Inside the Market’s roundup of some of today’s key analyst actions
ATB Capital Markets analyst Tim Monachello raised his recommendation for shares of Ag Growth International Inc. (AFN-T) on Wednesday to “outperform” from “sector perform” previously, believing "the upside now outweighs downside risk for investors."
"This improved view is based on our view that the U.S. ag cycle is in a trough, and while the trajectory and timing of a recovery are difficult to determine, numerous indicators suggest cyclical downside to demand is limited, while a recovery phase could offer significant upside for investors,“ he said in a client report. ”More fundamentally, we believe AFN is likely to materially deleverage its balance sheet through H2/25 as it monetizes long-term financing receivables providing upside through debt-to-equity conversion, and AFN’s strong commercial momentum should support results over at least the medium-term.
“While our 2026 modeling includes roughly a 17-per-cent year-over-year increase in Farm revenue and a 6-per-cent year-over-year increase in Commercial revenue, our analysis suggests that even in a relatively flat revenue environment AFN shares could appreciate meaningfully. For context, assuming no revenue growth in 2026, our model suggests AFN could generate roughly $235-million adj. EBITDAS. In this scenario, AFN shares are currently trading at just 6.6 times 2026 estimated adjusted EBITDAS. For context, AFN has traded up to at least 7.4 times EV/adj. EBITDAS suggesting roughly 18-per-cent upside in a no growth scenario. While our base model assumes a recovery, we risk the 2026 component of our valuation to account for the risk in our estimates.”
Mr. Monachello’s change move comes following the July 31 release of the Winnipeg-based agricultural equipment company’s second-quarter results as well as a series of management marketing meetings He seemed surprised Ag Growth’s shares were down almost 1 per cent following the results, which included largely in-line earnings, no change to its full-year 2025 minimum adjusted EBITDA guidance and a “robust” orderbook of $660-million.
“AFN’s Q2/25 results showed continued momentum in its International Commercial segment with a healthy backlog of roughly $660mm (85-per-cent Commercial) and over $100-million of new orders in July,” he note. “While AFN’s North American Farm segment continues to face a challenging market, based on peer commentary, historical U.S. ag cycles, and sentiment indicators, we believe the U.S. ag market is stabilizing and likely at or near a trough.
“While the pace and timing of a potential recovery for U.S. ag is difficult to ascertain, we now believe the industry downside is relatively limited compared to the upside potential over the medium-term. Further, our modeling suggests that even in a relatively flat Farm scenario in 2026, AFN has meaningful upside potential as normalizing dealer inventories support demand and margins, and AFN converts debt to equity in H2/25 and beyond.”
While he reduced his adjusted EBITDA estimates by 2 per cent across his forecast horizon on “a slightly more conservative view of AFN’s Farm segment outlook,” Mr. Monachello raised his one-year target for the company’s shares to $52 from $47. The average target on the Street is $53, according to LSEG data.
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TD Cowen analyst Menno Hulshof thinks Suncor Energy Inc.’s (SU-T) second quarter “extended the outperformance trend first established in H2/23, with several second quarter records set amid heavy maintenance.”
“The U1 Drum Replacement was completed well ahead of schedule (we estimate 70-days, or less, vs. SU’s 91-days guide). 2025 capex was cut $400-million to $5.7-$5.9-billion due to year-to-date capital discipline and strong execution (i.e., not deferrals),” he added.
After the bell on Tuesday, the Canadian energy giant reported funds from operations of $2.19 per cent exceeding both Mr. Hulshof’s $2.15 estimate and the Street’s forecast of $2.12 “despite higher-than-forecast cash taxes and driven by stronger-than-forecast operating results across its upstream (oil sands/E&P) segments, offset by weaker-than-forecast downstream results.” Production of 808,000 barrels per day also topped expectations (791,000 barrels).
“On an entirely unexpected note, SU cut 2025 estimated capex by a material $400-million to $5.7-$5.9-billion given strong execution and capital discipline (i.e., deferrals were not a factor),” he said. “As a result, we wouldn’t be surprised to see 2026E capex trend below current consensus of $6-billion (we model $5.95-billion). We also consider 2025 production guidance conservative and think Street estimates for H2/25 and 2026E could slowly grind higher to capture consistent outperformance.”
With modest increases to his full-year cash flow and production projections, Mr. Hulshof bumped his target for Suncor shares to $63 from $62 with a “buy” rating. The average is $61.49.
“Strong execution of the U1 Drum Replacement (we estimate completion in 70-day or less vs. SU’s 91-d official guide) should further boost Street confidence in execution of the 2025 plan, including delivery of its 3-year (by year-end 2026) targets in roughly 2-years (by YE25),” he concluded. “Recall turnaround execution in 2024 was also a key driver of quarterly ‘beats’. Mid-term, we highlight: 1) SU returning “at-or-near” 100 per cent of excess FFF through buybacks; 2) no material spending on new bitumen capacity through 2028 (consolidation of FH ensures upgraders kept full; margins maximized); 3) 100mbbl/d of growth by 2026E (vs. 2023), with capex falling to less than $6-billion (even more confident here given the $400-million cut to 2025E capex to $5.7-$5.9-billion); and 4) comfortably tracking ahead of key 2026 targets having achieved US$7/bbl + of its US$10/bbl WTI breakeven reduction target and $2.3-billion-plus (70 per cent plus) of its $3.3-billion FFF [free funds flow] growth target by YE24.”
Elsewhere, Scotia Capital’s Kevin Fisk raised his target to $62 from $60 with a “sector perform” rating.
"SU announced solid Q2/25 results with CFPS, production and capex beating consensus by 4 per cent, 2 per cent, negative 9 per cent, respectively,“ said Mr. Fisk. ”The company completed its planned turnarounds ahead of schedule which resulted in record Q2 upstream production and downstream throughput. SU is positioned for a strong H2/25 due to lower levels of planned maintenance. Additionally, cost savings resulted in a 6-per-cent reduction to SU’s 2025 capex guidance. We expect a positive share price reaction due to SU’s strong operational execution and reduced capital spending."
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Following "a beat and raise quarter," Stifel analyst Martin Landry expects same-store sales growth to continue to accelerate for Pet Valu Holdings Ltd. (PET-T).
Shares of the Markham, Ont.-based retailer surged 7.9 per cent following the premarket release of “good” quarterly results and and outlook that Mr. Landry thought were “reassuring” for investors.
Earnings per share grew 5 per cent year-over-year to 38 cents, exceeding the 33-cent expectation of both the analyst and the Street due largely to lower expenses than expected. Same-store-sales increased 2.6 per cent from the same period a year ago, also topping projections (2 per cent).
“Pet Valu reported traffic growth at stores for the first time in six quarters, a shift in trend we had been waiting for,” said Mr. Landry. “Management indicates that momentum continued into Q3/25 and expects the pace of same-store-sales growth to accelerate in Q3/25 and Q4/25 relative to Q2/25. The 2025 EPS guidance is revised upward to a range of $1.63-1.68, up $0.02 at the mid-point vs previously.”
While he acknowledged the company’s announcement president and chief operating officer Greg Ramier will replace retiring chief executive officer Richard Maltsbarger next month was “a slight surprise and happened earlier than most expected,” the analyst emphasize “the timing is not bad as Pet Valu seems to be in a positive trajectory with accelerating same-store-sales and abating supply chain costs.”
“Mr. Maltsbarger was well-liked among the investment community having led the company through a successful IPO in 2021,” he added. However, his successor, Greg Ramier, has deep expertise in retail and is credited for some of the recent improvements implemented to Pet Valu’s merchandising and promotional planning tools.”
Also predicting its invesmtnets in the culinary category, including a new store layout, “should pay off” and its multi-year, $100-million supply chain transformation is almost compete, Mr. Landry raised his full-year 2025 EPS forecast by 5 cents to $1.69 to reflect the quarterly beat. His 2026 projection rose 9 cents to $1.80.
With those changes and a higher valuation multiple, he raised his target for Pet Valu shares by $7 to $40, keeping a “buy” recommendation. The average target on the Street is $40.86.
"Given the volatile economic environment, we believe Pet Valu is an appealing investment where investors can find refuge,“ he added. ”The Canadian Pet Food industry is defensive, having declined only once in 30 years, a characteristic sought after by investors. In addition, Pet Valu’s cost structure is not impacted in a material way from fluctuation in tariffs.
“Valuation has expanded but remain in-line with historical levels. Pet Valu’s shares trade at 19 times forward earnings, 0.5 turns higher than the average of the last four years. We believe that improved share liquidity and removal of overhangs related to secondary offerings make Pet Valu more attractive vs historical levels. For valuation to expand from current levels, we believe investors will need to see same-store-sales growth back in the mid-single digits range sustainably.”
Elsewhere, seeing its same-store sales growth trajectory “improving and expected to accelerate through 2025,” National Bank Financial’s Vishal Shreedhar raised his target to $41 from $38 with an “outperform” rating.
“We hold a positive view on PET, 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.”
Other analysts making changes include:
* Raymond James’ Michael Glen to $40 from $36 with an “outperform” rating.
“All-in-all, we see upside in Pet Valu’s stock and believe the current price represents a reasonable entry point,” he said.
* ATB Capital Markets’ Chris Murray to $41 from $40 with an “outperform” rating.
"We view the improving trends around same-store growth, margins, and FCF conversion as supportive of PET’s outlook and increased returns to shareholders. While shares have performed well of late, we remain constructive on PET and would remain buyers," said Mr. Murray.
* Desjardins Securities’ Chris Li to $41 from $38 with a “buy” rating.
“SSSG improved sequentially in 2Q, with traffic turning positive after six straight quarterly declines. Momentum is continuing with SSSG expected to accelerate in 2H,” he said. “In addition to stabilizing discretionary demand, this reflects market share gains supported by PET’s robust pipeline of commercial initiatives, with many that are still in the early innings. The next catalyst is an earnings inflection in 4Q as PET laps DC costs and there is greater visibility on achieving low-double-digit EPS growth next year.”
* Barclays’ Adrienne Yih to $41 from $32 with an “overweight” rating.
“Though sales matched consensus, the company delivered sequentially improving comp sales growth, as same-store transactions inflected positively and average spend per transaction remained positive. Management raised its FY25 guidance,” she said.
* TD Cowen’s Michael Van Aelst to $44 from $35 with a “buy” rating.
“Valuation is moving higher to reflect momentum building in SSSG (which we and PET see continuing through H2) and the end of its 4-year DC modernization that should deliver operating leverage starting in Q4,” he said. “Investments to support an expanding culinary offering (category growing more than 20 per cent) are much smaller, and should support sales growth over the coming year.”
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Following a second-quarter earnings beat driven primarily by an “exceptionally high amount of experience gains across several business lines‚" National Bank Financial analyst Gabriel Dechaine touted an acceleration in IA Financial Corporation Inc.’s (IAG-T) internal capital generation.
“IAG delivered $200-million of internal capital generation, a rebound from Q1/25’s figure of $125-million management had guided to acceleration over the course of the year, which puts the company back on track to achieve its full-year target of $650-million,” he said. “IAG’s deployable capital figure pro forma the RF acquisition was $900-million at Q2/25.”
After the bell on Tuesday, the Quebec-based company reported underlying earnings per share of $3.49, blowing past both Mr. Dechaine’s $3.01 projection and the consensus expectation of $3.04. He attributed the beat to a 31-cent boost from experience gains across several business lines, noting it would’ve still yielded a beat with that item, “driven by non-insurance activities (a contribution of 10 cents more than anticipated) and credit performance (5 cents).
IAG also announced a 10-per-cent increase to its quarterly dividend to 99 cents per share.
“Pre-tax experience gains of $38-million represent a high-water mark for the company, sitting above the previous high of $31-milion during Q4/22 and a range of negative $12-million to positive $31-milllion (average $5-million) since the adoption of IFRS 17,” he explained. “The Canadian segment was the primary contributor, with $31-million of experience gains, the result of positive Group morbidity experience, positive mortality in the Individual Insurance line and lower P&C claims. IAG’s U.S. life insurance business also reported $6-million of mortality gains. Although we view this quarter’s level of experience gains as unsustainable, we acknowledge that IAG generates them more often than not. Moreover, even if we were to exclude this line item, the company’s Q2/25 annualized ROE would have been approximately 17 per cent (compared to the 17-per-cent-plus target by 2027).”
Keeping a “sector perform” rating for IAG shares, Mr. Dechaine raised his target to $146 from $141 to reflect stronger non-insurance income and expected insurance earnings. The average is $148.67.
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Desjardins Securities analyst Frederic Tremblay thinks 5N Plus Inc. (VNP-T) is "firing on all cylinders."
“The company announced another spectacular quarterly beat, a new and expanded supply agreement with First Solar, and an increase in its 2025 guidance,” he said. “The future continues to look bright, including strong demand momentum in Specialty Semiconductors (eg First Solar, AZUR) and healthy margins in Performance Materials. We expect VNP to beat its updated 2025 guidance.”
On Monday after the bell, the Montreal-based producer of specialty semiconductors and performance materials reported second-quarter adjusted EBITDA of US$24.1-million, up 79.0 per cent year-over-year and “well ahead” of Mr. Dechaine’s US$18.0-million forecast and consensus projection of US$17.9-million as revenue gained 27.8 per cent and margins came in better than anticipate.
“Key tailwinds included higher volume (which drove economies of scale) in the terrestrial renewable energy and space solar power sectors, and higher prices,” he said.
“We are pleased with VNP’s new and expanded agreement with its largest customer, First Solar. VNP’s production and delivery of CdTe [Cadmium Telluride] to First Solar for the 2025–26 period will be 33 per cent higher than the initial contract levels. Additionally, the companies entered into an agreement for the subsequent two-year period, which calls for a 25-per-cent increase in CdTe volumes in 2027–28 vs 2025–26. VNP expects to meet this significant volume increase with minimal cape."
Mr. Tremblay now thinks the company’s guidance raise to US$65–70-million (from $55-$60 million) “looks conservative.”
“With US$44.9-million of adjusted EBITDA generated in 1H25, VNP is already two-thirds of the way to the midpoint of the new guidance range,” he noted. “Considering this spectacular year-to-date performance and the company’s constructive demand and margin outlook in 2H25 and beyond, we are making significant upward revisions to our estimates. Our adjusted EBITDA forecasts are US$76.1-million and US$87.2-million in 2025 and 2026, respectively.”
With increases to his 2025 and 2026 financial forecast, Mr. Tremblay hiked his target for 5N Plus shares to $17.50 from $14, reiterating a “buy” rating. The current average is $14.65.
“Considering the overwhelmingly positive updates (eg 2Q beat, new First Solar agreement, balance sheet strength), we view an expansion of the valuation multiple as warranted,” he said. “We are raising our multiple to 13.5 times (from 12.5 times) on our 2026 adjusted EBITDA estimate, which is around recent highs (matching, in our view, recent record results). This drives a target increase.”
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BMO Capital Markets analyst Raj Ray resumed coverage of a group of lithium equities on Wednesday. They include:
* Frontier Lithium Inc. (FL-X) with a “market perform” rating and 75-cent target. The average is $2.10.
Analyst: “Frontier is developing the PAK lithium project with its minority joint venture partner Mitsubishi. Frontier is differentiated from many of its peers with one of the highest-grade resources globally, which we believe should result in an attractive cost profile. We like the project quality and have confidence in management’s ability to execute; however, the project is longer dated relative to peer projects, and we look for greater visibility on the infrastructure project development.”
* Lithium Ionic Corp. (LTH-X) with an “outperform” rating and $1.25 target. Average: $4.11.
Analyst: " The May 2024 Bandeira feasibility study outlined an attractive low-cost and low capex underground operation. The company is awaiting the final permit, which would allow it to commence construction (we model first production in Q2/27). Lithium Ionic stands out among peers with a relatively short timeline to first production. We believe the company will benefit from a second-mover advantage in the Minas Gerais region of Brazil, following in the footsteps of Sigma Lithium."
* NextSource Materials Inc. (NEXT-T) with a “market perform” rating and undisclosed target. Average: $1.45.
Analyst: “NEXT is developing an integrated mine-to-anode graphite business with ramp-up under way at its Molo mine in Madagascar and plans to develop a downstream battery anode facility (BAF). While Phase 1 of the Molo mine has experienced continued challenges during ramp-up, management remains confident that the larger Phase 2 operation is feasible. If the company can execute on the development plan, NEXT is well-positioned to capitalize on recent anode material tariffs placed on China by the U.S.”
* Patriot Battery Metals Inc. (PMET-T) with an “outperform” rating and $7 target. Average: $7.67.
Analyst: “Patriot has discovered the largest pegmatite resource in the Americas that we believe has the potential to become a cornerstone of Quebec’s emerging lithium industry. Volkswagen (VW) made a strategic investment in the company in December 2024, along with an offtake agreement between Patriot and VW’s subsidiary, PowerCo. The endorsement from a major OEM validates the project’s potential and bodes well for raising the necessary capital to achieve FID, in our view.”
* Standard Lithium Ltd. (SLI-X) with an “outperform” rating and $4.75 target. Average: $3.99.
Analyst: “Standard Lithium is developing a portfolio of high-grade lithium brine projects with its joint venture partner Equinor (Not Covered) in the Smackover Formation in the Southern U.S. The company plans to apply direct lithium extraction (DLE) technology to develop an integrated lithium business and produce battery-grade lithium carbonate. Equinor brings extensive sub-surface extraction experience and coupled with Standard’s extensive multi-year demonstration and pilot plant testing, lowers project execution risk, in our view.”
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In other analyst actions:
* Pointing to looming “recontracting headwinds” and valuation concerns, Wells Fargo’s Praneeth Satish downgraded Pembina Pipeline Corp. (PPL-T) to “underweight” from “equalweight” with a $50 target. The average is $59.63.
* National Bank’s Matt Kornack trimmed his BTB REIT (BTB.UN-T) target by 10 cents to $3.30, below the $3.66 average, with a “sector perform” rating.
“BTB’s print was below expectations as headline figures were impacted by non-cash adjustments as a result of a tenant bankruptcy (subsequently re-leased) in Edmonton and reduced rental term and rate on Lion Electric,” said Mr. Kornack. “On ops the results were weak this quarter as occupancy slipped by 90 and 130 basis points on an in-place and committed basis, respectively, given non-renewals (lease-up not expected imminently). Leasing spreads held in at around 5 per cent but were not enough to offset the occupancy loss resulting in SPNOI growth of negative 1.5 per cent. The REIT did sell two small properties in Q2/Q3 which will incrementally help on the liquidity front, while there are multiple properties in different stages of negotiation on both the acquisition and disposition front.”
* Ventum Capital Markets’ Adam Gill initiated coverage of Coelacanth Energy Inc. (CEI-X), a Montney-focused oil and natural gas exploration and development company based in Calgary, with a “buy” rating and $1.15 target. The average is $1.24.
"The Company is in the initial innings of a large-scale Montney oil growth opportunity, just adjacent to the Heritage project the management team developed under the Leucrotta brand before selling the asset to Vermilion Energy (VET-TSX, Not Covered) in 2021,“ said Mr. Gill. ”While the current valuation is high given the production growth ramp-ups for only the second half of 2025, the production per-share growth and multiple compression into 2027 stand out well ahead of peers. With that, we believe as volumes ramp up in H2/25 and the market receives confirmation of the growth, the stock will re-rate to provide better value to its longer-term potential."
* National Bank’s Don DeMarco raised his target for Eldorado Gold Corp. (ELD-T) to $41 from $38 with an “outperform” rating. The average on the Street is $35.52.
* In response to the early Tuesday announcement of a US$1.0-billion Kansanshi gold streaming agreement with Royal Gold, Stifel’s Ralph Profiti raised his First Quantum Minerals Ltd. (FM-T) target to $26 from $25 with a “hold” rating, while Scotia’s Orest Wowkodaw bumped his target to $28 from $27 with a “sector perform” recommendation. The average is $25.11.
“Overall, given our 4-per-cent higher NAVPS estimate, the company’s improved liquidity and reduced debt leverage, we view this transaction as a positive development for the shares,” said Mr. Wowkodaw.
“We rate FM shares Sector Perform due to elevated debt leverage and heightened Cobre Panama (CP) uncertainty.”
* Barclays’ Alex Scott raised his Great-West Lifeco Inc. (GWO-T) target by $1 to $57 with an “equal weight” rating. The average is $55.56.
“We view the EPS result as mixed as the reported beat was mostly tax rate related and driven by Group Benefits while the Empower business missed,” he said
* Raymond James’ Steven Li reduced his Kneat.com Inc. (KSI-T) target to $7 from $7.50 with an “outperform” rating. The average is $8.05.
“2Q was below expectations,” he said. “ARR grew 5 per cent ex-FX headwinds, but lagging a bit behind recent trends. The CEO noted new customer wins reached new highs which means they are tracking ahead on new logos but ARR growth from existing customers’ expansion plans are behind given macro uncertainties. The opportunity to digitize and modernize quality management compliance (especially as AI is knocking at the door) remains substantial in our view ($2-billion-plus ARR TAM) and KSI retains a strong market leadership position with its Top 20 wins.”
* Barclays’ Adrienne Yih dropped her Lululemon Athletica Inc. (LULU-Q) target to US$209 from US$270 with an “equal weight” rating. The average is US$291.28.
* Following an update on the recent pit-wall event at its Camino Rojo Mine and a revision to its guidance, Stifel’s Ingrid Rico trimmed her Orla Mining Ltd. (OLA-T) target to $18.50 from $19 with a “buy” rating. The average is $17.44.
“In our view, the update should reassure investors that the pit-wall movement is a temporary setback that is being addressed, and has a modest impact to 2025 consolidated guidance expectations (Consolidated production guidance revised 5 per cent down and a modest AISC increase of $50/oz),” she said. “CR’s temporary setback has paused the momentum shares had re-gained at the beginning of H2. That said, OLA’s valuation has materially contracted (trading at 1.0 times long-term P/NAV), with shares pricing in a larger impact than what it’s now better understood. The layback permit approval is the next de-risking event with approval expected in H2 2025. We maintain our view that OLA deserves a premium valuation with current pullback offering a good entry level.”
* Ahead of the close of its acquisition by Sunoco in the fourth quarter of 2025, National Bank’s Vishal Shreedhar bumped his Parkland Corp. (PKI-T) target to $42 from $41, keeping a “tender” recommendation. The average is $43.80.
"Given that PKI is set to be acquired, we thought to review its performance over time,“ he said. ”We highlight that since Bob Espey was appointed CEO of PKI effective May 2011, PKI has outperformed and delivered a total cumulative return of 496 per cent vs. 198 per cent for the S&P/TSX Composite Index and 25 per cent for the S&P/TSX Capped Energy Index (same time period)."