Inside the Market’s roundup of some of today’s key analyst actions
While acknowledging its shares have materially re-rated upwards recently, RBC Dominion Securities analyst Paul Treiber thinks Celestica Inc.’s (CLS-N, CLS-T) valuation premium is likely to be “sustained in light of strong growth and improved revenue mix.”
Shares of the Toronto-based manufacturer soared 16.9 per cent on Tuesday, seeing its market capitalization edging ahead of CGI Inc. to become the third-largest technology company in the country, after it reported significantly higher revenue and profits than expected in the second quarter ended June 30. Celestica stock has now more than doubled in value this year and is up 18-fold since the end of 2022.
“With Q2 results, Celestica reported its strongest beat and raise in more than two years due to robust demand from hyperscalers,” said Mr. Treiber. “Guidance remains conservative, which suggests potential upside, in our view.”
Citing strong demand from hyperscalers, Celestica raised FY25 revenue guidance to US$11.55-billion from US$10.85-billion, which is a gain of 20 per cent year-over-year. Adjusted earnings per share guidance jumped to US$5.50 from US$5, a jump of 42 per cent. Both exceed the Street’s prior estimates (US$10.99-billion and US$5.08, respectively).
“Celestica has ‘high confidence’ in its guidance, as customer orders exceed guidance,” the analyst said. “This suggests upside is likely, in our view. Celestica is seeing market share gains in high-performance networking (due to robust 800G demand at hyperscalers), with revenue from Celestica’s largest customer accelerating to 17 per cent year-over-year Q2 from down 1 per cent Q1. In 2H, 800G volumes are likely to exceed 50 per cent, while Celestica’s next-gen AI/ML custom compute contract is likely to drive a return to positive growth in CCS Enterprise Q4.”
Mr. Treiber also emphasized Celestica has “visibility to customer demand for the next 12 months and sees continued robust growth through at least 1H/FY26.”
“New 1.6T switch programs and the large contract with a ‘digital native’ customer are expected to ramp in late FY26 and through FY27, while management expects ATS to return to 10-per-cent growth in FY26 (vs. flat in FY25),” he noted.
That led him to raise his fiscal 2026 estimates to revenue of US$13.3-billion and adjusted earnings per share of US$6.35 (from US$13.1-billion and US$6.20). His 2027 projections increased to US$15.8-billion and US$7.75 from US$15.7-billion and US$7.58.
“Celestica is seeing increasing breadth and market share with hyperscaler customers in both its networking and enterprise segments,” he said. “For example, all of Celestica’s 400G customers have turned into 800G customers. Momentum reflects Celestica’s execution at scale, best-in-class designs and geographic footprint. Celestica’s improving mix is driving record margins; Q2 adj. EBIT margin rose 110 basis points year-over-year to an all-time high of 7.4 per cent.”
Believing Celestica’s premium valuation is “likely to be sustained,” Mr. Treiber hiked his target for Celestica shares to US$225 from US$185, keeping an “outperform” rating. The average target on the Street is US$176.61, according to LSEG data.
Elsewhere, other analysts making target adjustments include:
* Canaccord Genuity’s Robert Young to US$240 from US$126 with a “buy” rating.
“Celestica reported a stellar beat and raise quarter with record operating margins,” said Mr. Young. “Demand continues to grow for HPS networking gear (better-than-expected 400G volumes alongside ramping 800G networking programs) from hyperscale customers, which has fuelled margin expansion and earnings growth demonstrated in the Q2/25 results ahead of expectations across all key metrics. More importantly, management reaffirmed strong demand and visibility out to 2026, underscored by a significant increase to F25 guidance across revenue, EPS, and FCF. In H2, the enterprise segment is expected to re-accelerate as a sole-source next-gen AI/ML compute system ramps alongside additional programs in rack integration and custom hardware. While ATS is tracking to muted revenue (down low single digits) for the year after a low margin program disengagement, management highlighted stability across industrial and capital equipment and a return to the previously targeted 5-6-per-cent adj. OM profile. We continue to view Celestica as a key beneficiary of investment in AI-related infrastructure, with increasing design content supporting ODM program wins, expanding share of hyperscaler and digital native infrastructure spend, and growing exposure to full rack and system-level integration.”
* JP Morgan’s Samik Chatterjee to US$225 from US$170 with an “overweight” rating.
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Scotia Capital analyst Konark Gupta thinks the 12.3-per-cent drop in Air Canada’s (AC-T) share price following its quarterly release as well as the presence of free cash flow upside present a “more attractive” opportunity for investors.
"Although our sentiment has improved, the stock pulled back materially [Tuesday] (down 12 per cent), its worst earnings reaction in a long time," he said. “We attribute the decline to four factors: (1) stock was up 50 per cent during Q2, so there could be profit-taking; (2) the market may not be liking the Q3 setup with RASM [revenue per available seat mile] expected to be down slightly and CASM [cost per available seat mile] inflation expected to peak, although this is not new news; (3) investor caution about ongoing flight attendant negotiations; and (4) a view that management is lacking confidence which is why it didn’t raise FCF guidance.
“Current EV to EBITDA multiple has fallen to 3.1 times (based on 2025 guidance mid-point) vs. U.S. peers at 5.5 times, a five-fold discount to the normal 0.5 times (pre-pandemic), which is unjustified in our view even with AC’s high capex intensity.”
After the airline’s results fell in line with expectations and continued to beat FCF expectations, Mr. Gupta said he is “growing more confidence” in its EBITDA guidance, pointing to its first-half results, second-half outlook, and his fuel and fuel exchange assumptions.
“AC plans to ramp up capacity growth to 3.25-3.75 per cent in Q3 and 2.5-3.0 per cent in Q4, implying 2 per cent plus in 2025, as it takes delivery of 15 narrow-body jets and one widebody jet this year (minus seven retirements),” he said. “Still, it expects relatively stable yields in Q3 given continued positive demand. Overseas travel demand remains strong into year-end as well as early 2026, driven by Atlantic, Pacific, and sun markets. Peak summer bookings are extending into early November, particularly for Southern Europe, as travellers take advantage of better weather and off-peak demand. Pacific yields continue to soften year-over-year due to increased competitive capacity, particularly from China/HK, partially offset by strength in Japan, Korea, Taiwan, and Australia. However, AC expects y/y RASM pressure to lessen into late Q3 and Q4 as it laps high capacity comps. Transborder and Domestic markets are expected to be relatively stable in 2H. AC maintains flexibility to adjust Transborder capacity upward or downward, subject to demand evolution. With the A220 deliveries resuming, management expects positive momentum in sixth freedom traffic into late Q3 and Q4, aided by tweaks to hub airports. Corporate demand was strong in May and June after a softer April (Easter) and is expected to sustain strength into the fall.”
Reiterating his “sector outperform” rating for Air Canada shares, Mr. Gupta raised his target to $27 from $24. The average is $25.55.
Elsewhere, others making changes include:
Elsewhere, Canaccord Genuity’s Doug Taylor to $28 from $27 with a “buy” rating.
“Air Canada reported Q2 results [Tuesday] with EBITDA in line with our estimates and guidance for F25 largely unchanged,” he said. “We were somewhat surprised that the carrier’s outlook wasn’t raised given 1) 3-per-cent-plus capacity growth expectations for H2, 2) stronger-than-expected FCF in H1, and 3) stabilizing yields. In our view, AC is acting out of conservatism, reserving the option to tighten its guideposts in Q3. In terms of underlying metrics, we feel incrementally constructive on the demand picture with transatlantic strength helping offset waning demand for CA-US travel. We were also impressed by AC’s 5-per-cent growth in premium revenue, with the segment now making up 31 per cent of passenger revenue. On the other hand, AC’s margins were a bit disappointing, with 16 per cent year-over-year labour cost growth hampering profitability. Overall, we view the sell-off [Tuesday] (down 12 per cent) as overdone. We continue to view AC’s current valuation as attractive given its position in the Canadian market, solid balance sheet, and improving summer demand metrics. We maintain our BUY rating and increase our target to $28.00, from $27.00, on slightly elevated capacity estimates.”
* ATB Capital Markets’ Chris Murray to $32 from $31 with an “outperform” rating.
“While revenue came in ahead of ATB estimates, reflecting better-than-expected yields and contributions from cargo and vacations, unit costs (ex. fuel) exceeded expectations, leading to the small EBITDA miss,” he said. “We believe [Tuesday’s] sell-off was overdone given the underlying results and outlook and reflects noise surrounding consensus EPS. Management reaffirmed full-year guidance and was constructive on H2/25 yield, load factor, and capacity trends, highlighting strength in premium cabin and off-peak booking trends to Europe. Leverage remains low at 1.4 times, providing flexibility around capital allocation heading into H2/25. We continue to see significant value in AC shares and view the post-earnings weakness as a buying opportunity.”
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After a “strong” underwriting performance drove a strong second-quarter earnings beat, Intact Financial Corp. (IFC-T) “remains well positioned to benefit from still favourable conditions across most segments in the P&C Insurance industry through 2025 while continuing to deliver solid profitability in lines facing modestly increasing premium growth headwinds,” according to National Bank Financial analyst Jaeme Gloyn.
On Tuesday post-market, the Toronto-based insurance company reported operating earnings per share of $5.23, a 30-per-cent beat on the consensus estimate of $4.02, and also topping Mr. Gloyn’s $4.22 forecast.
“The EPS beat was entirely driven by strong underwriting helped by favourable weather condition,” he explained. “The consolidated combined ratio of 86 per cent easily beat the street at 91.5 per cent. Personal Property and Commercial Canada highlighted the quarter, each with massive beats given benign catastrophe activity, but also on current accident year losses. Personal Auto delivered a solid 90-per-cent combined ratio (beating the street) while Commercial U.S. reported another sub-90-per-cent combined ratio and improvement in the current-year loss ratio (a sign that corrective actions are flowing through nicely). IFC continues to deliver upside surprises on reserve development, reaffirming our view of the company’s strong underwriting practices. BVPS [book value per share] increased 3 per cent quarter-over-quarter (street 2 per cent) to $98.67 (street $98.35) and the operating ROE (LTM) of 16.3 per cent remains stable.
“Overall, a solid 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, driving IFC to reduce their outlook for industry growth. We’re not overly concerned given the strong profitability on display across all segments.”
Mr. Gloyn also reiterated his view that Intact “merits a premium valuation given the track record of consistent execution to deliver 10-per-cent EPS growth and to outperform its competitors on ROE.” That led him to increase his target for its shares to $352 from $350, keeping an “outperform” rating. The average target is $329.46.
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As it prepares to release its second-quarter results on Aug. 6, National Bank Financial analyst Vishal Shreehar thinks Premium Brands Holdings Corp. (PBH-T) is set up for strong sales growth through the second half of the year, expecting "momentum to accelerate."
“We expect good sales growth in Q2/25 (11 per cent year-over-year), before accelerating in H2/25 (16 per cent year-over-year) aided by capacity and certain large programs (2025 sales guidance of $7.2-$7.4-billion; NBF is $7.4-billion and cons. is $7.3-billion,” he said in a client note. “Raw material costs are expected to be a margin headwind in Q2/25; however, this is expected to be a timing issue (price increase catch-up and expectations for commodity costs stabilization/some easing). NBF models EBITDA margin contraction of approximately 40 basis points in Q2/25.
“Our review of commentary from select food operators/distributors point to: (i) ongoing pressure from input cost inflation, (ii) continued consumer search for value, and (iii) incremental improvements in the industry backdrop, albeit the backdrop remains challenged.”
Mr. Shreedhar is currently projecting quarterly revenue for the the Vancouver-based specialty foods company of $1.887-billion, up from $1.703-billion during the same period a year ago and narrowly higher than the Street’s expectation of $1.868-billion. He expects EBITDA to grow by $10-million year-over-year to $175-million, matching the consensus.
“Specialty Foods (SF) is expected to be primarily driven by organic growth in the U.S. (promotional activity, facilities expansion supporting U.S. protein, sandwich and bakery, etc.) and acquisition contribution,” he said. “These factors are expected to be partly offset by consumer pressure and higher commodities prices (notwithstanding favourable mix, better capacity utilization and operational efficiencies).
“Raw material costs are expected to be a margin headwind in Q2/25, particularly related to beef and poultry (which constitute 15 per cent and 6 per cent of 2024 sales, respectively); however, this is expected to be a timing issue (price increase catch-up and expectations for commodity costs stabilization/some easing).”
With modest adjustments to his forecast, Mr. Shreedhar increased his target for Premium Brands shares to $99 from $97, keeping a “sector perform” rating. The average is $105.31.
"Over the medium term, we believe PBH’s outlook will be supported by organic growth and EBITDA margin expansion (to 9.4 per cent in 2025; 20 basis points higher year-over-year); we continue to monitor execution,“ he said. ”PBH currently trades at 9.9 times our NTM [next 12-month] EBITDA, below the five-year average of 12.5 times."
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In a research report titled Mindset Shift: From ‘Concerns’ on 2025 to Prospects for Strong Growth in 2026, National Bank Financial analyst Michael Doumet admitted Secure Waste Infrastructure Corp.’s (SES-T) second-quarter results came in “soft,” however he emphasized there is "no more ‘worst case’ scenario for 2025."
"To us, the main story is that SES maintained its 2025E EBITDA guidance, despite apparent headwinds,“ he said. ”Given we can count more incremental headwinds than tailwinds, we still expect 2025 EBITDA to come in at the low-end of the guidance range (and for the low-end to be reliant on a strong 4Q). That said, while uncertainties remain into the 2H, we believe the fact that SES did not have to cut its guide means two things: it (i) removes the worst-case scenario for the guide (a cut below more than $490-million, which we believe some investors were concerned about) and (ii) demonstrates the overall durability of the business in a challenged macro (worst case is more than $500-million?).
Shares of the Calgary-based company, which specializes in oilfield waste treatment and disposal, slid 2.9 per cent on Tuesday despite a quarter-over-quarter rise in sales. The investor concern came largely from a miss on earnings before interest, taxes, depreciation and amortization ($110-million, narrowly under both Mr. Doumet’s $111-million estimate and the consensus projection of $112-million) due largely due to the non-repeat of the storage opportunities related to the opening of the Trans Mountain pipeline expansion.
“SES indicated the impact from tariff-related headwinds to its metal recycling segment was primarily felt in June (a ‘few million’ to EBITDA) and is expected to drag into 3Q and much less so into 4Q as the company readjusts its deliveries into the U.S. (and/or sources lower-priced inventories),” the analyst said. “Aside from that, overall wastes volumes were strong despite a minor impact from forest fires.”
Believing “the re-rate is unfinished" and its shares “warrant a higher multiple than that reflected currently (or historically),” Mr. Doumet raised his target for Secure shares by $1 to $18.50, keeping an ”outperform” rating, The average is $17.60.
"At the low-end the 2025 EBITDA guide implies to EBITDA growth of 14 per cent in the 2H," he explained “Incrementally, management indicated that they expect to ‘deliver consistent volume growth and robust EBITDA contributions from [its] organic capital program will into 2026 and beyond’. Put together, the easy comp in the 1H26 (due to depressed metal recycling EBITDA in the 1H25) and the incremental EBITDA from its capital program provides a line of sight into strengthening fundamentals - and runway for multiple expansion. At a high level, we believe SES’ 12-per-cent to 15-per-cent EBITDA/share growth algorithm warrants a higher multiple than that reflected currently. In the 12M post-asset divestiture to WCN, SES shares traded in the range of 6-8 times EV/EBITDA. In the LTM [last 12 months], the trading range rose to 7-9 times EV/EBITDA. To us, the exhibited durability of the 2025 EBITDA and the favorable dynamics into 2026 suggest the range can extend (to 8 times to 10 times EV/EBITDA). We raised our valuation multiple to 9.5 times EV/EBITDA on our 2026E.”
Elsewhere, others making target changes include:
* RBC’s Arthur Nagorny to $17 from $15 with a “sector perform” rating.
“Despite tariff-related disruptions to the Oil & Gas (largely a Q2 event) and Metals Recycling businesses (continuing to see impacts), Secure has indicated that it remains well-positioned for the balance of the year, implying an improvement in H2 results (while we see risks, we believe the guide is ultimately achievable),” said Mr. Nagorny. “With oil prices rebounding back to a supportive range after troughing in Q2, we increase our valuation multiple modestly.”
* Stifel’s Ian Gillies to $17.50 from $17 with a “buy” rating.
“SECURE reported 2Q25 results that met our expectations and the Street,” said Mr. Gillies. “Meanwhile, the company reiterated its 2025E EBITDA guidance, but suggested a heavier weighting to 4Q than usual (which creates uncertainty). Positively, we forecast the company generating EPS growth of nearly 10 per cent in 2026, prior to considering dry powder of $536-million which would take EPS growth to 14.2 per cent (assuming it was allocated to share repurchases). We continue to rate SES as a BUY, and have modestly increased our target price.”
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In other analyst actions:
* In a quarterly earnings preview for Canadian engineering and construction companies, Canaccord Genuity’s Yuri Lynk raised his targets for AtkinsRéalis Group Inc. (ATRL-T) to $118 from $102, Stantec Inc. (STN-T) to $165 from $150 and WSP Global Inc. (WSP-T) to $335 from $305 with “buy” ratings for each. The averages are $106.46, $158.09 and $300.93, respectively.
“We are moderating our organic growth expectations for Q2 across the board,” he said. “Amid the volatile trade environment, softer year-over-year U.S. non-residential construction in April and May, and weak Q2 results from some European-based engineering companies, our 5-per-cent average organic growth expectation for our three engineers under coverage began to look too ambitious. Additionally, Q2/2025 faces a strong comp in Q2/2024 that featured 9-per-cent average organic growth. Therefore, we have lowered our expected average organic growth to 3 per cent driving slight downward changes to our EBITDA estimates, which remain in line with consensus.”
* Scotia Capital’s Mario Saric raised his targets for Brookfield Corp. (BN-N, BN-T) to US$75 from US$69 and Brookfield Asset Management Ltd. (BAM-N, BAM-T) to US$66 from US$69 with “sector outperform” ratings for both. The averages are US$69.29 and US$59.62, respectively.
* Canaccord Genuity’s Katie Lachapelle hiked her Cameco Corp. (CCO-T) target to $115 from $92 with a “buy” rating. The average is $97.02.
“Cameco will report its second quarter results on July 31, before market open. We expect the quarter to be in line. Investors are likely to be focused management’s commentary on the uranium market, given recent spot price performance and lackluster year-to-date term volumes, in addition to Westinghouse earnings and future upside for that business segment (new AP1000 builds, Poland/Bulgaria FID timelines),” said Ms. Lachapelle.
* Following its fourth earnings per share beat in the last five quarters, Scotia Capital’s Himanshu Gupta raised his FirstService Corp. (FSV-Q, FSV-T) target to US$220 from US$210 with a “sector perform” rating. The average is US$215.33.
“FSV stock is up 10 per cent in response to 14-per-cent EPS beat in Q2 last week, but has still underperformed TSX by 8.4 per cent year-to-date,“ he said. ”Post recent move, FSV is now trading at 17.7 times EV/EBITDA, slightly below historical average of 18.1 times. FSV premium to other cash flow compounders is still lower at 1.5 times vs 3.4 times historically. We think potential above-average hurricane activity in 2025 is not priced in the stock, or reflected in our model."
* RBC’s Irene Nattel increased her target for shares of George Weston Ltd. (WN-T) to $323 from $316, while Desjardins Securities’ Chris Li raised his target to $305 from $300 with a “buy” rating. The average target on the Street is $302.14.
"Updating George Weston model and valuation to reflect Loblaw Companies (TSX: L), Choice Properties (TSX: CHP.UN), and Q2 Weston results released [Tuesday],“ Ms. Nattel said. ”Our constructive outlook on WN is predicated on our favourable outlook for 52.6-per-cent-owned Loblaw, augmented by share buyback funded in large part through participation in L NCIB. Current discount to NAV 16 per cent consistent with the long-term average and holdco discount embedded in our NAV."
* Following “slightly” better-than-anticipated second-quarter results, National Bank’s Patrick Kenny moved his Gibson Energy Inc. (GEI-T) target to $25 from $24 with a “sector perform” rating. Other changes include: ATB Capital Markets’ Nate Heywood to $27 from $26 with an “outperform” rating, Scotia Capital’s Robert Hope to $27 from $26 with a “sector outperform” rating and RBC’s Maurice Choy to $26 from $25 with an “outperform” rating. The average is $26.38.
“Tapping up our run-rate Infrastructure (Gateway) contributions, and based on a bump to our DCF valuation, our target taps up $1 to $25,” Mr. Kenny explained. “That said, with continued headwinds on the Marketing front, leverage remains perched above the company’s 3.0-3.5 times target range through 2025, before trending back towards 3.4 times (unchanged) by the end of 2026, contingent on Marketing contributions rebounding to at least the low end of the longer-term guidance range of $80-$120-million. As such, we see limited opportunity to accelerate the organic growth program and execute share repurchases over the near term.”
* Desjardins Securities’ Chris Li bumped his Pet Valu Holdings Ltd. (PET-T) target to $38 from $32 with a “buy” rating prior to its Aug. 5 quarterly release. The average is $35.39.
“We expect 2Q to show a sequential pick-up in SSSG [same-store sales growth] (2.0 per cent vs 1.4 per cent in 1Q),” he said. “Multiple sales growth drivers and easier comps should support accelerating SSSG through the year. This is key to supporting the current valuation, which has re-rated to 20 times forward P/E from 15 times. The next catalyst will be an earnings inflection in 4Q as PET laps DC [distribution centre] costs and there is greater visibility on achieving low-teen percentage EPS growth next year.”
* Ahead of the Aug. 5 release of its first-quarter 2026 financial results, National Bank’s Adam Shine increased his Stingray Group Inc. (RAY.A-T) target by $1 to $13 with an “outperform” rating. The average is $13.13.
“Growth in Retail Media revs is expected to be in low double digits in f2026,” said Mr. Shine. “Radio results continue to materially outperform peers. For past two years, growth in FAST [free ad-supported streaming television] and Retail Media ad units exceeded 45 per cent. RAY said in June growth was tracking over 40 per cent in 1Q26. FAST is being driven not just by more people doing more streaming on more installed Connected TVs, but also due to RAY offering more channels across more partners. We think FAST revs more than doubled to $30-$35-million in f2025 and management recently talked about possibly doubling this again in f2026.”