Inside the Market’s roundup of some of today’s key analyst actions
Scotia Capital analyst Konark Gupta thinks “conditions still warrant cautious optimism” for transportation and industrial stocks in 2026.
“Over the past two months of our channel checks, we have realized that there is a sense of urgency in defence readiness around the globe amid geopolitical noise, that the word ‘uncertainty’ still comes first to most executives’ minds, and that companies are controlling what they can control rather than succumbing to fake starts,” he said. “Against that backdrop, we see an upside risk to market expectations for defence companies while downside risk for freight carriers, especially truckers.”
In a client report released before the bell on Wednesday, Mr. Gupta expressed a preference for aerospace and defence companies from an investing perspective, pointing to “the ever-increasing geopolitical conflicts and tensions are likely to drive acceleration in order activity for defense products and services (including space technology).”
“Commercial aviation and space markets are also expected to thrive, given OEMs (Airbus and Boeing) are gradually coming out of multi-year supply chain disruptions and more space infrastructure is needed to support global connectivity, respectively,” he explained. “While freight markets are still facing a number of uncertainties, investor pessimism has decreased significantly over the past two months, as evidenced by a speculative rally in several trucking stocks. We would prefer waste over freight for better earnings quality and resilience, although we acknowledge that freight names, especially trucking, offer the most torque on a potential macro rebound / tariff relief. Higher-quality freight carriers, like Canadian railroads, could catch a bid this year after underperforming U.S. peers for three years in a row, but we fear the upside could be capped due to the ongoing mega Class 1 merger process south of the border. Nevertheless, we see better risk/reward in Canadian rails vs. trucks, given the latter have rallied already.”
Citing its recent relative performance, Mr. Yaghi downgraded Bombardier Inc. (BBD.B-T) to a “sector perform” rating from “sector outperform” previously with a target of $295 target, jumping from $230. The average target on the Street is $255.25, according to LSEG data.
“We are downgrading BBD.B solely on valuation as forward EV/EBITDA multiple has expanded to 14 times on our 2026 estimates, doubling over the past year and largely closing the gap to its closest peer, General Dynamics (15 times),” he said. “Our increased target price of $295 is based on a multiple expansion of 2.5 times to 13.5 times (above the pre-pandemic average of 10 times), applied to our 2027 estimates. We believe the multiple expansion is justified by management’s continued solid execution on deleveraging, diversification and earnings growth. The recent momentum in BBD.B’s defence revenue has also contributed significantly to the expansion as it appears that management’s US$1.0-US$1.5-billion defense revenue target for 2030 could be realized sooner, especially in light of global conflicts and geopolitical tensions. We believe BBD.B could already be generating more than US$1.0-billion revenue from the defense business.
“Looking ahead, we expect further earnings growth along with margin expansion from bizjet production rate increases, defense aircraft orders, and aftermarket services growth. Further improvement in the global supply chain (particularly engines) should contribute to our expected EBITDA margin expansion over the next three years. FCF should continue to grow with earnings, deleveraging / refinancing (interest cost savings), and management’s efforts to keep capex in check (potentially sub-US$300-million), which could further reduce the leverage ratio to sub-2.0 times this year. In terms of potential catalysts, we believe BBD.B could soon be in a position to re-evaluate capital priorities, likely announcing shareholder returns such as share buybacks or dividends, while also considering tuck-in opportunities and moving toward an investment grade rating. The key upside risk to our thesis could come from faster-than-expected margin expansion as the Global 7500-to-8000 transition, defence, and aftermarket services are all margin-accretive. The key downside risks for the stock could be a bizjet market downturn, fading defense momentum, and FCF headwind from incremental capex for new product development.”
“Over the past two months, we have noticed in our coverage that last year’s laggards (e.g., MDA, TFII and CJT) and idiosyncratic stories (e.g., CAE and BBD.B) have outperformed larger-cap or higher-quality names (railroads and waste),” he concluded. “The year has just started so we could potentially see volatility as macro data comes out, geopolitical landscape evolves, and management teams provide/update 2026 outlooks. ”
Mr. Yaghi also made these target revisions:
- Air Canada (AC-T, “sector outperform”) to $26.50 from $25. Average: $23.23.
- CAE Inc. (CAE-T, “sector outperform”) to $57 from $49. Average: $49.67.
- Chorus Aviation Inc. (CHR-T, “sector perform”) to $26 from $27. Average: $30.
- Cargojet Inc. (CJT-T, “sector outperform”) to $115 from $105. Average: $106.51.
- Canadian National Railway Co. (CNR-T, “sector outperform”) to $163 from $160. Average: $160.06.
- Canadian Pacific Kansas City Ltd. (CP-T, “sector outperform”) to $124 from $119. Average: $119.35.
- Exchange Income Corp. (EIF-T, “sector outperform”) to $105 from $90. Average: $94.43.
- GFL Environmental Inc. (GFL-N/GFL-T, “sector outperform”) to US$57 from US$58. Average: US$55.44.
- MDA Space Ltd. (MDA-T, “sector outperform”) to $42 from $38. Average: $40.83.
- Mullen Group Ltd. (MTL-T, “sector perform”) to $18.50 from $16. Average: $16.55.
- Secure Waste Management Corp. (SES-T, “sector perform”) to $20 from $21.50. Average: $21.17.
- TFI International Inc. (TFII-T, “sector perform”) to $170 from $140. Average: $118.29.
- Waste Connections Inc. (WCN-N/WCN-T, “sector outperform”) to US$204 from US$210. Average: US$204.14.
“Based on the sector themes above and our assessment of risk/reward for each stock, we continue to view CAE as our top pick for 2026, as we highlighted in our Focus On 2026 report. In addition, we like EIF and MDA in aerospace & defense, GFL and WCN in waste, CP, CNR and CJT in freight, and AC in airlines. For investors focused on earnings growth, we expect AC, CAE, CP, EIF, TFII and TRZ to grow EBITDA or EPS (depending on the name) by more than 10 per cent this year. However, we feel Street expectations for 2026 are generally more optimistic across the board, particularly for TFII and AC, so stock performances may not be perfectly aligned with the earnings growth profiles. For long-term value investors, we note AC, CHR, CJT, CNR, GFL, MTL and SES are trading below their historical averages (some are near or below trough) as well as respective peer groups. “Overall, among our SO-rated stocks, we view GFL and WCN as the best defensive stocks with reasonable valuations, while CNR and CJT could offer the most torque on a macro rebound given their depressed valuations.”
Elsewhere, CIBC’s Krista Friesen downgraded Bombardier to “neutral” from “outperformer” with a $290 target, up from $230.
“Following a nearly 140-per-cent share price appreciation in 2025 (and an additional 16 per cent year-to-date), BBD now trades at 14.6 times 2027 consensus EBITDA, placing it at the upper end of its historical valuation range. While we continue to view the company as high quality and remain constructive on the longer-term fundamentals, we believe the current risk/reward has become less compelling at these levels. As such, we see more attractive risk/reward setups elsewhere in our coverage,” she said.
Meanwhile, BMO’s Fadi Chamoun hiked his Bombardier target to $300 from $240 with an “outperform” rating.
“While valuation has largely re-rated and now sits at levels consistent with peers and the broader A&D market, BBD’s fundamentals in the core business aircraft delivery segment remain solid,” he said. “The company also continues to benefit from a multi-year runway for growth in its higher-margin Defense and Aftermarket businesses.
“With leverage continuing to decline and strong free cash flow conversion, we believe the stock should continue to compound in line with earnings moving forward.”
In a client report titled Has the Natural Gas Trade Been Deferred or Derailed? We Think it is the Former (at Worst), Scotia Capital analyst Cameron Bean reaffirmed his positive view of equities in the space.
“In early December 2025, the NYMEX bull market appeared well on its way; however concerns over high U.S. natural gas production levels, warmer-than-expected late December and early January temperatures, volatile global natural gas prices, and sluggish power generation demand have driven the 2026 NYMEX strip down by nearly US$1/mmBtu [metric million British thermal units] over the last six weeks,” he explained. “While we see risks from each of these factors, our updated forecasts continue to show supply deficits in both the U.S. and Western Canada.
“Based on this, we believe the sell-off is overdone and expect both natural gas commodity and equity prices to increase over the next 12 months. If our base case supply and demand forecasts prevail, we expect NYMEX prices to exceedUS$5/mmBtuby 2H/25 and believe the AECO differential will tighten below US$1.25/mmBtuat the same time. Our best ideas in the space balance our bullish views on the commodity with downside protection (because we can certainly be wrong about the commodity). Our top picks are TPZ, SDE, PEY, and EXE, with BIR and AR as our favorite options for natural gas torque.”
Mr. Bean updated his estimates to account for fourth-quarter 2025 actual commodity prices and adjusted his forward forecasts based on Scotia’s price deck as well as strip prices. That led to a series of target adjustments, including:
- Arc Resources Ltd. (ARX-T, “sector perform”) to $28 from $30. Average: $31.33.
- Logan Energy Corp. (LGN-X, “sector outperform”) to $1.50 from $1.65. Average: $1.21.
- Nuvista Energy Ltd. (NVA-T, “sector perform”) to $18.50 from $18. Average: $18.
- Peyto Exploration & Development Corp. (PEY-T, “sector outperform”) to $27 from $24. Average: $23.57.
- Paramount Resources Ltd. (POU-T, “sector outperform”) to $31 from $29. Average: $26.70.
- Spartan Delta Corp. (SDE-T, “sector outperform”) to $11 from $8. Average: $9.
- Tourmaline Oil Corp. (TOU-T, “sector outperform”) to $75 from $80. Average: $72.55.
While Boralex Inc. (BLX-T) saw “stronger” power generation in the fourth quarter, National Bank Financial analyst Baltej Sidhu emphasizes its performance continues to fall short of long-term averages, leading him to lower his forecast for the Kingsey Falls, Que.-based company.
“Ahead of Q4E results, we have updated our estimates to reflect slightly weaker consolidated generation and the removal of the quarterly contribution from its Ontario BESS assets (Hagersville and Sanjon), as COD comes later than we anticipated (approximately $10-million reduction to our Q4/25E adj. EBITDA),” he explained. “For Q4/25E, we expect generation to improve sequentially versus earlier quarters in 2025, though to come in modestly below LTA at 2,533 GWh (was 2,706 GWh), representing 96 per cent of LTA. We saw strength in BLX’s Canadian wind portfolio (estimated at 105 per cent of LTA); however, it was insufficient to offset softer generation across the remainder of its portfolio. With that, and among other calibrations, our Q4E EBITDA forecast declines to $206-million (was $231-million; consensus $224-million).
“Looking to 2026E, we modestly reduce generation by 30 GWh to reflect downtime related to the Grand Camp repowering project (COD expected in H2/26E) as we estimate an six-month shutdown, delayed contribution from Hagersville in Q1/26E (now assuming two-thirds of a full-quarter contribution), and minor hydro LTA recalibrations.”
Mr. Sidhu called its fourth-quarter growth “largely a timing story rather than an execution or cost issue” with its Sanjgon (formerly Tilbury) battery energy storage system (BESS) reaching commissioning late in the year following a short authorization-related delay. However, he now sees project ramp-ups setting the stage for near-term growth.
“The 300MW/1200MWh Hagersville BESS project, initially expected online in Q4/25E, should reach COD in the coming weeks, also with no incremental costs,” he explained. “Further out, BLX retains optionality for growth, including potential FID acceleration for two U.S. solar farms in New York (450 MW total), the 125 MW/500 MWh Oxford battery storage project (Ontario, COD ’27E), and the 400 MW Des Neiges Sud wind project (Quebec, COD ’27E) alongside various projects in France, supporting long-term growth visibility. We expect BLX to be an active participant in various RFPs during 2026E including those for: Hydro-Quebec, Ontario LT2, France, and UK AR7a.”
While he cut his 2026 EBITDA forecast, largely to reflect updated forward pricing assumptions for France power pricing, Mr. Sidhu emphasized Boralex possesses “ample” liquidity, which he thinks “anchors growth.”
“BLX maintains strong financial flexibility with $811-million in liquidity as of Q3, which we believe positions it well to fund its organic development plans (targets 17-per-cent installed capacity CAGR [compound annual growth rate] to 2030),” he said. “BLX has multiple levers to support growth including refinancing, incremental leverage, or asset sell-downs; where we expect U.S. or UK projects could be a lever. BLX also has access to over $400-million in ITC credits to support growth in Canada.”
Reiterating his “outperform” rating, Mr. Sidhu reduced his target for Boralex shares to $39 from a Street-high of $41. The average target is $35.
“With our model update, we reflected the assumed benefit of the ITC proceeds for its Apuiat wind project and two Ontario battery projects - Sanjon reached COD in late Q4/25, and Hagersville is expected to COD through the end of January,” he said. “We assume BLX will immediately deploy the proceeds to repay bridge financing associated with these projects, generating meaningful interest savings of approximately $14 mln annually beginning in 2027E, which translates to a positive $1.55/sh impact to our target price. Additional model refinements—including debt amortization adjustments, hydro opex/MWh re-calibrations, and stronger pricing at one of its U.S. wind farms—account for the remaining puts and takes and drive the net~$2/sh downward revision to our target price."
Pointing to “persistent balance sheet risk” and a “stretched” valuation, TD Cowen analyst Sean Steuart downgraded Vancouver-based Mercer International Inc. (MERC-Q) to a “sell” rating from “hold” previously following “a sharp share price recovery from cyclical lows since mid-November 2025.”
“Given high balance sheet leverage and expected negative free cash flow over our forecast horizon, we struggle to reconcile recent share price strength (up more than 70 per cent from a very low base over the past two months),” he said. “We see limited options for deleveraging MERC’s balance sheet even as pulp markets reach a cyclical floor. There are more compelling risk/reward opportunities elsewhere in the sector.”
Mr. Steuart emphasized the forest products company does not face imminent liquidity and balance sheet constraints, however he thinks its debt load and interest burden are high.
“Trailing net debt-to-cap is 80 per cent, and we expect that ratio will increase to almost 90 per cent by the end of 2027,” he noted. “With an almost three-year window before the next note maturity in 2028, MERC has a reasonable liquidity cushion ($376-million at the end of Q3/25), but our cumulative FCF forecast between Q4/25 and the end of 2027 is ($47) million. The annual interest burden of $123-million undermines FCF potential. Management previously qualified revolver renewal conversations with lending counterparties as constructive.
“Management is pulling levers to preserve available liquidity. We expect that 2026 and 2027 capex will reach the lowest annual levels since 2017. The company is also focused on reducing working capital by $20-million in the near term and on a run-rate annual cost reductions of $100-million by year-end 2026.”
Seeing global pulp markets “passing the cyclical trough” and mill inventories “remain elevated,” he raised his 12-month target price to US$2.25 per share from $2.00 to reflect the inclusion of 2027 estimates in his valuation as well as adjustments to expected capex/working capital over his forecast horizon.
“Our 2025 and 2026 earnings estimates are declining, reflecting modest pulp price forecast revisions plus other adjustments to volume assumptions,” he noted.
“Stretched valuation. At 6.7 times 2027 estimated EV/EBITDA, MERC trades in-line with its global peer group, which we believe is excessive given balance sheet risk.”
Citi analyst Patrick Cunningham sees a “slowly improving” environment for North American specialty chemicals companies as fourth-quarter 2025 earnings season ramps up.
“We expect specialty chemicals to see modest low-single-digit organic growth, mostly driven by pockets of structural pricing and select end-markets strength,” he said. “That said, with new tariff announcements on select members of NATO, we believe investor focus will center around demand uncertainty and the raw materials basket. While it remains to be seen whether the new tariff announcements on Denmark, Norway, Sweden, the UK, France, Germany, Netherlands, and Finland will be implemented, we still believe the broader coverage universe may be caught up in these concerns. While specialty chems had been generally insulated on most direct tariff impacts in 2025 due to ‘local-for-local’ supply chains, we note that further tariff risks would likely further push out a broader recovery.”
Pointing to “marginally better FX and top-line environment while noting potential fresh tariff risks,” Mr. Cunningham made modest changes across his coverage universe to his fourth-quarter 2025 and full-year 2026 projects while increasing “significantly” his projections for lithium producers, including Lithium Royalty Corp. (LIRC-T).
However, he downgraded his rating for the Toronto-based company to “neutral” from “buy” to reflect limited upside following its definitive agreement to be acquired by Altius Minerals Corp. (ALS-T) in a stock-and-cash deal valued at about $520-million, which has sent its shares higher by more than 40 per cent.
“With LIRC ultimately trading near the implied transaction value tied to Altius Minerals’ share price, we downgrade LIRC from Buy to Neutral,” he said. “We continue to view the FY26 setup for lithium fundamentals favorably, with robust ESS demand growth supporting prices. At the same time, we are closely monitoring supply dynamics like the Jianxiawo mine restart.”
Mr. Cunningham raised his target for Lithium Royalty shares to $10.60 from $9. The average is $8.75.
TD Cowen analyst John Shao is predicting Celestica Inc. (CLS-N, CLS-T) will report better-than-expected fourth-quarter 2025 results on Jan. 28 and see the benefits of “consistent execution” through the current fiscal year.
Assuming coverage of the Toronto-based tech manufacturer from colleague Daniel Chan, he thinks there is “little downside risk” for the quarterly release.
“We forecast Q4/25 total revenue of $3.6-billion, up 42 per cent year-over-year,” he said. “We estimate Advanced Technology Solutions (ATS) revenue of $798-million, down 1 per cent year-over-year; Communications revenue of $2.1-billion, up 78 per cent year-over-year; and Enterprise revenue of $717-million, up 28 per cent year-over-year. We forecast EBIAT of $280-million, or 7.7-per-cent EBIAT margin, up 90bps year-over-year. We also expect EPS of $1.85.
“We believe the upward revisions to guidance will continue, with previous EPS revisions raised an average 6 per cent for the first time (in January) following the initial guidance set in October. We currently forecast 2026 revenue of $17.1-billion and EPS of $9.27, well above consensus at $8.42 due to what we believe is a larger Networking opportunity in 2026.”
In a client note released before the bell, Mr. Shao argues Celestica has “undoubtedly earned its premium valuation given its consistent execution, customer profile, supply chain expertise, strong market tailwinds, and most importantly, strong management team.”
“We believe none of these will change in 2026 and we will continue to like the company for the same reasons,” he added.
“In an ideal scenario, its execution and continuously improving financials should drive the stock’s consistent appreciation. Realistically though, we believe the CLS trade is intricately tied to the broader AI trade which exhibits increasing volatility and fragility. As much as we are excited about CLS’ upside potential, we are fully aware of the associated risks. It is this risk-based approach that leads us to maintain our HOLD rating. Admittedly, we acknowledge the situation remains highly fluid and we will revisit our rating should either of the following developments occur: More clarity from Celestica’s digital-native customer regarding the status of its ASIC program, funding, program size, and timeline; Customer concentration improves; Opportunistic entry points should future volatility weaken the stock price.”
With his “hold” rating, Mr. Shao reaffirmed the firm’s target of US$305. The average on the Street is US$370.75.
“Despite our belief that the company is a major beneficiary of accelerated AI-related infrastructure build-outs from its hyperscale cloud customers, we rate Celestica HOLD as its valuation currently exceeds industry leaders,” he said. “We believe we are in the early stages of what could be a multi-year investment cycle with long-term commitments. Current demand for proprietary compute programs is being followed by an 800G networking upgrade cycle, expected to accelerate in 2025, and storage solutions. In the ATS segment, we believe the long-term growth target of 10 per cent is achievable, given the large opportunity for outsourced manufacturing, particularly in markets that require a high level of engineering expertise.”
National Bank Financial analyst Rabi Nizami sees Omai Gold Mines Corp. (OMG-X) “leveraging a sizeable and recent 6.5 Moz resource base and advantages of a past-producing mine site to deliver one of the fastest advancing development opportunities in the Guiana Shield.”
He initiated coverage of the Toronto-based company, which is re-establishing one of South America’s largest historic gold mines, with an “outperform” rating, emphasizing its potential scale and speed to production at the 100-per-cent-owned property.
“While the market has recognized the rapid growth of total resources (OMG up 479-per-cent last 12-month return vs. XGD up 165 per cent), we believe Omai’s approximately US$790-million market cap remains undervalued in advance of further economic studies and accelerated permitting milestones, which we believe position the company as a prime M&A target for Senior/Intermediate gold producers to add a large and readily advanceable gold project in a friendly mining jurisdiction in Guyana,” said Mr. Nizami.
“We model a combined open pit and underground mining operation capable of nearly 300 koz annual production over a 16+ year mine life, NPV5% [net present value at a 5-per-cent discount rate] of US$2.4 billion with 25-per-cent IRR [internal rate of return] at US$3,000/oz gold upon construction start (US$4.4 billion and 40 per cent at US$4,000 gold).”
The analyst said the project possesses several notable past-producing advantages, including “established road access, existing tailings infrastructure, and regulatory clarity to permit rapidly in Guyana.”
“Drilling success, including deep shear-hosted intercepts 600–700 metres below the deposit, reinforces the long-term underground potential and the emergence of a 10 Moz district," he added
Despite the “scale and momentum,” Mr. Nizami noted Omai currently trades at a discounted valuation with shares reflecting a price-to-net-asset-value multiple of 0.36 times on his “conservative” base case and at an enterprise value of US$116 per shares (versus peers at an average 0.66 times and US$275/oz), noting that is “well below comparable valuations paid in recent transactions and meaningfully below comparable resource-stage peers.”
He set a target of $3 per share. The current average is $2.48.
“Our target price is based on a 0.65 times multiple to NAVPS plus corporate adjustments,” he said. “We view the upcoming MRE/PEA, permits, pit dewatering, and continued infill/exploration drilling as catalysts to drive a re-rating and entice an M&A takeout.
“Our thesis considers: (i) a legacy mining project that can leverage a friendly permitting environment in Guyana and advance quickly to a construction-ready stage, ii) attractive project economics and discounted valuation relative to our modeled expectations, and iii) clear M&A target that we believe should be of interest to Intermediate and Senior producers,” he said. “Our target price is based on a 0.65-times multiple to NAVPS, which is consistent with peers under NBCM coverage. We ascribe a Speculative risk rating given the stage of the company where several de-risking initiatives including further studies, permitting, funding and development milestones are to be achieved prior to generating positive free cash flow.”
In a separate report, Mr. Nizami resumed coverage of Bravo Mining Corp. (BRVO-X) following its $86-million public share issuance and an additional $35-million private placement with Orion Mine Finance, emphasizing it is now “well capitalized to de-risk” and explore its Luanga project in Brazil.
“The entry of Orion, a respected mining-focused private equity group is set to bring validation of technical merit and economic potential following the 2025 PEA and ahead of further advanced engineering and technical studies,” he said. “Orion has provided a non-binding term sheet for an up to US$300-million financing package alongside the pending private placement.”
“We estimate a pro forma cash position of $140-million (Canadian), which is significant and represents 22 per cent of pro forma market capitalization of $625-millionn. We expect the funds to fully cover the Luanga project through the upcoming de-risking milestones covering metallurgical testing, Preliminary Feasibility Study (mid-2026) and Feasibility Study stages, while leaving ample cash for aggressive resource expansion and regional drilling. We expect the company to outline new budgets and a refreshed exploration outlook in the coming months.”
Reaffirming his “outperform” rating for Bravo shares, Mr. Nizami said the Toronto-based company provides investors with “torque” to platinum-group metals (PGMs).
“The rally in PGMs (Pt+Pd+Rh) has brought attention back to the sector, and highlights a scarcity of PGM development projects in safe jurisdictions,” he explained. “The Brazilian government recently selected Bravo as anchor tenant for a newly-created Barcarena free trade zone, which further opens the company to global M&A interest.”
“The 100-per-cent-owned Luanga project is one of the few large-scale PGM open-pittable deposits globally, located outside major geopolitical risks and labour or infrastructure challenges (for contrast, global PGM supply is currently tied mostly to Russia and South Africa). The project’s unique address near other permitted precedent mines and ready rail access could mean faster response time to develop and gain access to global PGM smelter markets; this could differentiate Luanga from PGM development opportunities elsewhere. Bravo’s anchor position to lead development of a PGM smelter within a newly created free trade zone in Brazil further opens the company to global M&A interest.”
The analyst bumped his target for Bravo shares to $7.50 from $7. The average is $6.
In other analyst actions:
* With the results of a preliminary economic assessment for its Kemess project in British Columbia, BMO’s Raj Ray upgraded Centerra Gold Inc. (CG-T) to “outperform” from “market perform” with a $32 target, jumping from $20, while Raymond James’ Brian MacArthur increased his target to $27 from $24.50, keeping a “market perform” rating. The average is $22.52.
“Kemess is a relatively low capital intensity, long-life asset that offers attractive economics and adds critical mass/growth to Centerra’s North American portfolio alongside the flagship Mt Milligan copper-gold operations (BC, Canada),” said Mr. Ray.
* In response to the release of a PEA for its El Tigre underground deposit in Mexico, Stifel’s Cole McGill raised his Silver Tiger Metals Inc. (SLVR-X) target to $1.70 from $1.30, which is the average, with a “buy” rating.
* In a fourth-quarter earnings preview for North American less-than-truckload transportation companies, Stifel’s J. Bruce Chan raised his TFI International Inc. (TFII-N, TFII-T) target to US$113 from US$110 with a “hold” rating. The average is US$118.45.
“Our base case expectation is for mid-to-high single digit percentage organic and regulatory-driven attrition in long-haul over-the-road (OTR) supply this year. While we expect significantly less supply impact for Less-than-Truckload (LTL), we believe tightening in truckload creates marginal demand spillover, as well as pricing support, bolstering top line model assumptions for the industry. That thesis supports our broadly favorable disposition toward the LTL group, which has already seen resilient pricing through a historically long freight downturn, despite weak industrial demand trends. One of our core assumptions is that demand remains stable-to-slightly improving, but we’re mindful of significant tail risk this year. Those risks include geopolitical impacts to diesel prices—modest upward moves being accretive to fuel surcharges, while steeper or more significant moves would be demand destructive to an already inflation-sensitive economy, in our view. Technology is creating more tangible opportunities for self-help margin improvement, but some carriers are showing more effective deployment and change management than others, and we think it’s typically those that have historically demonstrated better operational execution. Multiples are no longer ‘cheap’, but stocks are still being valued on trough earnings, so we think there’s still opportunity ahead," he said.