/S&P 500, respectively); management of expectations is of course part of the story but year-over-year topline decline was still much less pronounced on Commercial strength.”
Shares of the Winnipeg-based farm machinery and equipment company rose 3.8 per cent on Tuesday after it reported first-quarter revenue of $287-million, down 8 per cent year-over-year but above both Mr. Sytchev’s $258-million estimate and the consensus forecast of $267-million as domestic performance jumped 66 per cent. Adjusted earnings per share came in at a loss of 26 cents, matching the Street’s expectation and easily beating the analyst’s projection of a 62-cent loss.
“Management’s outlook was consistent with post-Q4/24 commentary, and the reiteration of the more than $225-million EBITDA and 17-per-cent to 19-per-cent margin targets for the full year is a welcome sign of stability both operationally and in terms of investor expectations. While visibility for the North American Farm business remains limited, Commercial momentum is expected to persist for several years. Assumptions around government funding for U.S. farmers appear to be conservative, and the materialization of American Relief Act disaster fund flows would represent an incremental US$30-billion in subsidies over 2024 levels. While visibility remains limited, the typical peak-to-peak timeline of the North American ag cycle is 4 to 6 years, suggesting next year will be the start of an extended recovery. It is worth noting that the Farm order book was up 25-per-cent quarter-over-quarter, hinting at green shoots of a long-awaited turnaround.”
Mr. Sytchev also thinks the company’s “aspirational” $325-million through-the-cycle EBITDA target appears to be “a reassuring reference point” and notes leverage is likely to remain stable as working capital commitments are “moderated.”
“In addition to the expected (eventual) recovery in Farm and continued Commercial momentum, management believes that another $20-milllion in annualized EBITDA can be unlocked through further operational improvements including the implementation of the new ERP (likely a 2026/2027 event) and incremental facility rationalization (especially in India, where 5 or 6 sites could be rolled up into 1),” he said. “Longer-term, EBITDA-to-FCF conversion is expected to reach 30%, suggesting close to $6 / share in FCF on a go-forward basis.
“While the ramp-up of more large-scale Commercial projects will require more working capital, this is expected to be offset by an ongoing reduction in still-elevated dealer inventories and a potential monetization of receivables from the Brazilian Commercial business (Brazil Farm receivables were sold to a 3rd party last year). As such, leverage is likely to stay in the mid-3 times range next quarter before moderating to the low-3-times range towards the end of the year.”
Reiterating his “outperform” rating for Ag Growth shares, Mr. Sytchev raised his target to $51 from $49 after increasing his 2025 and 2026 margin forecast. The average is $47.63.
Elsewhere, other changes include:
* Desjardins Securities’ Gary Ho to $47 from $46 with a “buy” rating.
“We see early signs of North American farm normalizing as the ag cycle trends toward a cyclical trough,” he said. “While it is difficult to declare a win, we see decent risk/reward trade-offs at current levels. AFN’s mid-cycle analysis ($300–325-million EBITDA earnings power vs 2025 guidance of $225-million-plus) demonstrates significant potential upside over the medium term.”
* TD Cowen’s Michael Tupholme to $48 from $46 with a “buy” rating.
"While Q1/25 EBITDA was above consensus, AFN issued softer Q2/25 guidance. Still, FY2025 EBITDA guidance was reaffirmed. The Farm segment remains challenged, but encouragingly, mgmt. talked of potential ag cycle improvement in 2026. In the meantime, Commercial is growing strongly and has a solid outlook. We continue to be attracted to AFN’s long-term potential and the stock’s valuation," he said.
* ATB Capital Markets’ Tim Monachello to $43 from $46 with a “sector perform” rating.
“AFN offered a mixed outlook, with weak visibility for a recovery in upstream Farm demand, particularly for North America where Q1/25 revenue was down 49 per cent year-over-year amid a sharp cyclical correction, juxtaposed by a strong and resilient outlook for international Commercial demand supported by a healthy orderbook and bid pipeline. Despite a compelling upside opportunity in a scenario with a rebounding farm cycle coupled with momentum from AFN’s international Commercial segment, we believe the near-term upside is limited given weak visibility to a near- or medium-term rebound in global farm demand, and given AFN’s highly leveraged balance sheet that will weigh on FCF conversion. Overall, we reduce our adj. EBITDAS estimates by 3 per cent over our forecast horizon and reduce our price target,” said Mr. Monachello.
* CIBC’s Krista Friesen to $49 from $52 with an “outperformer” rating.
“Despite there still being a heightened level of uncertainty and a lack of visibility, particularly in North America, we thought AFN’s Q1 results were solid and are encouraged that the company maintained its guidance for the year. As we look out at the remainder of 2025, we are cautiously optimistic that there will be more tangible signs of an improvement in North America,” said Ms. Friesen.
=====
Following a first-quarter earnings miss, National Bank Financial analyst Adam Shine lowered his rating for TVA Group Inc. (TVA.B-T) to “underperform” from “sector perform” previously, citing ongoing industry pressures and “little traction from restructuring.”
“Broadcasting [is] still under pressure as advertisers continued to shift to digital and Film Production & Audiovisual services (MELS) saw less blockbuster activity,” said Mr. Shine. “Statements from the U.S. administration related to foreign movie production tariffs could fuel MELS instability in near term.”
For the quarter, the Montreal-based company reported quarterly revenues of $119.7-million, down 7.3 per cent year-over-year and under Mr. Shine’s $125-million estimate. An EBITDA loss of $20.5-million was also worse than expected (a loss of $19.3-milllion).
“Absent visible net savings from restructuring efforts over past 18 months and with uncertainty ahead related to MELS, we opted to be more conservative with our forecast updates,” he said.
After reductions to his forecast, Mr. Shine, currently the lone analyst covering the stock, dropped his target to 25 cents from $1.
=====
Following better-than-expected first-quarter 2025 results and a reiteration of its full-year forecast, Stifel analyst Martin Landry sees further room for upside in Pet Valu Holdings Ltd.‘s (PET-T) valuation.
"Pet Valu reported Q1/25 results which were slightly ahead of our expectations," he said. ”For the first time in four quarters, same-store-sales turned positive, which was welcomed by investors. While traffic continues to decline, the decline seems to have eased in recent months. Management maintained its annual guidance despite the economic uncertainty and indicated not seeing any weakness yet in consumer spending related to the tariffs concerns. This is a breath of fresh air for investors, and it speaks to the defensive nature of the pet industry.
“Shares of Pet Valu have rebounded rapidly from their low on April 8th and are up 25 per cent since then ... Pet Valu’s supply chain upgrade should be completed by year-end, providing the company with the infrastructure necessary to grow its network to 1,200 locations, up 45 per cent from current levels.”
The Markham, Ont.-based retailer rose 2.4 per cent on Tuesday after it reported revenue of $279-million, up 7 per cent year-over-year and above both Mr. Landry’s $278-million estimate and the consensus forecast of $275-million as wholesale merchandise jumped due to higher shipments to Chico franchisees. Adjusted earnings per share rose 3 per cent to 36 cents, exceeding expectations (35 cents and 34 cents, respectively) despite absorbing 4 cents in incremental new distribution centre-related expenses.
“Pet Valu expects Q2/25’s SSS [same-store sales] trajectory to remain similar to Q1/25, benefiting from a positive response to value offerings and price investments in Performatrin Prime, which took effect starting Q2/25,” said Mr. Landry. “However, the company anticipates Q2/25 EBITDA margin to erode by 100 bps sequentially due to the timing of specific projects and promotional plans, before progressively improving toward the end of the year. The improvement is expected to come largely from increased revenue driven by the benefits of the new promotional planning tool, starting in Q3, and new store openings.
“Pet Valu delivered record loyalty penetration in Q1/25, surpassing 2024’s levels when 85 per cent of sales where generated by loyalty members. As consumers continue to prioritize needs-based purchases and remain selective in discretionary products, Pet Valu sees its loyalty offering as a lever to capture market share. Loyalty members benefit from promotions such as the 13th bag for free, which are resonating well with customers. The goal is to convert casual customers (coming to the stores 1-2 per season) to customers with a monthly purchase cadence.”
With modest tweaks to his forecast, Mr. Landry raised his target for Pet Valu shares to $33 from $28.50, keeping a “buy” recommendation. The average is $34.07.
Elsewhere, others making target adjustments include:
* RBC’s Irene Nattel to $35 from $34 with an “outperform” rating.
“Q1 results a whisker above forecast as the Company leaned into the consumer value proposition, stepping up marketing/promo investments to drive share/loyalty against the backdrop of uncertainty/cautious consumer spending. Reiterated 2025 guidance with expectation of accelerating EPS growth late 2025/26. Pet Valu continues to appropriately manage the business to satisfy value- oriented consumer demand while leveraging benefits of prior period investments to enhance productivity and efficiency. Valuation toward the bottom of LT [long-term] range provides attractive entry point, in our view,” said Ms. Nattel.
* National Bank’s Vishal Shreedhar to $33 from $30 with an “outperform” rating.
“We hold a positive view on Pet Valu, reflecting its strong business positioning, attractive industry characteristics and high returns on capital,” he said. “We anticipate solid growth in revenue, EBITDA and FCF. We believe that PET’s shares can continue to gain traction as it demonstrates consistent execution against its promise of steady sales and profit growth.”
* Desjardins Securities’ Chris Li to $32 from $41 with a “buy” rating.
“Against a backdrop of macroeconomic turbulence, PET delivered solid 1Q results to start 2025. Management affirmed its 2025 guidance and, overall, there are no major changes to our view pre- and post-quarter. While near-term uncertainties will continue, we believe PET remains well-positioned to achieve low-double-digit EPS growth over the long term and expect easier comps and acceleration of earnings growth in 4Q to be catalysts for the stock.”
“We maintain our positive long-term view. Patience is required.”
* ATB Capital Markets’ Chris Murray to $40 from $39 with an “outperform” rating.
“PET delivered solid results, led by a recovery in same-store growth amid more challenging market conditions, reaffirming full-year guidance. While uncertainty surrounding the consumer remains elevated, we are encouraged by the improving same-store trends and expect franchise-led unit growth and the ongoing leveraging of supply chain investments to support margin and FCF trends going forward. We continue to see value in the name, particularly versus peers, and would remain buyers,” said Mr. Murray.
* TD Cowen’s Michael Van Aelst to $35 from $32 with a “buy” rating.
* Raymond James’ Michael Glen to $36 from $34 with an “outperform” rating.
=====
In other analyst actions:
* National Bank’s Vishal Shreehar lowered his Alimentation Couche-Tard Inc. (ATD-T) target to $81 from $86 with an “outperform” rating. The average is $84.07.
“Currently, key issues for ATD are that its merchandising approach is not delivering growth that investors have become accustomed to, the company is not repurchasing shares, meaningful management time is consumed with the Seven & i file, and there continues to be an overhang related to an equity issuance from a possible Seven & i deal,” he said. “We anticipate these issues to resolve over the near term. We model NTM [next 12-month] EPS growth of 12.3 per cent year-over-year.”
* JP Morgan’s Ken Worthington increased his target for Brookfield Asset Management Ltd. (BAM-N, BAM-T) to US$55 from US$51 with a “neutral” rating. Other changes include: TD Cowen’s Cherilyn Radbourne to US$66 from US$64 with a “buy” rating and Scotia’s Mario Saric to US$59 from US$58 with a “sector outperform” rating. The average is US$56.05.
“BAM is confident that 2025 fundraising should surpass 2024 and appears well-positioned to capitalize on a period of disclocation," said Ms. Radbourne. “BAM is overweight infrastructure/renewables/ transition and derives 100 per cent of its DE from FRE vs. more market-sensitive sources. We believe those attributes, plus the prospect of wider U.S. index inclusion in the near-term, support BAM’s outperformance vs. its peers year-to-date.”
* National Bank’s Matt Kornack bumped his BTB REIT (BTB.UN-T) target to $3.35 from $3.15, remaining below the $3.56 average, with a “sector perform” rating.
“BTB’s Q1 print was mostly in line with expectations as in-place occupancy sequentially increased,” he said. “We are still expecting an improvement over the year given commitments to date, possibly aided by lease-up of vacant space in the industrial segment where tenant activity is picking up on space that went dark in Q3. The REIT is looking to sell assets with the ultimate goal of achieving 60-per-cent industrial exposure but maintaining a diversified footprint. In the quarter, BTB bolstered liquidity through the issuance of a new series of convertible debentures, providing more financial flexibility.”
* Scotia’s Himanshu Gupta lowered his Colliers International Group Inc. (CIGI-Q, CIGI-T) target to US$155 from US$165 with a “sector outperform” rating. The average is US$163.29.
* National Bank’s Giuliano Thornhill moved his CT REIT (CRT.UN-T) target to $15.75 from $15.50 with a “sector perform” rating. The average is $15.94.
"CRT Q1 results were in line with our expectations,“ said Mr. Thornhill. ”When placed in the context of the broader market, continued steady results may keep units as a haven, and to this point, CRT announced at 2.5-per-cent distribution increase for the 12th consecutive year. A few details were provided on CRT’s potential involvement in CTC’s “True North” strategy, which may not be all that different from its last ‘Better Connected’ initiative. We will be reviewing CTC results, expected this Thursday morning, for any implications. What would be helpful from CTC would be additional square footage growth from either onsite intensification or store updates (500-600k sf during 2025), supply chain improvement plans and the potential role CRT could play in future acquisition/disposition plans. The latter has been a key deployment channel for CHP, and given CRT’s low leverage levels, may represent an accretive growth driver for the REIT."
* Scotia’s John Zamparo hiked his George Weston Ltd. (WN-T) target to $285 from $241 with a “sector perform” rating, while CIBC’s Mark Petrie increased his target to $296 from $268 with an “outperformer” rating. The average is $282.50.
“We find WN’s discount to sum-of-the-parts (SoTP) of 15.2 per cent enticing, but not quite far enough from the typical 14 per cent to lead us to prefer WN over L, particularly given the latter’s greater liquidity,” he said. “We expect macroeconomic conditions and worsening consumer sentiment to support L’s performance this year. WN is rated Sector Perform; we value WN using a 10-per-cent discount to SoTP of current prices of L and CHP.UN.”
* National Bank’s Jaeme Gloyn raised his Intact Financial Corp. (IFC-T) target to $341 from $336, exceeding the $304.38 average, with an “outperform” rating. Other changes include: Raymond James’ Stephen Boland to $330 from $302 with an “outperform” rating and TD Cowen’s Mario Mendonca to $349 from $328 with a “buy” rating.
“The EPS beat was primarily driven by strong underwriting, helped by modest upside surprises from investment and distribution income,” said Mr. Gloyn. “The consolidated combined ratio of 91 per cent beat the street at 93 per cent. Commercial Canada and Commercial U.S. highlighted the quarter, each with solid beats on current-year loss ratio and combined ratio. We also liked to see strong reserve development in these two lines in Q1-25 with the U.S. posting a solid reversal from unfavourable reserve development in Q4-24. We take this as a positive sign that corrective actions in the U.S. are working. Personal Auto and Personal Property missed slightly on a greater impact from severe weather losses (non-catastrophe). BVPS increased 4 per cent quarter-over-quarter (street 3 per cent) to $96.16 (street $95.01) and the operating ROE (LTM) of 16.5 per cent remains stable. Overall, a decent quarter that supports the premium valuation and continued upward trajectory in the share price. One nitpick is that growth in commercial lines continues to face competitive pressures across all geographies, which could prevent IFC from reaching mid-to-high single-digit industry growth rates expected in these segments. This doesn’t give us too much pause given the strong underlying current year and combined ratio performance in commercial lines, particularly in Canada and the U.S. - a sign of management’s prudent approach to achieve profitable growth.”
* Stifel’s Ralph Profiti bumped his target for Kinross Gold Corp. (K-T) to $24.50 from $23.50 with a “buy” rating. The average is $24.83.
* ATB Capital Markets’ Chris Murray raised his Mainstreet Equity Corp. (MEQ-T) target to $225 from $220 with a “sector perform” rating. The average is $237.50.
“MEQ delivered another strong quarter, with healthy rental dynamics in core markets and increased stabilization rates driving mid-teens FFO/share growth, offsetting the trending increase in vacancy rates in several core markets,” he said. “M&A activity remained notably below trend, although transaction levels appear to have normalized in early Q3/FY25 with MEQ adding 182 doors. Management remained constructive on its outlook for FY2025, with low vacancy levels, improving stabilization rates, and regular mark-to-market adjustments all supportive of sustained NOI growth, with opportunities for densification and redevelopment offering optionality and potential upside over the longer-term. While MEQ remains positioned to capitalize on favourable rental market dynamics and M&A, moderating industry valuations, combined with evidence of normalizing rental market conditions in Western Canada, keep us neutral on the name.”
* Canaccord Genuity’s Mark Rothschild cut his RioCan REIT (REI.UN-T) target to $19 from $19.50 with a “hold” rating. Other changes include: CIBC’s Dean Wilkinson to $20 from $22 with an “outperformer” rating, Desjardins Securities’ Lorne Kalmar to $20 from $22 with a “buy” rating and Scotia’s Mario Saric to $20.50 from $21.50 with a “sector perform” rating. The average is $20.30.
“While the stock has been under pressure on the back of the HBC CCAA filing, 1Q was a good reminder of why we continue to like the name,” Mr. Kalmar said. “SP NOI [same-property net operating income] rebounded to 3.6 per cent, leasing remained very robust and the REIT made some meaningful progress on both the condo closing front and the sale of its RioCan Living assets. Despite the HBC overhang and its impact on OFFO growth, we view the current valuation as very compelling, particularly as we expect REI to realize meaningful catalysts over the balance of 2025.”
* Canaccord Genuity’s Aravinda Galappatthige raised his target for TMX Group Ltd. (X-T) to $58 from $52 with a “buy” rating, while Scotia’s Phil Hardie bumped his target to $57 from $56 with a “sector perform” rating. The average is $55.63.
"Following a strong run and the stock trading at a relative premium to its closest peer, we think the bar was set high heading into the release of TMX’s first quarter results,“ said Mr. Hardie. ”The quarter was characterized by strong EPS growth driven by a robust top line, with strong growth trends echoing momentum seen through much of 2024. That said, with valuation levels likely leaving limited room for error, we think the higher-than-expected expense growth curbed some near-term investor enthusiasm. We think the bulk of the unexpected rise in expenses was transitory in nature but expect investors to take a ‘wait and see’ approach.
* Raymond James’ Brian MacArthur increased his Triple Flag Precious Metals Corp. (TFPM-T) target to $34 from $33.50 with an “outperform” rating. The average is $33.99.
“We believe TFPM’s high-margin, scalable business model offers investors exposure to precious metals while mitigating risk. Triple Flag has a high-quality, diversified asset base with a favourable mine life and jurisdictional risk. The company also has near-term growth, longer-term growth optionality, as well as a strong balance sheet to support future investments and its dividend,” said Mr. MacArthur.
* Scotia’s Jonathan Goldman raised his Wajax Corp. (WJX-T) target to $23.50, exceeding the $22.38 average, from $22 with a “sector perform” rating, while TD Cowen’s Patrick Sullivan moved his target to $24 from $21 with a “buy” rating
“Q1 was a really strong quarter, including solid execution on new equipment deliveries (including one extra mining shovel that was not in backlog or our model), HSD% [high-single digits] product support growth (admittedly a low bar), and strong cost control (SG&A flat year-over-year on 15-per-cent top-line growth),” said Mr. Goldman. “Internal initiatives to improve margins are blunting the impact of lower equipment, ERS, and rental margins. But, we have a hard time squaring the circle between results and macro. OEM/peer commentary has focused on market uncertainty leading to cautious end-customer demand and activity levels. The company’s own outlook (largely unchanged from 4Q) mentions that ‘headwinds are expected to persist, with broader market conditions remaining soft and continued uncertainty surrounding tariffs’.”