Inside the Market’s roundup of some of today’s key analyst actions
In response to a recent decline in share price, National Bank Financial analyst Adam Shine raised his rating for Telus Corp. (T-T) to “outperform” from “sector perform” previously, expecting the Vancouver-based telecommunications company to revisit its dividend growth policy before any cuts are made.
It shares fell over 5 per cent on Tuesday after JP Morgan analyst Sebastiano Petti downgraded Telus, expressing concern about “dividend growth that appears unsustainable.” That move following an article from the Globe and Mail’s John Heinzl which said “it’s clear that investors are increasingly concerned about the dividend’s long-term sustainability – or at least Telus’s ability to keep raising it."
“In a note on April 15 discussing dividends, our Telus section had the title of ‘dividend growth policy majorly elevated but will payout stay high in most unnecessary way’,” said Mr. Shine. “Three weeks later the next policy range was disclosed as 3-8 per cent. Fast forward to this past weekend, where The Globe and Mail wrote an article titled “Putting Telus’s Outsized Dividend Under The Microscope”. This article was preceded and followed by a brokerage downgrading the stock and reducing its target by 10 per cent from US$21.
“We struggle to justify a target drop to as low as $19. We forecast a FCF payout pre-DRIP of 118 per cent in 2025, 107 per cent 2026, 104 per cent 2027 and 97 per cent 2028 with post-DRIP estimates of 77 per cent, 80 per cent, 83 per cent and 90 per cent, respectively. The 2-per-cent DRIP discount is to drop progressively before getting eliminated at the end of 2027. While this payout dynamic will remain in focus, we’d expect a change in the policy growth range before a cut to the dividend.”
Following changes to his valuation, Mr. Shine made his rating revision while trimming his target for Telus shares to $21 from $23. The average target on the Street is $22.70, according to LSEG data.
“We downgraded Telus to Sector Perform on Dec. 12, 2024 when it was just shy of $21,” he said. “It ended 2024 near $19.50 and then saw its biggest move of 2025 occur in the run-up to its 4Q24 reporting in mid-February and through into the 3-4 weeks that followed as the market embraced the new disclosure of getting leverage to 3.0 times in 2027 from 3.9 times in 2024. The stock hit its 52-week high of $23.29 on March 10. With the shares under $22, we published a note on Feb. 20 where we wondered ‘How Much Blue Sky Is Already Baked Into Stock’ which we thought was ahead of itself by at least 9 per cent, as we reflected on the large implied valuation gap to BCE and Rogers whose narratives would soon change.
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In a separate client note released late Tuesday, Mr. Shine lowered his rating for Quebecor Inc. (QBR.B-T) to “sector perform” from an “outperform” rating following “impressive” recent share price appreciation with it now approaching his target “that has been repeatedly raised.”
“We returned our rating on Quebecor to Outperform on Aug. 11 following an anticipated pullback in the stock heading into and after 2Q reporting,” he explained. “Since then, the stock is up more than 38 per cent (S&P/TSX up 8 per cent) driven by ongoing market share gains by the company in wireless, more discipline being exhibited by carriers in the mobile sector, a better balance being achieved by management between subscriber loading and margins and evolving supportive buyback activity.
“Along the way, we have steadily raised our target post-marketing (Sept. 16), with our 3Q preview (Oct. 17), after Quebecor delivered a 3Q beat (Nov. 6) and also after offering further insights on Telecom’s outperformance in 3Q (Nov. 11).”
Given those moves, Mr. Shine now thinks “a pause is warranted on further target increases,” which he said prompted the downgrade until “a better buying opportunity” following the price appreciation, which has now reached 68 per cent in 2025 (versus 21 per cent for the S&P/TSX).
His target for Quebecor shares remains $54, which exceeds the average target on the Street of $51.67.
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RBC Capital Markets analyst Kaan Peker thinks PMET Resources Inc. (PMET-T) “offers investors Tier-1 lithium resource scale, strategic OEM alignment, and leverage to the build- out of a North American battery supply chain.”
With its Shaakichiuwaanaan project in Northern Quebec now North America’s largest undeveloped hard-rock lithium resource, he sees the Montreal-based company as a “cornerstone for North America’s electrification” and “stands out as one of the few Western assets able to supply meaningful volumes into a region with constrained upstream supply.”
That led him to initiated coverage with an “outperform” rating on Wednesday.
“The recent Feasibility Study provides a conservative base case anchored on the CV5 deposit, while upcoming approvals, by-product, deposit integration, and funding clarity present multiple re-rating catalysts,” he said. “We recommend accumulating ahead of Resource updates in 1H26 and technical studies.”
Mr. Peker acknowledges his base case for PMET is “conservative, but the upside evident.”
“Our valuation includes only the CV5 Feasibility Study,” he noted. “It excludes CV13 integration, excludes the higher-grade Nova Zone, excludes tantalum/cesium by-products and logistics optimization. Each represents an uplift to project value and collectively supports 40-80-per-cent NAV upside. The true strategic value of PMET lies in the scale potential to support more than 1 Mtpa of concentrate over time.
“OEM alignment provides strategic value: Volkswagen’s equity stake via Powerco and long-term offtake agreement reduces commercial and financing uncertainty. PMET is one of the only North American developers already anchored to a Tier-1 OEM, providing visibility on demand, funding and possible downstream integration. This alignment is a differentiator at a time when the supply chain is reorganizing around IRA-compliant feed.”
The analyst set a target of $4.70 per share. The average is $7.34.
“North America feedstock supply [is] constrained, PMET fills the gap,” he said. “Conversion capacity in Québec, Ontario and the U.S. is anticipated to expand significant by 2030, but upstream supply is lagging. Without PMET, North America remains heavily reliant on imports. PMET’s scale, hydro- power access and proximity to Bécancour position it at the centre of the James Bay-Bécancour-Detroit corridor. This creates both a strategic floor under PMET’s relevance and a scarcity premium if supply tightens.”
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RBC Dominion Securities analyst Bart Dziarski said Power Corporation of Canada (POW-T) “continues to be a strong capital return story with a 3.6-per-cent dividend yield (the lowest since Q3/21) and continued share repurchases (10.0 million shares re-purchased year-to-date) while maintaining multiple levers of growth (i.e. Sagard).”
“POW shares have meaningfully re-rated this year, up 52 per cent primarily driven by i) a narrowing discount to NAV ii) GWO shares re-rating (up 32 per cent year-to-date) and iii) IGM shares announcing value-enhancing write-ups in Rockefeller and Wealthsimple,” he added in a client report titled POWering to new highs.
Following third-quarter results that exceeded his expectations, Mr. Dziarski reviewed his valuation framework for the diversified holding company, which owns 66.8 per cent of Great-West Life, Canada’s second-largest life insurer, as well as 62.1 per cent of asset manager IGM Financial, 74 per cent of Wealthsimple Financial as well as 14.1 per cent of European conglomerate Groupe Bruxelles Lambert SA (GBL).
“Per RBC analyst Darko Mihelic, GWO’s base EPS was above his estimate driven by higher insurance experience gains with all segments above expectations (except for Corporate),” he said. “IGM’s normalized EPS was above our forecast and consensus driven primarily by one-time seed gains from ChinaAMC. GBL’s contribution to earnings of negative $11-million was below our forecast of $30-million.
“Healthy year-to-date buyback activity continues post quarter. POW repurchased 3.0 million shares in Q3/25 for $173-million, bringing the year-to-date total to 10.0 million shares repurchased for $545-million (inclusive of an additional 2.6M shares purchased post-quarter for $163-million). On March 1, 2025, POW commenced a new NCIB, which allows POW to repurchase up to 20 million subordinate voting shares, or approximately 4 per cent of the float, until February 28, 2026. Through October 2025, POW has returned $2.1-billion to shareholders via dividends and buybacks, a record amount. We estimate POW has $700-million of excess cash that we expect will be partially deployed into buybacks.”
Maintaining his “sector perform” rating, the analyst raised his target to $68 from $60. The average is $71.88.
“POW’s current 13-per-cent discount to NAV is below our justified discount given i) simplified organizational structure over the last 5 years, ii) GWO, IGM and GBL re-positioning their businesses and sporting respectable growth outlooks, and iii) growing Alternatives platform providing upside optionality,” said Mr. Dziarski. “Since 2019, POW has been actively surfacing value with $3.6-billion of asset monetizations to simplify its equity story, re- deploying capital into seed investments within Alternatives, and returning capital to shareholders via NCIB and growing dividends. We expect further value-enhancing transactions over time. We no longer see valuation upside potential from a narrowing NAV discount. ”
Elsewhere, CIBC World Markets analyst Scott Fletcher initiated coverage of Power Corp. with a “neutral” rating and $75 target.
“Our view on Power Corporation (POW) is informed by a growth outlook for its underlying operating subsidiaries, and a view on where the discount to its net asset value will settle. CIBC’s outlook for GWO and IGM dictate much of our view on POW’s NAV growth, which we expect will be 8 per cent over the next 12 to 18 months. With the NAV discount currently sitting at a historically low 12.5 per cent, we see more downside risk than upside from potential moves in the discount. Combining our NAV growth expectation, the potential for a widening discount, a 3.5-per-cent dividend yield, and modest accretion from buybacks, we expect a total annual shareholder return of approximately 10 per cent, leading us to a Neutral rating,” he said.
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Ahead of the approaching fourth-quarter earnings season for Canadian banks, CIBC World Markets analyst Paul Holden raised his forecasts by an average of 1.8 per cent, pointing to higher investment banking and wealth management results.
“Our revised estimates imply year-over-year growth of 21 per cent on average and are 1 per cent higher than consensus on average,” he said. “The biggest positive variances between our EPS estimates and consensus are TD (4 per cent) and RY (4 per cent). Five of the Big 6 typically increase their dividend with FQ4 results. BNS reviews its dividend annually in FQ2. For the remaining five, we expect an average dividend increase of 3 per cent (we do not cover CM; assumption based on consensus)
“Key themes for the quarter include strong capital markets revenue, flattish PCLs vs. last quarter, NII growth predominately through NIM expansion, an earnings uplift from wealth management segments and use of excess capital. Each of the big banks will be providing initial F2026 guidance. We expect a relatively conservative tone given uncertainty with U.S. trade negotiations and lacklustre economic growth in Canada. We expect to hear guidance along these lines: mid-single-digit loan growth, flat NIM, modestly improving impaired PCLs (~5bps) and positive operating leverage. That won’t get us excited, but what does is the prospect for capital intensive growth in Canada stemming from the recent Federal Budget and the likelihood of lower regulatory capital requirements. We expect the banks can produce high-single-digit to low-double-digit EPS growth in F2026 and similar in F2027.”
With his estimate revisions, Mr. Holden made these target price changes:
- Bank of Montreal (BMO-T, “outperformer”) to $192 (Street high) from $180. The average is $174.46.
- Bank of Nova Scotia (BNS-T, “neutral”) to $100 from $93. Average: $91.85.
- National Bank of Canada (NA-T, “neutral”) to $166 from $154. Average: $158.08.
- Royal Bank of Canada (RY-T, “neutral”) to $220 from $208. Average: $216.85.
- Toronto-Dominion Bank (TD-T, “outperformer”) to $122 from $112. Average: $116.54.
“We remain positive on the banks based on earnings upside from capital markets related revenue, our expectation for declining PCLs in F2026, strong capital ratios and prospect for lower regulatory requirements,” Mr. Holden said. “Valuation multiples are elevated relative to historical levels, which makes the stocks more susceptible to market gyrations. The positive fundamental outlook has not changed in our view. TD and BMO remain our two Outperformers.”
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Expecting an improvement in new flows, CIBC World Markets analyst Scott Fletcher initiated coverage of IGM Financial Inc. (IGM-T) with a “neutral” rating, touting “a diversified portfolio at a fair price.”
“Following a period of consolidated net outflows across 2023 and 2024, net flows at IGM have recently returned to positive territory,” he said. “We believe that momentum can be sustained, as Canadian consumer expectations support an improvement in household savings rates, a metric historically correlated with fund flows. We model industry net flows improving to 2 per cent over our forecast period, with IG Wealth continuing to perform in line with the industry on the strength of its high-net-worth (HNW) targeting efforts, and Mackenzie’s net flow improving but continuing to fall short of the industry given recent fund performance.
“Fee Pressure Persists: While product-level fee pressure has eased in recent years, a shift in the makeup of assets under management (AUM) towards lower-fee products at Mackenzie and lower-fee high-net-worth (HNW) customers at IG Wealth should continue to drive fee rates gradually lower. IGM has done well to offset top-line pressure and maintain margins, but modest fee pressure remains, limiting multiple expansion potential.”
Believing current economic conditions can support a sustained improvement in net fund flows, Mr. Fletcher said his estimates reflect those gains, while noting he sees “only modest upside from multiple expansion in a scenario where net flows do improve.”
“IGM’s strategic investments add intriguing exposure across the wealth and asset management ecosystem, but we don’t believe that the fair value of the investments, individually or in aggregate, is materially dislocated from their carrying values,” he added.
He set a $61 target for IGM shares, which falls $1 below the average on the Street.
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In other analyst actions:
* Canaccord Genuity analysts expect an “improving” outlook for the lithium sector to “continue to support equities and suggest investors continue to reassess sector exposure,” leading Kate Lachapelle to upgrade Lithium Americas Corp. (LAC-T) to “buy” from “hold” with a $6.50 target. The average is $7.83.
“Lithium Americas is progressing on schedule with its 62-per-cent-owned Thacker Pass lithium mine and processing plant in Nevada, targeting 40ktpa of battery-grade lithium carbonate in Phase 1. As of Q3 2025, $720-million of the $2.9-billion total capex has been spent, with detailed engineering over 80 per cent complete. Mechanical completion is expected by late 2027, followed by 6-12 months of ramp-up, with 2029 as the first full production year. On-site workforce has grown to 700 people, targeting 1,000 by year-end. Long-lead equipment commitments total $430-million, with most deliveries expected through Q1 2026,” she said.
* Ms. Lachapelle moved her Lithium Royalty Corp. (LIRC-T) target to $9 from $8.60, keeping a “buy” rating. The average is $8.17.
* Bloom Burton’s David Martin moved his risk designation for Vancouver-based AbCellera Biologics Inc. (ABCL-Q) to “speculative” from “above average” previously, keeping a “buy” rating and US$9 target (versus the US$10 average), as it “focuses more on the higher risk/reward business of proprietary drug development.”
“We have taken a dive into AbCellera’s internal pipeline, as the company is shifting more focus to this part of its business,” he said. “Two antibody therapeutics currently make up the internal pipeline: 1) ABCL635 an antagonist of the neurokinin 3 receptor (NK3R), for treatment of vasomotor symptoms (VMS - primarily hot flashes, night sweats) associated with menopause, and 2) ABCL575 which binds to OX40 ligand (OX40L) on antigen presenting cells (APCs), in doing so, blocks major inflammatory signaling pathways.
“Both therapies have large potential markets: 12 million American women have moderate-to-severe VMS; 15 million Americans have been diagnosed with autoimmune diseases and it is estimated that another 35 million are affected.”
* JP Morgan’s Seth Seifman hiked his Bombardier Inc. (BBD.B-T) target to $215 from $170 with a “neutral” rating. The average on the Street is $216.75.