Inside the Market’s roundup of some of today’s key analyst actions
With the expectation Bank of Montreal’s (BMO-T) return on equity gap to its peers will “narrow materially,” TD Cowen analyst Mario Mendonca upgraded to “buy” from “hold” on Wednesday.
“We view BMO’s new time stamp (exit 2027 at 15 per cent) on ROE gains very favourably,” he said. “Focusing on BMO-specific drivers (U.S. NIM, U.S. loan growth, PCLs [provisions for credit losses], and buybacks), we now expect BMO’s ROE to climb 300bps higher over the next 2 years (below the target), outpacing the group by 150 basis points. We raised our estimates (approximately 9 per cent in 2027).”
In a client report released before the bell, Mr. Mendonca emphasized BMO has “long had an ROE disadvantage vs. peers,” however he’s increasingly bullish after the bank recently changed its ROE guidance from 15 per cent in the medium term to 15 per cent exiting 2027.
“Through stronger growth in capital market revenue and a focus on efficiency, BMO narrowed the ROE gap to only 60-80 basis points in 2021/22 and saw its P/B match the group average,” he said. “The relative ROE gains came undone not long after the BOTW deal closed early 2023, resulting in BMO reporting an 11.3-per-cent ROE in 2025, a nearly 300 basis points gap vs. peers. Assuming a reasonable level of buybacks (consistent with a 12.5-per-cent CET1) and a 15-per-cent ROE late in 2027, we estimate a 14-per-cent-plus increase in 2027E cons. EPS. Notably, increases in estimates of 10 per cent or greater are very rare.”
“Our estimates have BMO’s ROE improving 300 basis points over the next two years versus 150 basis point for the group. BMO-specific factors include: 1) stronger NIM expansion in the U.S. supported by a healthy improvement in deposit mix, reflecting BMO’s new treasury management capabilities; 2) improving loan growth in the US in H2/26 consistent with the completion of optimization efforts and the strong growth evident at US banks; 3) improving PCLs (not in domestic consumer) taking the bank’s PCLs ratio down to the group average but, importantly, not below the group average; and 4) material share repurchases consistent with a 12.5 per cent CET1 and further US balance sheet optimization in H1/26.”
Also emphasizing “all banks would benefit, not just BMO, from robust macro picture,” Mr. Mendonca raised his target for BMO shares to $209 from $184. The average target on the Street is $187.08, according to LSEG data.
“We can construct a highly bullish macro picture, reflecting strong capital markets, buoyant 5-year bond yield (supports NIM expansion), robust loan growth, and strong equity markets (supporting WM); that would comfortably lead BMO to a 15-per-cent ROE,” he said. “The problem with this outlook is that it is somewhat improbable, and it would support all banks, leaving BMO’s ROE disadvantage perhaps only slightly lower than it is today.”
“Our view on BMO reflects: a) good progress in optimization efforts in the US, b) outlook for lower PCLs, c) strong capital markets performance, d) strong buyback activity, e) positive operating leverage. We believe investors will pay closer attention to ROE progression towards management guidance of 15 per cent exiting 2027.”
National Bank Financial analyst Vishal Shreedhar predicts a “relatively consistent” performance and extra week of results will drive “strong” earnings per share growth for Loblaw Companies Ltd.’s (L-T) fourth quarter of fiscal 2025.
Ahead of the Feb. 25 release, he’s projecting EPS of 64 cents, which is 2 cents lower than the current consensus forecast on the Street but 9 cents higher than the result of the same period a year ago. He attributes the 16.9-per-cent year-over-year to “positive Food Retail same-store sales growth, continued momentum in Drug Retail (SDM), benefits from ongoing growth/efficiency programs, share repurchases, and an extra week, partly offset by higher D&A and interest expense.”
“We forecast FR sssg of 1.7 per cent, moderating sequentially from 2.0 per cent in Q3/25 (tougher compares; industry sq. ft. growth),” said Mr. Shreedhar in a client note. “Intensifying competitive intensity due to sq. ft. growth is a concern; however, our analysis suggests that competitive pressure remains manageable, for now (margins remain healthy). StatsCan data suggests Q4/25 inflation was 4.4 per cent (vs. 3.6 per cent in Q3/25). Accelerating food inflation, while generally positive for grocery stocks, may draw political attention amid affordability concerns. Notwithstanding, as we previously noted, food store prices in Canada are, in part, driven by supply chain, global commodity prices, among other factors.
“We expect continued strength in Shoppers Drug Mart, reflecting resilient trends in front store (cycling the exit of electronics last year, heightened flu trends, strength in beauty) as well as Rx (expanded scope of care, acute chronic scripts, specialty drugs, etc.).”
For 2026, the analyst is now modelling a further 8-per-cent year-over-year EPS gain, noting it will have one fewer week, which he thinks added 2 per cent to growth in 2025. He notes Loblaw’s financial framework calls for EPS growth of 8-10 per cent year-over-year.
“We expect continued benefits from new store openings (approximately 80 targeted in 2025, and a similar cadence in 2026, including 5 new T&T stores in the U.S.),” he said. “We view Loblaw’s over-indexing to discount stores to remain a tailwind to sssg; NIQ data reflects discount continues to gain channel share in grocery+drug+mass.
“Continued growth in e-commerce: We expect the partnership with Uber Eats to be beneficial to sssg in food and grocery. In addition, recall we noted that SDM is expected to have a renewed approach to strategy with the new President, Gregers Wedell-Wedellsborg, joining January 26, 2026 (online sales was indicated to be a growth opportunity). NBCM models SDM sssg of 2.5 per cent (front store 2.0 per cent, and Rx 3.0 per cent).”
After also emphasizing recent retailer commentary “points to ongoing consumer resilience,” suggesting real estate expansion, a focus on offering convenience (expedited delivery), and an ongoing consumer focus on value, Mr. Shreedhar raised his target for Loblaw shares to $66 from $62, maintaining an “outperform” rating, in response to a roll-forward of his valuation period. The average target on the Street is $66.46, according to LSEG data.
“We maintain a favourable view on L and recommend it as our preferred grocer supported by: (i) Benefits from improvement initiatives; (ii) Ongoing stable EPS growth; and (iii) Favourable medium-term trends in discount and drug store (where L over-indexes). Given an uncertain macro backdrop, we favour proven staples such as L to add resiliency to portfolios,” said the analyst.
In a separate report, Mr. Shreedhar said the first-quarter results from Metro Inc.’s (MRU-T) quarterly results were “slightly light,” but he emphasized the impact of a nearly two-month shutdown of its frozen-food distribution centre in Toronto, which began last September, has now been fully addressed.
Shares of the Montreal-based grocer fell 5.5 per cent on Tuesday after it reported earnings per share for the quarter of $1.16, which was a penny below the analyst’s estimate and 4 cents under the Street’s expectation while a gain of 4 cents year-over-year. Food same-store sales growth was was 1.6 per cent, which was also below Mr. Shreedhar’s estimate (1.8 per cent) but up from 1.0 per cent last year.
“The DC disruption negatively impacted food same-store sales growth (approximately 30 basis points; unadjusted) and costs ($21.6-million in direct costs; adjusted),” he said. “Operations have now returned to normal. A return to consistent execution will improve investor sentiment.
“Consumer behaviour remains consistent with prior quarters (higher promo/private label etc.) and the discount/conventional gap was stable. Elevated inflation suggests that grocers with a strong discount offering will be preferred (MRU is on track to accelerate its discount development; 12 discount stores in F2026). Square foot growth is elevated vs. recent history; however we believe it is manageable for now as store openings are achieving targets. Our EPS estimates are revised to reflect higher interest/D&A: F2026 is $5.13 from $5.22 and F2027 is $5.62 from $5.72.”
Reiterating his “sector perform” rating for Metro shares, Mr. Shreedhar cut his target by $1 to $106. The current average is $115.33.
“We believe MRU is a solid company which has delivered solid long-term returns over various economic cycles. However, our coverage presents investments which offer a better comparative investment proposition,” he concluded.
Elsewhere, other analysts making adjustments include:
* RBC’s Irene Nattel to $112 from $113 with a “sector perform” rating.
“Q1/F26 results and KPIs solid and generally consistent with expectations despite noise from frozen DC disruption. Annual dividend increase 10 per cent as anticipated, marks 32nd consecutive year for MRU. With the frozen DC issues now in the rearview mirror, MRU well positioned to resume its LT average annual EPS growth target 8-10 per cent. In our view, [Tuesday’s] share price decline of 6 per cent appears overdone,” said Mr. Nattel.
* Desjardins Securities’ Chris Li to $99 from $105 with a “hold” rating.
“Despite the 3-per-cent miss on EPS, we believe MRU’s results reflect its resiliency, highlighted by solid food and pharmacy SSSG, stable margins and good cost control. Excluding transitory impacts, EPS growth of 8 per cent was within MRU’s 8–10-per-cent financial framework,” said Mr. Li. “But it is clear that persistent inflation is having a prolonged impact on the consumer. For now, we believe the industry will remain rational and MRU has levers to offset the incremental margin pressures. But investors will likely take a ‘wait and see’ approach.”
“MRU is a strong retailer and well-positioned to achieve 8–10-per-cent EPS growth. Limited return keeps our rating at Hold at this time.”
* Scotia’s John Zamparo to $103 from $110 with a “sector outperform” rating.
“Metro’s results suggest a market that’s become more competitive amid higher store growth, and investors were wary of precisely that,” said Mr. Zamparo. “As a result, we’re unsurprised at the market’s reaction, even if we consider it overdone. All else equal—i.e. excluding the freezer outage and calendar shift—SSS of greater than 2 per cent (food), 5 per cent(Rx) and 2 per cent (front-store) with very slight GM-percentage expansion and low SG&A growth is a credible result. This is a market, however, that expects more difficult conditions to become evident this year. For now, we believe MRU’s EPS growth target is intact.”
* CIBC’s Mark Petrie to $101 from $105 with a “neutral” rating.
“Our F2026 EBITDA forecast holds steady but EPS falls by 1 per cent as higher D&A and interest expense flows from FQ1 into the balance of the year. EPS growth now equates to 8.9 per cent, which puts MRU at the mid-point of its 8-10-per-cent medium-term framework. We moderate our multiple somewhat to 11.25 times EV/EBITDA (was 11.5 times) to account for slower growth,” said Mr. Petrie.
* BMO’s Étienne Ricard to $110 from $115 with an “outperform” rating.
“MRU’s FQ1/26 normalized food tonnage declined by 1.3 per cent due to increased competition from new industry square footage,” he said. “In the near term, we expect continued pressure on MRU’s top line from the increased competition, but with the Frozen DC issue now fully resolved, easier tonnage comps in H2/26, and continued execution in cost control, we believe MRU could still achieve the lower end of its financial framework of 8-10 per cent in FY26 (BMO: up 8 per cent).
* TD Cowen’s Michael Van Aelst to $113 from $118 with a “buy” rating.
“Excluding. holiday timing, the freezer issue and asset disposal gains/losses, Food SSSG would have been up 2.2 per cent and adj EPS growth 8.2 per cent, just below cons of 9 per cent and within management’s 8-10-per-cent growth algo. With the freezer issue behind it, we forecast 10-per-cent EPS growth in each of the next 3 quarters. MRU will need to deliver a few qtrs of more consistent EPS growth for valuation to recover and narrow the gap vs L,” said Mr. Van Aelst
Scotia Capital analyst Phil Hardie thinks AGF Management Ltd.’s (AGF.B-T) fourth-quarter results displayed “strong operational momentum” and “bookended a strong 2025 which saw the company demonstrate solid operational momentum with AUM [assets under management] rising by double digits and mutual fund net sales rate (as per centage of AUM) doubling the pace of the industry”
Shares of the Toronto-based firm jumped 6.4 per cent on Tuesday after it reported adjusted earnings per share of 62 cents, blowing past both Mr. Hardie’s 50-cent estimate and the consensus projection of 47-cents, driven by higher-than-forecast investment gains from AGF Capital Partners.
“Core EPS was up 32.8 per cent sequentially and 38 per cent year-over-year,” said the analyst. “Core Investment Management EBITDA/sh at $0.53 came in lighter than our est. of $0.58 due to higher than forecast opex, likely due to higher incentive compensation true-up given strong results through the year.
“Mutual fund net sales in the quarter were higher-than-anticipated and were the strongest since Q2/22, including during RRSP season. Core mutual fund flows (ex-institutional flows invested in mutual funds) of $282-million were ahead of our forecast of $230-million and higher than the already strong $262-million during the previous quarter. AGFs net sales rate (measured as a percentage of AUM) of 0.8 per cent significantly outpaced the industry rate of 0.5 per cent, and we anticipate momentum continuing into 2026.”
Maintaining his “sector perform” rating for AGF shares, Mr. Hardie raised his target to $18.25 from $17.50. The average on the Street is $18.
“AGF’s high exposure to equities is likely to provide torque to the stock price in an upward equity market swing, supported by a strong balance sheet that provides a floor to the stock in the event of a sell-off,” he explained. “AGF stock has seen a strong rally over the past few months likely benefiting from a confluence of factors that include robust equity markets and rising AUM, strengthening operational momentum, and in part by industry consolidation themes given recent activity in the space. Following a solid run, our expected one-year return has narrowed and while shares continue to trade at a wide discount, we remain on the sidelines given an uncertain market outlook.”
“The stock’s valuation is nearing multi-year highs but continues to trade at a steep discount to its peers despite demonstrated operational momentum and strategic progress. AGF has developed an alternative asset management platform where it has co-invested its own capital. We estimate that, including the value of these investments, AGF stock trades at just 4.1 times Adj. EV/EBITDA (next 12 months), approximately 2.7 times lower than what the conventional calculation indicates.”
Elsewhere, other analysts making target revisions include:
* Desjardins Securities’ Gary Ho to $20 from $18.50 with a “buy” rating.
“4Q was robust, with adjusted EPS of C$0.62 outpacing our forecast and consensus of C$0.47; this was driven by better alt contribution and lower tax rate. Retail net inflows of $282-million were ahead of our $171-million. SMA/ETF AUM grew 63 per cent year-over-year. We remain bullish on AGF with several near-term catalysts including a potential divvy increase in 1Q (path to dividend aristocrats inclusion in 2027), continued share buybacks and the acquisition of 25-per-cent stake in NHC,” said Mr. Ho.
* RBC’s Bart Dziarski to $22 from $18 with an “outperform” rating.
“Q4/25 Adjusted EPS was ahead of our forecast driven primarily by FV gains in AGF Capital Partners. Industry net flows are improving and AGF is continuing to outperform the industry driven by strong performance and distribution channel success. Valuation remains attractive in our view with AGF trading at a discount to peers on both EV/EBITDA and P/E multiples,” said Mr. Dziarski.
* TD Cowen’s Graham Ryding to $20 from $18 with a “buy” rating.
“Positives this quarter were solid retail flows, SMA AUM growth, an earnings beat, and constructive SG&A guidance. AGF’s FCF profile and balance sheet remain strong. Negatives were some institutional outflows, and the Kensington PE fund remains closed to redemptions. Valuation is still attractive despite the share price increase,” said Mr. Ryding.
BMO Nesbitt Burns analyst Raj Ray think “execution, risk compression and free cash flow inflection signal strong re-rating potential” for Montage Gold Corp. (MAU-T).
“In our opinion, Montage is entering the phase where time itself becomes a catalyst – every quarter closer to production compresses risk and expands valuation,” he said. “Despite Montage’s shares materially outperforming on a relative basis, cash flow valuations based on 2027 estimates are indicating a material discount and hence, subject to execution, the re-rating potential remains meaningful.”
In a note released before the bell, Mr. Ray doubled his target price for the Vancouver-based company, which continues to progress on the development of its its Kone mine in Cote d’Ivoire, to $20 from $10 “based on a new target methodology which looks to capture the staged re-rating potential as Montage approaches producer status by Q4/26.”
“While Montage’s strong share price performance in the last 12 months (up 488 per cent vs. GDX and GDXJ up 186 per cent and 210 per cent, respectively) has generated some discussions around relative valuation and potential upside from current levels, in our opinion, Montage is entering the phase where time itself becomes a catalyst – every quarter closer to production compresses risk and expands valuation," he added. “Looking at the cash flow valuations, it is quite apparent that Montage is trading at a significant discount (2027E FCF/EV yield at spot gold price of more than 30 per cent vs. peer average of 14 per cent).
“Delivering mineplan improvement and growth. As announced on Jan 20, 2026, Montage expects to produce gold through the oxide circuit by Q4/26 instead of Q2/27 which is beneficial from a peak funding point of view. Construction remains on-budget with more than US$545-million of capital committed (63 per cent of upfront capex). Company’s exploration program has also been delivering positive results towards supporting the target of maintaining more than 300koz beyond the first few years of production.”
With his new target of $20 per share, which is a new high on the Street and exceeds the average of $12.69, Mr. Ray reaffirmed his “outperform” rating.
“Furthermore, we believe Montage is well positioned to unlock incremental value through its strong exploration capability, which continues to identify and advance various opportunities across West Africa including the proposed acquisition of African Gold (A1G-ASX) with potential closing in Q2/26,” he said.
“The new target methodology is being driven by the visibility to near-term production, which then drives the investor rotation from optionality-driven capital to cash-flow driven capital and consequently expands the addressable shareholder base.”
Expecting it to be “a beneficiary of an AI-driven upgrade boom for high-speed data center switches, and strong growth in custom ASIC accelerated servers,” BofA Securities analyst Ruplu Bhattacharya initiated coverage of Celestica Inc. (CLS-N, CLS-T) with a “buy” recommendation.
“CLS has consistently maintained first-mover advantage in 400G, 800G and 1.6T switching, and we expect continued market share gains. F27 should be a strong year with many new programs ramping. We are above Street on F27 earnings and see upside to consensus estimates,” he said.
Ahead of Thursday’s release of the Toronto-based company’s fourth-quarter 2025 results, Mr. Bhattacharya thinks Celestica’s focus on engineering and design have driven high margins.
“Over the past 4–5 years, CLS has pivoted from pure Electronics Manufacturing Services (EMS) toward Hardware Platform Solutions (HPS)—an original and joint manufacturing model that allows it to be more involved in designing systems, vs. just building to a blueprint,“ he said. ”This has enabled CLS to showcase its engineering and design prowess and deliver higher margins vs. EMS peers (approximately 200 basis points). CLS invests in R&D more than those peers, which helped drive more HPS revenues. It is now investing in its 3.2T networking roadmap, and its latest 800G and 1.6T switch designs support LPO for optimized power efficiency, and we expect future generations will support CPO as well.
“2027 poised to be the ‘Year of the Digital Native’ ... We think Celestica will benefit from the OpenAI-Broadcom plan to deploy 10 gigawatts of OpenAI-designed AI accelerators. This project allows Celestica to showcase its full suite of ODM capabilities in design, manufacturing, orchestration and deployment. We expect it will drive multi-billion dollars of revenue for CLS in 2027 and beyond.”
He set a target of US$400 per share. The current average is US$370.75.
In other analyst actions:
* BMO’s Thanos Moschopoulos raised his MDA Space Ltd. (MDA-T) target to $45 from $36 with an “outperform” rating. The average is $41.17.
“We raise our target price to $45 following the announcement that MDA has signed an MOU with Hanwha Systems regarding a potential LEO defense constellation for Korea, and—more broadly — based on our view that MDA’s active pipeline of both defense and commercial opportunities justify a higher multiple,” he said. “We believe the Hanwha MOU could potentially translate into a $1-billion-plus contract award, but is likely contingent on Canada choosing Hanwha over Germany’s TKMS for the procurement of submarines, which isn’t a foregone conclusion.
“We believe MDA has other potential constellations in its pipeline.”
* In response to Tuesday’s announcement it has received its B.C. Environmental Assessment Certificate along with the federal impact statement for its 100-per-cent owned Eskay Creek Gold-Silver Project, Desjardins Securities’ Allison Carson hiked her Skeena Resources Ltd. (SKE-T) target to $50 from $39 with a “buy” rating. The average is $43.40.
“We view [Tuesday’s] news as a positive milestone and major derisking event for the company, which has been laser focused on permitting for the past several years,” she said.
* Ventum Capital Markets’ Adam Gill raised his Spartan Delta Corp. (SDE-T) target to $10.50 from $9 with a “buy” rating. The average is $9.21.
“We see several positives for Spartan Delta, both near term and long term,” she said. “In the near term, we believe that Spartan Delta will deliver a solid reserves report in the coming weeks on the back of strong drilling results from a robust drilling program. Long term, with a successful growth program in the Duvernay this year, we believe the Company will continue to unlock value from this land base.
“Looking at the sum-of-parts at US$60/Bbl WTI, we see potential for the stock to reach over $10.50/shr in the next year as the market prices in the next leg of growth. With that, we have increased our target to $10.50 and continue to have strong conviction in the story.”
* National Bank’s Adam Shine lowered his target for VerticalScope Holdings Inc. (FORA-T) to $4.50 from $5.50 with a “sector perform” rating ahead of the March 3 release of its fourth-quarter results, stressing “ongoing challenges” with its Programmatic business. The average target is $5.13.
“Despite restructuring that was expected to drive $5-million in annual savings starting in 2H25, margins remain pressured by top-line declines and investments in strategic areas like AI, audience growth, engagement, and data products,” said Mr. Shine. “FORA believes its communities can be better monetized in an AI-first discovery world, but it has more to do to engage with its 50-million-plus registered users on a logged-in basis to disintermediate search engines. Its AI-powered community assistant, FORA Frank, was rolled out to encourage postings and to help users ask better questions, but there are more applications to explore to enhance community experience and help advertisers. We estimate that search engines now account for less than 50 per cent of FORA’s traffic.”