Inside the Market’s roundup of some of today’s key analyst actions
Scotia Capital analyst Konark Gupta sees Bombardier Inc. (BBD.B-T) “firing on all cylinders after a lacklustre Q1 order intake” and calls Monday’s announcement of a “significant order win” for 50 of its Challenger and Global aircraft, alongside a service agreement, valued collectively at US$1.7-billion “the icing on the cake ... which boosts our confidence in management’s near-term and long-term outlook.”
Accordingly, after hosting an investor tour of its new state-of-the-art Global Manufacturing Centre by the Toronto Pearson airport, Mr. Gupta raised his recommendation for Bombardier shares to “sector outperform” from “sector perform” previously “after staying on the sidelines for eight months as demand appears to be rebounding with the tariff noise dissipating.”
“During our tour last week, management reminded that demand was weaker than usual in Q1 (orders down 35 per cent year-over-year; book:bill 0.9 times) due particularly to uncertainty facing customers ahead of the Liberation Day,” said the analyst. “However, activity has normalized since then as the tariff noise has settled down, which became evident from the latest firm order worth $1.7-billiob from an unknown first-time customer for 50 jets along with a first-of-a-kind service agreement (total more than $4-bilion including options). This firm order alone equates to 1.4 times book:bill in Q2, assuming it adds to the Q2 backlog, before factoring in undisclosed orders. Further, the order will be delivered from 2027 onward, which addresses our concern about cycle risk given the backlog exiting Q1 largely covered 2025-2026 deliveries. Management doesn’t seem concerned about competition from Gulfstream’s G800/G400 and the delayed Falcon 10X. BBD also noted the higher-margin aftermarket and defense businesses are tracking to its 2030 revenue targets of $2.8-$3.9-billion (5-11-per-cent CAGR vs. 2024) and $1.0-$1.5-billion (likely 2-3 times vs. 2024), respectively.
“We now expect, conservatively, aftermarket to exceed $2.2B revenue this year (8-per-cent-plus year-over-year growth), driven by larger installed base, rising utilization of jets, BBD’s expanded capacity and market share, etc. Defence is also gaining momentum with a recent firm order for two aircraft from Saab and new collaboration deals with Safran and Leonardo. We believe Canada’s latest pact with NATO to spend 5 per cent of GDP on defence by 2035 should further move BBD toward its 2030 objectives.”
Also applauding the Montreal-based company’s “relentless focus on deleveraging,” Mr. Gupta raised his target for Bombardier shares to $150 from $105. The current average on the Street is $121.29, according to LSEG data.
“We view Bombardier as a growth, margin expansion and deleveraging story against a positive backdrop of strong bizjet demand and low pre-owned inventory levels,” he said. “Since assuming the company leadership five years ago, the current management team has executed better than expected across all objectives, particularly balance sheet deleveraging. We believe the company is much better positioned in this cycle than prior downturns with no exposure to macro-sensitive small-cabin bizjets, fast-growing higher-margin revenue streams (aftermarket and defense), solid backlog of high-quality orders, significantly improved FCF power, highly disciplined capital allocation strategy, stronger balance sheet, and well-balanced debt maturity curve.”
Elsewhere, BMO’s Fadi Chamoun hiked his target to $150 from $130, maintaining an “outperform” rating.
“The business aviation cycle remains on firm footing and the recent significant order for 50 aircraft announced on June 30 further solidifies the outlook. We also note that the Defense market is very robust and supportive of continued strong demand going forward. We are raising our FCF forecast modestly and shifting our valuation base forward (H2/26 + H1/27), which supports upside to $150,” he said.
While ATB Capital Markets analyst Chris Murray expects GFL Environmental Inc. (GFL-T) to report “strong” second-quarter results on July 30, projecting mid-single-digit price-led growth, he has lowered his margin outlook for second half of 2025 to “better reflect the anticipated impact of lower recycled commodity and RIN [renewable identification numbers] pricing and the stronger Canadian dollar.”
“ATB estimates remains in-line with guidance for Q2/25 and 2025, and we expect the latter to be revised upwards at Q2/25 given M&A completed in H1/25,” he said. “We expect to get an update on the price/volume outlook as well as capital allocation given the active M&A environment, recent buyback activity, and strategic options surrounding Green Infrastructure Partners (GIP) with Q2 results. We remain constructive on GFL heading into H2/25, particularly with the improving margin profile and late-cycle dynamics, acknowledging the discount to peers has narrowed significantly over the past 12 months.”
In a client note released before the bell, Mr. Murray said he’s projected revenue of $1.675-billion, up 5.9 per cent year-over-year and adjusted EBITDA of $507.1-billion, both falling in-line with GFL’s guidance and the consensus expectations on the Street. He attributed the growth to “favourable pricing conditions (up 5.0 per cent year-over-year) and stable volumes (up 0.5 per cent year-over-year.”
“We have lowered ATB estimates for H2/25 to reflect the stronger Canadian dollar (approximately 70.0 per cent of revenue is U.S.-based) and softer recycled commodity and RIN prices,” he added. “Our revised full year margin estimate of 29.8 per cent (prior/consensus: 30.4 per cent/29.8 per cent) implies 100 basis points of year-over-year margin expansion (in line with guidance), with the reduction (vs. prior ATB estimates) reflecting the decremental impact of lower recycling values. We expect full-year guidance to be revised higher with Q2/25 results given M&A activity in H1/25.
“We expect to receive an update on GIP after a potential sale involving GFL’s 45.0-per-cent stake was cited in recent media reports. Management previously cited a path to $300-million in annualized EBITDA by Q4/25 (currently $225-million) based on the GIP M&A pipeline. With U.S. peers trading at 12-16 times EBITDA and assuming the asset is 6.0 times levered, we estimate that the sale of the 45.0-per-cent interest could surface $1.1-billion in pre-tax proceeds to GFL ($2.80 per share), which would likely be redeployed into M&A and/or RNG/EPR-based investments.”
While he maintained his “outperform” rating for GFL shares, Mr. Murray lowered his one-year target to $78 from $80 in response to his lower estimates. The average target on the Street is $71.19.
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Barrick Mining Corp. (B-N, ABX-T), Brookfield Corp. (BN-N, BN-T) and RB Global Inc. (RBA-N, RBA-T) were added to RBC’s “Top 30 Global Ideas” list on Monday.
Cameco Corp. (CCO-T) and GFL Environmental Inc. (GFL-N, GFL-T) were among the stocks removed.
“Our Top 30 Global Ideas list remains one of high-conviction, long-term ideas with quarterly updates that enable dynamic changes into names where we see higher- conviction upside potential,” the firm said. “Over the past quarter, the Q2/25 Top 30 list delivered a total return of 14.9 per cent in USD terms, above the MSCI World Index at 11.5 per cent. The best-performing Top 30 stock selections for Q2/25 were Cameco (up 80.3 per cent), GE Vernova (up 73.5 per cent) and Carvana (up 61.2 per cent). Since inception of our quarterly list at YE2019, the Top 30 has delivered a total compound annual return of 14.7 per cent, above the benchmark at 11.9 per cent.”
For Barrick, RBC said: “In Materials we add Barrick Mining (B US) and DuPont (DD US). Following multi-year headwinds, Barrick’s valuation has compressed to an unusually large discount to peers, and we see deep value in the shares. As published in our recent in-depth report on Barrick, while specific catalysts for upside are uncertain (potentially requiring patience through a heavy investment period to 2028 or an unexpected strategic pivot), we believe valuation has disconnected from the underlying business and our analysis suggests a favorable risk/reward proposition. We view execution, buybacks and a supportive gold price environment as critical to drive returns.”
Analyst Josh Wolfson has an “outperform” rating and US$26 target. The average target on the Street is US$24.93.
For Brookfield Corp., RBC said: " For Q3/25, in Financials we add Brookfield Corp. (BN US) and Moody’s (MCO US). We view Brookfield Corp. as a core holding with a strong history of compounding capital, and future NAV growth potential driven by ample liquidity available to deploy in the current market environment, and its stake in Brookfield Asset Management. As noted in our recent in-depth report, BN’s attractive valuation offers an entry point into a leading franchise poised to benefit from increasing carried interest realizations and the expansion of its Wealth Solutions business."
Analyst Bart Dziarski has an “outperform” rating and US$81 target. The average is US$67.
For RB Global, RBC said: “In Industrials we add RB Global (RBA US), which has made significant progress toward integrating the IAA acquisition, evidenced by customer wins, EBITDA margin improvement, and leverage reduction. Its legacy platform also stands to benefit if the macro softens, with potential for further upside from increased cross-selling of high-margin ancillary services over time. In our view, RBA shares appear attractively valued compared to historical and peer multiples. We switch out of GFL Environmental (GFL US) while maintaining an Outperform rating.”
Analyst Sabahat Khan has an “outperform” rating and US$125 target. The average on the Street is US$113.50.
The firm said it removed Cameco [“outperform” and $100 target] ”following strong share price appreciation over the past quarter.
“Nevertheless, we reiterate our positive long-term investment thesis as Cameco maintains tier 1 assets across the nuclear value chain, nuclear industry momentum continues to accelerate, and uranium markets remain very tight,” he said.
Other TSX-listed stocks on the list are: Alimentation Couche-Tard Inc. (ATD-T, “outperform” and $94 target); Canadian Pacific Kansas City Ltd. (CP-T, “outperform” and $127); Constellation Software Inc. (CSU-T, “outperform” and $5,700) and Pembina Pipeline Corp. (PPL-T, “outperform” and $62).
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Citi analyst Scott Gruber sees “several positive catalysts” appearing on the horizon for Ovintiv Inc. (OVV-N, OVV-T) in the second half of 2025 that could drive its stock to outperform" peers.
“These include 1) a reduction in Montney maintenance capex following deal cost synergy capture 2) potential upside to Permian production in 2q and full year above management guidance at 120kbpd 3) LNG Canada start-up driving improvement in Canadian gas realizations and volumes as line pressure alleviates and 4) potential progress on data center development in Alberta as AESO seeks to accommodate large load requests per recent public comments,” he said.
“We think several of the above manifesting in 2H’25 could drive differentiated performance for OVV. We maintain our buy rating and take a positive short term view on the stock.”
In a research note, Mr. Gruber reviewing meetings with the Denver-based petroleum company ahead of the release of July 28 release of its second-quarter financial results.
“[We note] the following takeaways (1) 2Q operations appear to be running smoothly (no material impact from western Canadian wildfires) and results should be in-line with guidance, fiscal 2025 guidance remains unchanged (2) Management has been highlighting the resiliency of the portfolio against the backdrop of low oil prices – still forecasting $1.5-billion of FCF at $60 WTI and $3.75 HH (3) OVV resumed share repurchases in 2Q (4) anticipated power/data center growth (in Alberta, especially) presents a future catalyst for OVV’s Montney gas asset,“ he said. ”Additionally, we publish an updated model marked-to-market for 2Q and estimate CFPS of $3.22."
With his “buy” rating, Mr. Gruber reiterated a US$54 target for its shares. The average is US$52.19.
“We believe its portfolio is underappreciated (particularly the Montney) and believe it is advantaged due to its gas weighting (50% of production), especially as gas markets are poised to tighten in FY2025,” he said. “This not only would improve CF, but also could spur better appreciation for OVV’s Montney position. Furthermore, we find OVV trading attractively relative to its inventory life in part due to a heavier discount on its Canadian gas position.”
Elsewhere, Goldman Sachs’ Neil Mehta upgraded Ovintiv to “buy” from “neutral” with a US$51 target, rising from US$47, seeing it trading at “a meaningful discount relative to larger-cap diversified E&P peers.” He projects a potential upside of 32.77 per cent from its current price, driven by strategic shifts and potential natural gas price increases.
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In a research report previewing second-quarter earnings season for North American energy services providers titled Recommend Adding Selective Risk, ATB Capital Markets analyst Waqar Syed thinks the market has entered “the bottoming phase.”
“The Q1/25 earnings season was marked by high uncertainty regarding the impact of tariffs, the price at which WTI would bottom, and the macro-economic outlook,“ he said. ”Although uncertainty hasn’t completely gone away, the set up is much better for Q2/25. Energy Service stocks are closer to their troughs, and the view on WTI is that it settles around $60-$65/bbl, and may not lower to $55/bbl level. We recommend adding selective risk through the upgrade of SLB [Schlumberger NV] to OP. .... Furthermore, while risk of additional near-term cuts in Saudi activity exist, by year-end Saudi may start raising activity again. Moreover, SLB offers ‘Alpha’ opportunities and catalysts.
“U.S. Land Rig Count May Be Bottoming: Relative to Q1/25 average of 572 U.S. land rigs, the rig count is down by about 39 rigs. At the time of U.S. E&Ps’ Q1/25 earnings calls, their guidance implied a 40 rig decline, and we are close to that figure. Another 10 or so rigs may drop, but July may mark the bottom in the US rig count, unless customer budget exhaustion leads to further cuts in Q4/25. But any budget related cuts should hit completion activity more. However, our key worry with US services remains rising drilling/completion productivity gains, which continues to reduce demand for rigs and pumping crews.”
Mr. Syed recommends investors “add some international to the mix.”
“We have been recommending Canada leverage over the US, and we reiterate that view,” he said. “We believe that if WTI stays at the $60-$65/bbl level over the next 18 months, which the futures market projects, international activity (especially offshore) and Middle East natural gas should positively respond earlier than the US. In our view, efficiency gains continue to negatively impact demand for U.S. energy services.”
“Our favorite stocks are FTI, SLB and TCW-T for the earnings season. Our Q2/25 EBITDA/EBITDAS estimates are most below consensus for PD-T, ESI-T, HAL, NOV and PTEN. We are above consensus for TCW-T and CFW-T.”
The analyst made one target adjustment to TSX-listed stocks in his coverage universe, trimming Precision Drilling Corp. (PD-T, “outperform”) to $84 from $87. The average is currently $101.81.
“PD-T’s Canadian rig activity has been running below prior forecast, owing to the impact of wildfires, and the rig activity recovery has been at a slower pace than expected,” he said. “Canadian well service activity has also been below prior forecast. Moreover, while PD-T’s active U.S. rig count has increased to 35 rigs versus 30 rigs on March 31, 2025, we suspect that the increase has come at the cost of margins, and we project daily cash drilling margins of around US$7,500/rig-day for the remainder of 2025.
“What To Look For in the Quarter? We are especially interested in PDT’s U.S. drilling margins in Q2/25 and its forward guidance to dissect the reasons for its market share gains.”
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In other analyst actions:
* Barclays’ Ian Rossouw raised his First Quantum Minerals Ltd. (FM-T) target to $25.80 from $21.60 with an “overweight” rating. The average is $22.67.
“We are constructive miners, with upside risks seen to copper and ali prices, stability in iron ore, positioning still very light, a weakening USD and expectations growing for a Fed easing cycle. Preferred OW names are AAL, NHY and FM,” he said in a report.
* Citing “incremental optimism” in wireless and believing its sports asset “provide upside,” BMO’s Tim Casey moved his target for Rogers Communications Inc. (RCI.B-T) to $57 from $55 with an “outperform” rating. The average is $50.54.
“The wireless pricing environment appears to be improving (becoming less negative) with operators raising prices in April and largely maintaining those levels through the quarter,” he said. “Modest Cable revenue growth should return for the balance of 2025E. The $7-billion structured equity transaction was completed and the MLSE transaction is expected to be finalized soon. Rogers’ sports assets provide significant upside potential. We made modest increases to our forecasts with a marginal decrease in wireless effectively offset by Cable and Media.”
* Mr. Casey also raised his Telus Corp. (T-T) target to $24 from $23 with an “outperform” rating. The average is $22.24.
“The wireless pricing environment appears to be improving (becoming less negative) with operators raising prices in April and largely maintaining those levels through the quarter. The CRTC’s recent wholesale fibre decision is a tailwind for TELUS given relative legacy network scale and bundling capabilities. Deleveraging is a key focus. We expect a tower sale in the near term. TELUS is looking to reacquire the remaining stake of TELUS Digital it does not currently own. We made modest adjustments to our forecasts with increases in Health largely offset by Ag and TELUS Digital,” he said.