Inside the Market’s roundup of some of today’s key analyst actions
National Bank Financial analyst Maxim Sytchev says valuations have “normalized” across his industrials coverage universe as first-quarter earning season approaches, however he is concerned about the potential for increased military spending and the fallout from a spike in oil prices to “crowd out infrastructure commitments.”
“In our last month’s deep dive (Contextualizing perceived AI threat via precedents – rebound is rarely immediate) we posited that previous technological or regulatory dislocations could pressure valuations for longer than investors are typically accustomed to,“ he said. ”In our conversations with the buy side, we believe the typical skew lands on “AI is not a structural risk to engineering” but despite many nodding heads there is very little buying as this space was very well owned to begin with. Additionally, recent geopolitical events are bound to lead to slower growth in the Middle East and the U.S. as some of the discretionary spending is likely to be redirected towards military re-armament (the Pentagon’s US$200-billion ask is a case in point). This is likely to directionally clash with 5-per-cent to 7-per-cent across organic growth expectations/guidance for the engineering cohort (hence less discussions around IIJA 2.0 or the size of Surface Transportation Bill reauthorization).
“As a result, our target prices have come down by an average of 11 per cent (with ATRL being the least impacted at down 4 per cent). On the flip side of the equation, the Canada-centric construction cohort is benefiting from incremental fund flow into much smaller market caps.”
In a client report released on Wednesday, Mr. Sytchev argued the sudden spike in oil has resurfaced downside risks for industrial companies, emphasizing in “most cases noted that recessions ... usually closely follow supply-driven price shocks.”
“Combined with a strengthening USD (though no inversion of the Treasury yield curve), the current backdrop – in light of historical precedents - suggests that should a recession materialize (an increasingly likely prospect should the conflict continue for an extended period), both multiple contraction and downward EPS revisions will work against our coverage," he warned.
“Our current base case estimates do not infer a major recession, with 2027 estimated year-over-year EPS growth for our coverage averaging 33 per cent (17 per cent excluding AFN (depressed 2026E comps) and GFL (’noise’ below the EBITDA line)) with a median of up 16 per cent. Looking at FCF for the same year, the average / median yield stands at a respective 7.2 per cent and 5.9 per cent. The latter metric is of course also flattered in most cases by the combination of recent share price pullbacks and resilient earnings expectations, and an extended period of oil prices over US$100 would almost certainly lead to downwards earnings revisions for a majority of our coverage. If this were to materialize, past precedents suggest a material underperformance from the broader industrial space, but select ‘pockets’ in the form of RBA (auto salvage is largely acyclical, while heavy equipment auctions are notably countercyclical) and GFL (inelastic demand, strong pricing power, and public sector funding exposure) – both currently top picks due to their defensive profiles, discounted valuation vs. history, and strong balance sheets – could provide a ‘hiding place’ for a potential major dislocation. On the other hand, consumer levered names like ACQ and more cyclically exposed distributors (FTT (copper) and WJX (manufacturing)) would likely see the most pronounced pullbacks."
Seeing its shares having “held in better than expected,” Mr. Sytchev downgraded Stella-Jones Inc. (SJ-T) to “sector perform” from “outperform” previously, citing a desire to “find a better entry point” and seeing “static earnings expectations at odds with share price rally and weak earnings breadth.”
“For a fairly steady eddy business, SJ’s share price amplitude throughout 2025 was pronounced, oscillating between $62 and getting all the way to north of $85 on the back of November’s Investor Day and the market’s search for inexpensive exposure towards utilities/transmission buildout,” he said. “Q4/25 was disappointing, but the shares fully recovered lost ground since. When stepping back and examining the evolution of the high watermark of consensus EBITDA forecasts going back to 2024 (we are now 3 per cent below now vs. Oct 2024 – a pretty long stretch of no absolute advancement – a necessary condition for a structural re-rate), we have not fully recaptured those highs while the Ties/Resi backdrop has arguably actually worsened, between some insourcing and generally high interest rate environment pressuring the verticals respectively. Poles volumes have been better than feared (in fact we saw growth in Q4/25) but it’s hard to argue for higher pricing already off very healthy levels. When weighing directional probabilities of where estimates might skew tactically, we are having difficulty seeing upward momentum. At 14.6 times P/E on 2026E shares are not expensive on a relative basis vs. the market but are up 170 basis points vs. own history since our Oct 2023 upgrade. A 4.6-per-cent FCF yield on 2027E is also at the lower end of our coverage universe (median/average being 5.9 per cent/7.2 per cent). We would like to have a better risk/reward skew to once again lean into the name.”
Mr. Sytchev’s target for shares of Stella-Jones fell to $95 from $107. The average target on the Street is $97.76, according to LSEG data.
His other target revisions for stocks listed on the TSX are:
- AutoCanada Inc. (ACQ-T, “sector perform”) to $22 from $24. Average: $24.18.
- Aecon Group Inc. (ARE-T, “outperform”) to $48 from $45. Average: $45.43.
- AtkinsRéalis Group Inc. (ATRL-T, “outperform”) to $108 from $113. Average: $119.29.
- Bird Construction Inc. (BDT-T, “outperform”) to $48 from $39. Average: $44.33.
- Colliers International Group Inc. (CIGI-Q/CIGI-T, “outperform”) to US$143 from US$160. Average: $169.28.
- Russel Metals Inc. (RUS-T, “sector perform”) to $51 from $56. Average: $54.50.
- Stantec Inc. (STN-T, “outperform”) to $143 from $163. Average: $164.33.
- Toromont Industries Ltd. (TIH-T, “outperform”) to $214 from $208. Average: $209.67.
- WSP Global Inc. (WSP-T, “outperform”) to $268 from $309. Average: $317.71.
“While there are no obvious glaring cases of a negative set-up combined with high expectations, we nevertheless see potential disappointment risk for the following companies: ACQ, ACM, AFN, BDGI, CIGI, RUS and SJ (note that many of these names have already corrected a lot),“ said Mr. Sytchev. ”The engineering cohort should not see any material performance risk but outlook body language will be scrutinized to then-th degree; construction / equipment (including RBA) / GFL should be resilient in the upcoming quarter. Overall top long ideas are ATS (new management, easy comps), RBA (market share gains, below typical valuation), GFL (defensive name that has been shunned), and BDT (construction has to be owned)."
RBC’s Head of Energy Research Greg Pardy said the first quarter of 2026 “turned the dominant narrative of a globally oversupplied oil market upside down amid a Middle East conflict that has unleashed the biggest supply shock in history.”
“We typically suggest that energy investors fade (sell) geopolitical events given a global energy market which historically burps and backfires in response to shocks of all kinds but ultimately lands on its feet,” he added. “The impact of the U.S.-Israeli attack on Iran will eventually become another energy chapter—albeit a big one.
“That said, in listening to the observations of RBC’s Commodity Strategist Helima Croft, it is difficult for us to envision a rapid path back to the placid energy market conditions which prevailed prior to February 28. This suggests to us that the pricing mechanism necessary to restore conditions could remain elevated for a period measured in years. This is the primary motive behind our recut mid-cycle WTI price of $75 —up from US$65 previously."
“Under our recut 2026 WTI outlook of US$84 and higher downstream margins, we estimate that Canada’s majors—Canadian Natural Resources, Suncor Energy, Cenovus Energy and Imperial Oil—would see their 2026 year/year cash flows rise 45 per cent to $61.3 billion, with free cash flows rising 75 per cent to $42.2 billion and current taxes rising 134 per cent to $13.5 billion."
In a client report previewing earnings season for Canadian integrated oil, oil sands and E&P companies titled A Bitter Windfall Draws Near, Mr. Pardy said his funds from operations per share estimates sit the consensus on the Street, however he declared “this is just the sideshow.”
“Indeed, the market will be probing deeply during first-quarter conference calls for insights surrounding the destination for the cash flow windfall ahead and of course whether energy producers are ready/willing to bolster their capital investment plans,” he explained.
After updating his 2026 and 2027 operating earnings and funds from operations estimates reflect first-quarter 2026 actual commodity prices, his updated commodity price outlook, disclosed share buybacks and other fine-tuning adjustments, Mr. Pardy increased his targets for stocks in his coverage universe.
His changes include:
- Athabasca Oil Corp. (ATH-T, “sector perform”) to $12 from $9. The average is $9.49.
- Baytex Energy Corp. (BTE-T, “sector perform”) to $6.50 from $5. Average: $5.58.
- Canadian Natural Resources Ltd. (CNQ-T, “outperform”) to $80 from $65. Average: $63.39.
- Cenovus Energy Inc. (CVE-T, “outperform”) to $42 from $32. Average: $37.02.
- Imperial Oil Ltd. (IMO-T, “underperform”) to $124 from $116. Average: $133.55.
- Ovintiv Inc. (OVV-N/OVV-T, “outperform”) to US$70 from US$55. Average: US$60
- Parex Resources Inc. (PXT-T, “sector perform”) to $32 from $28. Average: $25.90.
- Strathcona Resources Ltd. (SCR-T, “sector perform”) to $49 from $36. Average: $37.60.
- Suncor Energy Inc. (SU-T, “outperform”) to $100 from $89. Average: $89.59.
- Vermilion Energy Inc. (VET-T, “sector perform”) to $22 from $15. Average: $16.72.
“Stock positioning wise, quality matters, especially should the sector pullback sharply amid funds flow rotation catalyzed by an easing of tensions in the Middle East,” said Mr. Pardy. “It is not lost on us that energy producers are being heavily used as a temporary financial hedge against sectors which are being battered and bruised by elevated oil prices. Suncor Energy is our favorite integrated oil, Canadian Natural Resources is our favorite senior producer and Ovintiv is our Dark Horse pick—all of which are on our Global Energy Best Ideas List. Cenovus Energy and Cardinal Energy round out our Outperform roster.”
National Bank Financial analyst Alex Terentiew sees Heliostar Metals Ltd. (HSTR-X) as a “well funded, well managed and attractively priced growing gold producer with an achievable strategy of evolving into a mid-tier gold miner,” pointing to its two operating mines and “a clearly defined organic growth path focused on moving its flagship Ana Paula project in Guerrero, Mexico into construction next year.”
He initiated coverage of the Vancouver-based Mexico-focused junior gold producer and project developer with an “outperform” recommendation, touting its “strategic vision to become a mid-tier gold producer through advancing its organic growth pipeline.”
“Although Heliostar is currently a smaller gold producer, the company’s management team has proven their abilities to operate and successfully execute a plan, advancing its strategic objective of growing production towards 300 kozpa [thousand ounces per annum],” said Mr. Terentiew. “By optimizing its current mines to maximize cash flow, Heliostar has generated US$66-million in earnings since acquiring its two operating mines in July 2024 for a nominal price of US$5-million. As the company’s balance sheet continues to strengthen and permitting and technical advances are made at Ana Paula, we see risks to achieving its growth objectives diminishing, and we expect the company’s share price steadily move higher as Heliostar re-rates to mid-tier status.
“Heliostar is capable of funding the majority of Ana Paula’s US$300 million capital cost through self-generated FCF. We forecast operating cash flow in 2026 and 2027 of US$311-million (US$235-million at spot gold prices of US$4,500/oz), leaving a funding gap of only US$100-million to complete the project’s construction. We expect a debt facility to be secured in 2027 to fund the project, with no equity included in our forecasts.
The analyst thinks Heliostar is likely reach to reach gold production of 200-300,000 ounces per year at an “attractive” all-in sustaining cost of less than US$1,400 per ounce once the high-grade Ana Paula project is operational, which he forecasts to occur in 2029.
“We also see upside at Heliostar’s La Colorada and San Agustin mines, where exploration has strong potential to add incremental, low-risk and high-margin ounces to the medium-term outlook. Longer term, Heliostar’s portfolio presents potential for 300-400 koz to be produced annually,” he added.
Touting an “attractive” valuation, he set a target of $4.50 per share, pointing to an estimated total return of 86 per cent. The average is $4.96.
“As of Monday’s close, Heliostar was trading at 3.4 times our 2026 estimates on an EV/EBITDA basis and at 0.30 times P/NAV, compelling multiples, in our view, for a company with an attractive growth profile and recent track record of success,” said Mr. Terentiew. “Despite investments being made at Ana Paula, we forecast a small, albeit positive FCF yield in 2026 of 1 per cent, putting Heliostar in a good position to advance development at Ana Paula and pursue a robust exploration program across its portfolio. We ascribe a Speculative Risk rating as the company executes on its growth strategy.”
In a separate report, Mr. Terentiew initiated coverage of Luca Mining Corp. (LUCA-X) with an “outperform” rating, seeing it “pursuing a new approach to unlock substantial value from an older, underappreciated mine, Campo Morado in Mexico.”
He said the Vancouver-based company is now “taking advantage of changes in geology, as well as high gold and silver prices, to convert a former zinc mine into a gold mine.”
“By reinvesting in productivity and processing improvements at its Campo Morado mine and shifting production to higher gold grade zones, Luca is preparing to unlock substantial value and increase margins, converting this former high-grade zinc mine, into a precious metals focused, polymetallic operation,” he said. “At its second mine, Tahuehueto, Luca is similarly optimizing production and maximizing cash flow to establish this smaller operation as a profitable, albeit smaller mine with exploration and mine life upside.
“Growing production, declining costs, while also improving the production mix and cash margins. In 2026, we forecast payable AuEq production of 61 koz at an AISC of US$3,325/oz AuEq, generating net free cash flow of US$6 mln, after accounting for elevated levels of investment at both Tahueheuto and Campo Morado, in particular the Phase 1 expansion at year-end. Through incremental productivity improvement initiatives at both mines, we expect production to steadily rise until 2030, reaching 100 koz AuEq, with costs concurrently steadily declining to a competitive US$2,000/oz AuEq. With the productivity improvements and a change in mined grades, we expect gold and silver to contribute to more than 70 per cent of company-wide gross revenues long-term, up from approximately 60 per cent in 2025.”
Seeing an enticing valuation for investors, he set a target of $3.25 for Luca shares, representing an estimated total return of 132.1 per cent. The average is currently $3.42.
“The heavily discounted near-term valuation we think reflects uncertainty regarding Campo Morado expansion plans, with this risk to be reduced later this year with updated resource estimates and expansion plan study results,” said Mr. Terentiew. “We anticipate exploration drilling in 2026 to also add mine life, increasing Luca’s long-term value proposition. We ascribe a Speculative Risk rating as Luca is in the process of mine optimization.”
TD Cowen analyst Aaron MacNeil thinks Pembina Pipeline Corp. (PPL-T) “put forward a credible and competitive growth target” with a business update on Tuesday, which he called “thesis confirming” and predicts “should instill a level of investor confidence that we believe has been absent over the past year, in light of increased competitive threats and unexpected challenges (Alliance, Dow delay).”
The Calgary-based company outlined its “3Cs Strategy” (Capture, Connect, and Catalyze) alongside an increase to its fee-based adjusted EBITDA per share compound annual growth rate forecast to 5-7 per cent for 2026-2030 (was 4-6 per cent for 2023-2026).
“We view 5-7 per cent as competitive with its larger peers and note that Pembina also laid out $4-billion of credible projects under development with clear visibility to a near-term FID and in-service dates,” said Mr. MacNeil. “This compares to other companies in our coverage universe which either have shorter-duration growth targets or require more meaningful project FID’s and no clear project-level granularity underpinning growth rates.”
“Our increased 2026, 2027 and 2028 EBITDA estimates (up 2 per cent, 1 per cent, and 1 per cebt) reflect a more optimistic marketing segment outlook, driven by positive changes in Pembina’s frac spread exposure and hedging activity to date. We have also increased our total capital spending including equity contributions in 2027 and 2028 to better align with management’s guidance. In our previous note, we had assumed that 2025 was the base year for the company’s 5-7-per-cent EBITDA CAGR target. When using 2026 as the base year, we see the update as much more in-line with our expectations. As a result of this, we are making minimal changes to our 2026-2030 fee-based EBITDA estimates, which imply a 6.2-per-cent CAGR.”
Keeping his “hold” rating, Mr. MacNeill raised his target for Pembina shares to $65 from $63. The average is $61.63.
“Consistent with several of its peers and the broader Canadian energy sector, Pembina currently trades at a 2026E EV/EBITDA multiple of 12.6 times, above its 10-year mean valuation of 11.0 times, which we believe is warranted given the increasingly clear visibility to long-term growth that was outlined in this business update, as well as its strong long-term track record and a strict adherence to its financial guardrails,” he said. “We view this update as confirmation of our estimates rather than incremental, but we are updating our near-term marketing assumptions given prevailing commodity price changes.”
Elsewhere, others making revisions include:
* CIBC’s Robert Catellier to $66 from $64 with an “outperformer” rating.
“PPL’s business update reflects a strong underlying outlook, supported by a competitive fee-based EBITDA profile and momentum in business development. The update lacked a project FID, which we attribute to timing and we expect further FIDs in 2026. With the recent rise in commodity prices, the next catalyst for shares would come from increased guidance,” said Mr. Catellier.
* ATB Cormark’s Nate Heywood to $66 from $64 with an “outperform” rating.
“Overall, we view the update as positive, with a favourable macro backdrop and robust growth outlook set to drive management’s guide for a 5-7-per-cent fee-based adjusted EBITDA CAGR. PPL is uniquely positioned to capitalize on a transformational shift in the WCSB, supported by structural macro tailwinds and a disciplined growth strategy. The WCSB is supported by increased global access and domestic demand tailwinds around data centres and petrochemical supply. PPL’s ‘3Cs’ strategy (Capture, Connect, and Catalyze) will leverage the existing asset portfolio, connect global markets through coastline access and catalyze new demand centres. The 5-7-per-cent fee-based EBITDA CAGR through 2030 is primarily driven by volume growth and sanctioned growth projects, further supported by management’s confidence in the unsanctioned project backlog. We have increased our fee-based adjusted EBITDA growth outlook though our 2030 forecast window and are increasing our price target,” said Mr. Heywood.
* Barclays’ Theresa Chen to $63 from $62 with an “overweight” rating.
“We think [Tuesday’s] underperformance likely reflects positioning and a desire for additional clarity on medium-term growth projects. That said, PPL’s key projects appear to be advancing, if not nearing inflection. We think [Tuesday’s] update bolsters PPL’s fundamental outlook,” she said.
* National Bank’s Patrick Kenny to $63 from $61 with an “outperform” rating.
“Overall, integrating our revised commodity price deck in line with our E&P Research team, including WTI pricing of US$70/bbl long-term (was US$65/bbl),our target moves up $2 on the back of stronger Marketing contributions, which is based on a risk-adjusted dividend yield of 5.0 per cent (unchanged), applied to our 2027e dividend of $3.04/sh, an 13.25-times multiple (unchanged) of our 2027e Free-EBITDA and our DCF/sh valuation of $63.25 (was $62.00),” said Mr. Kenny. “Combined with more than 15-per-cent valuation upside from PPL’s unsecured growth backlog, we maintain our Outperform rating, highlighting an attractive entry point with the name trading at a 0.5-times discount to its 10-year average EV/EBITDA multiple of 12.7 times.”
* BMO’s Ben Pham to $63 to $60 with a “market perform” rating.
“We rate PPL shares Market Perform as we believe the shares are reasonably valued at current levels, though we like the well covered 4.5-per-cent dividend, strong balance sheet, and upside optionality to new potential projects such as the Greenlight Electricity project.,” said Mr. Pham.
In other analyst actions:
* BMO’s Tom MacKinnon increased his target for AGF Management Ltd. (AGF.B-T) by $1 to $20, keeping a “market perform” rating, ahead of the release of its first-quarter results on April 14. The average target is $20.05.
“While AGF’s retail gross sales and net flows have improved, its $60-billion AUM could be perceived as lacking scale in a business that increasingly demands significantly more scale, especially given on-going fee pressures. Given lack of scale, substantial revenue growth from buoyant equity markets (not always dependable) and/or cost control would appear to be the key earnings growth drivers,” said Mr. MacKinnon.
* Ahead of its Investor Day on April 14, Stifel’s Justin Keywood raised his Savaria Corp. (SIS-T) target to $31, matching the average, from $29 with a “buy” rating.
“Savaria, a global assisted-lift leader (stair-lifts/home elevators/commercial lifts/low-rise elevators), benefitting from aging demographics and preference to ‘age at home,’ is expected to unveil new 3-5 year targets April 14,” he said. “Savaria has a history of meeting ambitious goals, below. Most impressively was the 2-year target to expand EBITDA margins from 15.5 per cent to 20 per cent (now 21 per cent). We believe Savaria One’s next iteration and targets will be growth-focused ($1.1-billion-$1.3-billion sales, up 20-40 per cent) but with continued margin expansion from scale (100-200 basis points), suggesting value creation ahead. We are also encouraged by recent insider buying (March) at $25-26, near current prices. As Savaria sets and executes on new goals, valuation should rise towards mature elevator peers (11 times vs. 15 times) and with a higher market cap, S&P/TSX index inclusion is probable (at $2.3-billion), compounding success. Savaria’s strong balance sheet (only 1 times levered) supports such initiatives as our $31 target conservatively preempts new goals and reflects our rising conviction.”
* CIBC’s Christopher Thompson initiated coverage of Tenaz Energy Corp. (TNZ-T) with an “outperformer” rating and $80 target, exceeding the $77.90 average.
“Tenaz provides direct exposure to European gas pricing via its operations in the Dutch North Sea and is well positioned to grow production and free cash flow by developing its assets in the region. The company is the largest natural gas producer in the Netherlands, and has an ownership or operatorship interest in major gas gathering and processing infrastructure that can support significant organic growth within existing capacity. Our net asset value estimate of $100/sh demonstrates considerable upside to the current share price, which we believe will support a stronger valuation as Tenaz demonstrates its ability to grow production in the North Sea through successful infill and exploratory development,” he said.
* Barclays’ Benjamin Budish raised his target on TMX Group Ltd. (X-T) to $59 from $52, keeping an “equal weight” rating. The average is $61.02.