Inside the Market’s roundup of some of today’s key analyst actions
Citing “resiliency” in the demand for side-by-side vehicles and potential lower exposure to Section 232 U.S. tariffs, TD Cowen analyst Brian Morrison upgraded BRP Inc. (DOO-T) to a “buy” rating from “hold” previously.
“Channel checks indicate ongoing SxS momentum/share gains, and we believe new product introductions at BRP Club, inclusive of value/impact pricing, may be due to several new products updated to comply with HTS codes in turn reducing BRP’s S232 tariff exposure,” he explained. “The potential magnitude remains fluid and could result in upward financial revisions/higher applied multiple.”
Mr. Morrison’s revisions follows the Valcourt, Que.-based manufacturer’s annual Club BRP conference in Orlando, which featured several new product introductions that “intrigued” him.
“While the launches highlighted innovation across 3WV, ATV, SxS, and PWC categories as anticipated, it was management’s commentary on pricing that we found most noteworthy,” he explained. “Despite improvements in power, performance, and technology across the ORV/Powersports lineup, the recurring theme was value/impactful pricing. We found this notable given the pricing pressure associated with Section 232 tariffs.
“Recall, BRP initially disclosed an $500-million gross tariff exposure in F2027, which management subsequently indicated could be reduced to an $300-million-$350-million net impact through mitigation initiatives following the release of Q1/F27 results.”
When BRP releases its second-quarter fiscal 2027 results on Sept. 3, Mr. Morrison thinks the impact of tariffs could be less “onerous” than previously anticipated. He’s now forecasting 6-per-cent year-over-year revenue growth.
“The positive is strength in Year-Round (up 18 per cent year-over-year) as Defender momentum/share gains continue, and a final inventory alignment (approximately $100-million) of wholesale-to-retail,” he said. “Offsetting, we forecast Seasonal Product weakness (down 20 per cent year-over-year) due to a ‘soft’ PWC [personal watercraft] season and shift of PWC deliveries back to its normal Q1/F27, with limited Q2/F27 replenishment.
“This is the first full quarter of S232 tariffs. We estimate an $90-million net headwind that accounts for the reduced tariff rate on ATVs (15 per cent from 25 per cent) enacted June 8. We view this, along with SxS strength/increments as key contributors to our normalized EBITDA/EPS forecast of $119-million/a loss of $0.42, ahead of consensus of $94mm/a loss of $0.67 ... We estimate ATV tariff relief as a $40-million annual benefit ($20-million in F27). We believe updates within new product introductions may classify several vehicles more favorably under utility vehicle HTS classifications (HTS 8704) and potentially not subject to S232 tariffs. We estimate this could represent $200-million in relief, or $50-$100-million less than our forecast for F28. We expect more detail on updated exposure with the Q2/F27 release.”
Pointing to “attractive” free cash flow, Mr. Morrison raised his target for BRP shares to $106 from $92. The average target on the Street is $96.13.
“BRP remains an industry leader, supported by a strong management team and a track record of generating free cash flow through downturns while continuing to invest in innovation, new products, and cost efficiencies,” he concluded. “The normalization of industry inventory levels continues to support a more durable base of earnings. Tariffs remain the key overhang on the shares; however, ATV tariff relief and potential opportunities to further reduce exposure through HTS classification and other mitigation actions suggest earnings are becoming more resilient than initially feared.”
CIBC World Markets analyst Paul Holden is expecting “strong” third-quarter results from Canada’s banks driven by the same factors we have seen for a number of quarters – capital markets revenue, wealth revenue and positive operating leverage."
“Credit losses for the group should be fine (i.e., within guidance ranges) and macro indicators suggest PCLs should be improving in future quarters,” he added. “It is hard to say if bank stocks can continue to push higher; it is easier to say that FQ3 results should not be the reason for the stocks to trade lower.”
“We have revised our FQ3 EPS estimates higher based on higher capital markets and wealth management revenue. On average, our FQ3 EPS estimates increase 2 per cent, which puts our estimates above consensus by 2 per cent on average. The biggest variances are with TD (4.3 per cent above consensus) and NA (3.3 per cent vs. consensus). We have also made modest adjustments to our F2027E EPS with an average increase of 0.5 per cent.”
In a client report released Wednesday, Mr. Holden upgraded National Bank of Canada (NA-T) to “outperformer” from “neutral” with a $249 target, up from $221. The average is $211.
“We like NA into the quarter based on the outlook for strong capital markets results, including equity trading,” he explained. “More importantly, we like NA based on capital available and opportunities for organic capital deployment. We also see upcoming catalysts with AIRB transition for the CWB loan portfolio and completion of the Canadian P&C banking strategic review. NA is trading at a 4-per-cent premium to the group average P/E, which we think is appropriate. Upside is premised on positive EPS revisions vs. a relative multiple re-rate.”
Conversely, Mr. Holden lowered Bank of Montreal (BMO-T) to “neutral” from “outperformer” while raising his target to $272 from $244. The average is $236.25.
“Our Outperformer rating on BMO was mostly premised on execution against ROE expansion and consensus not giving credit for ROE expansion,” he said. “Consensus estimates have increased significantly for BMO and there is no longer material upside to achieving the 15-per-cent ROE target. BMO is still positioned well in terms of the acceleration in U.S. C&I lending, U.S. capital markets activity and being underweight the slow-growing Canadian retail banking market.”
The analyst made these other target revisions:
- Bank of Nova Scotia (BNS-T, “neutral”) to $136 from $122. Average: $116.50.
- EQB Inc. (EQB-T, “outperformer”) to $165 from $151. Average: $133.86.
- Royal Bank of Canada (RY-T, “neutral”) to $311 from $279. Average: $284.39.
- Toronto-Dominion Bank (TD-T, “neutral”) to $184 from $164. Average: $163.22.
Stifel analyst Daryl Young sees Air Canada’s (AC-T) sale of a 25-per-cent stake in its Aeroplan loyalty program for $2.5-billion to Blackstone Inc. and a group of Canadian pension funds an “exceptionally elegant transaction.”
“We were impressed by the Aeroplan monetization transaction as it demonstrates the significant value of the cash flow stream, without giving up control or upside from program growth, and locks in an attractive 6.5-per-cent cost of funds (fixed transaction IRR, with upfront distributions deducted from AC’s call option price in years five through eight),” he said. “Management emphasized the significant value of Aeroplan, with the transaction underwriting a 21 times EBITDA valuation (total implied value of $10-billion).
“In many ways, we think the arrangement resembles debt, but with the benefit of no fixed annual payments (capital is returned via discretionary dividends) and exclusion from leverage calculations by the rating agencies. Going forward, management expects to declare annual dividends split 25 per cent/75 per cent; we assume the $475-million of Aeroplan EBITDA is a proxy for pre-tax cash, implying $119-million of annual MI distributions. After factoring in the debt repayments and 8-10% share count reduction under the SIB, management expects the transaction to be ‘...EPS accretive pretty quickly.’ The SIB effectively accelerates AC’s share repurchase plans by two years, and restores the share count to 2019 levels (since 2024, AC will have repurchased 30 per cent of shares outstanding including this SIB). Also, pro-forma leverage falls to times1.2x ND/EBITDAR.”
In a client note released before the bell, Mr. Young updated his forecast for Air Canada to reflect the deal and concurrent plans for an $800-million substantial issuer bid (SIB) to repurchase 10 per cent of shares outstanding as well as the company’s second-quarter results, which he thinks results “demonstrate strength across the network.”
“Adjusted EBITDA of $719-million was 2 per cent above consensus on record revenue of $6.266-billion, up 11.3 per cent year-over-year,” said the analyst. “Strength was seen across effectively all regions, but premium and corporate travel were highlights, up 11 per cent and 19 per cent year-over-year respectively. Yields were strong at 7.2 per cent, and AC reported an industry-leading load factor of 87.5 per cent.”
Maintaining his “buy” rating for Air Canada shares, Mr. Young increased his target to $38 from $30. The average is $31.15.
“No question this is a highly attractive financing, but we view it more as hybrid debt than a true equity mark; the deal has a call feature in years 5 through 8 and carries a fixed 6.5-per-cent IRR to the investor group (i.e. no equity upside/ downside). Regarding the broader environment, demand remains very healthy, albeit an elevated fuel price forecast led to 2026 guidance 6 per cent below consensus. Regardless, we think the backdrop is sufficiently strong to support AC’s fleet growth ambitions, driving operating leverage and unit margin expansion through 2030,” he concluded.
Elsewhere, Scotia’s Konark Gupta raised his target to $37.50 from $33.50 with a “sector outperform” rating.
“While the loyalty program value has crystallized strongly, the ongoing fuel price volatility continues to weigh on our multiple for the airline business,” said Mr. Gupta.
Equity analysts on the Street continued to initiate coverage of Cadillac Mines Corp. (CADY-T), a Toronto-based exploration-stage company that completed an upsized initial public offering on the Toronto Stock Exchange on July 24.
Cadillac is focused on portfolio of assets along the Larder Lake-Cadillac Break in the southern Abitibi greenstone belt. Its flagship asset is the 100-per-cent owned Kerr-Addison Property in Ontario’s Kerr-Addison Camp.
In a report titled High Octane Optionality, National Bank’s Don DeMarco gave the company an “outperform” rating, seeing both “premium fuel for growth” and “a full tank of catalysts.”
“The Cadillac camp boasts an aggregate MRE [mineral resource estimate] of 8.3 million ounces of gold and 218 million pounds of nickel,” he said. “Ownership is consolidated after recent acquisitions and, in our view, the sum exceeds the value of the individual assets given the strategic flexibility from logistical advantages, infrastructure sharing, multiple development pathways, and exploration potential. Nickel exposure further enhances the investment case, in our view, providing leverage to a critical mineral that could attract additional investor interest and strategic attention. The result is a more coherent district-scale platform with greater development optionality and multiple opportunities to create value over time.”
‘CADY’s targeted game plan is to systematically advance its portfolio through phased development. The initial focus is on Geminid, targeting early cash flow through either a toll-milling arrangement or joint venture, to help fund the development of Larder, under a similarly capex-light toll-milling framework. Longer term, management envisions a development of a centralized gold processing hub on the Kerr-Addison property with owner-processing of material from the Kerr-Addison deposit and Larder deposits driving production on the order of 300k oz/yr gold."
For other Cadillac initiations of coverage see: Tuesday's analyst upgrades and downgrades
Also touting “room to accelerate,” Mr. DeMarco set a target of $10.50 per share. The average target is $12.
“CADY trades at a meaningful discount to comparable developers on an EV/oz basis despite controlling a district-scale resource base in a Tier 1 jurisdiction,” he said. “Following the recent oversubscribed financing, the company is well-funded with liquidity of approximately $320-million, providing the capital flexibility to advance exploration, engineering, permitting and technical studies over the next several years ahead of a phased development strategy. We believe continued resource growth, successful execution, and further de-risking of key assets could support a re-rating as the company advances toward development milestones.
Elsewhere, Ventum Financial’s Robin Kozar gave Cadillac a “buy” rating and $11 target in a report titled Why Ride a Bus When You Can Drive a Cadillac: Advancing a Multi-Asset Camp in the Abitibi.
“Cadillac owns a multi-asset portfolio with embedded optionality and strong resource growth potential. Add on existing infrastructure in a prolific camp, strong strategic backing and excellent exploration potential, and it is hard not to get excited. We see a capable and experienced management team surfacing value and driving shareholder returns,” said Mr. Kozar.
CIBC’s Luke Bertozzi gave the stock an “outperformer” rating and $13 target.
“We view Cadillac as an early stage but differentiated opportunity to build a multi-asset mining district in Ontario. Our conceptual development scenario sees production reaching 400koz AuEq by the mid-2030s, with Geminid and Larder helping fund the larger Kerr-Addison development and reducing external financing needs,” said Mr. Bertozzi.
RBC Dominion Securities analyst Pammi Bir thinks there was no real surprises in “a routine quarter, with steady operating metrics” from CT Real Estate Investment Trust (CRT.UN-T).
“Underpinned by its Canadian Tire Corp.-anchored portfolio, we expect organic NOI [net operating income] growth to print in the low-single-digits through 2027,” he said. “After an active quarter of capital deployment, the pace may moderate. Still, CRT’s ability to leverage its parental ties should supply a steady stream of investment opportunities. All said, we see its premium relative valuation as well-supported by superior cash flow durability and a decent outlook for earnings growth.”
On Aug. 10, the Toronto-based REIT reported funds from operations per unit of 35 cents for its second quarter, a gain of 3 per cent (or a penny) year-over-year and matching the estimates of both Mr. Bir and the Street. IFRS net asset value per unit increased 8 per cent year-over-year to $19.06 “partly aided by a $44-million portfolio fair value gain.”
“Same-store NOI rose a modest up 1.3 per cent year-over-year (up 1.2 per cent year-to-date), mainly from CTC’s 1.5 per cent annual rent escalations,” said Mr. Bir. “Including intensifications, same-property NOI increased up 2.5 per cent year-over-year (up 2.4 per cent year-to-date). Renewal leasing spreads were decent at up 10.4 per cent (up 9.3 per cent year-to-date), including up 10.9 per cent (up 10.8 per cent) on CTC leases. The portfolio is essentially full, with occupancy at 99.5 per cent (up 10 bps quarter-over-quarter, flat year-over-year). Supported by stable anticipated occupancy, capex recoveries, and annual rent escalations, we expect organic NOI growth to remain in the up 1.5-2 per cent range through 2027.”
“Forecasting decent growth. Our 2026/27 estimated FFOPU are intact at $1.42/ $1.46, with 2028E introduced at $1.53 (up 4 per cent year-over-year). Revisions were minor and mainly reflect acquisition and development related timing. Our 2025A-27E CAGR is 4 per cent, a bit ahead of its retail peers (3 per cent) and the sector (3 per cent). Our NAVPU is unchanged at $18, with our 1YR FWD NAVPU rising $0.50 to $19.”
Keeping a “sector perform” rating for the REIT’s units, Mr. Bir increased his target to $19 from $18.50, which is the average on the Street.
“From our perspective, its premium relative valuation is well-supported by its healthy growth profile, superior cash flow durability, below average leverage, and strong track record,” he said.
Ventum Financial analyst Rob Goff is maintaining his “bullish outlook” on NowVertical Group Inc. (NOW-X) following “solid” first-quarter results.
“We look for the co-founder and interim CEO, Andre Garber to drive forward organic growth and strengthen the platform,” he explained. “Inorganic growth is not expected over the near term. We support the prioritization of organic growth and establishing a consistent baseline of 8-10-per-cent-plus organic growth. We see NOW in a stronger position to consider higher-quality targets from a position of increasing strength, with further progress building out its data analytics and Google-related services.”
Shares of the Toronto-based AI-driven global data and analytics company soared 28.6 per cent on Tuesday after it reported revenue of $9.7-million for its second quarter, a gain of 18 per cent year-over-year and in-line with Mr. Goff’s $9.6-million as core services gaining momentum. Adjusted EBITDA was up 41 per cent to $1.5-million matching the analyst’s forecast.
“Management continues to evolve its revenue mix from lower-margin reselling activity toward higher-value Data Analytics, which grew 7 per cent quarter-over-quarter to $8.6-million, including $2.5-million of Google Cloud Platform revenue, up 10 per cent quarter-over-quarter,” said the analyst. “Encouragingly, revenue from the Top 30 Strategic Accounts grew 24 per cent year-over-year and now represent 85 per cent of total revenue (vs. 80.7 per cent in Q2/25 and 55 per cent in 2024).”
“With positive working capital of $2.3-million, NowVertical generated operating cash flow of $1-million in H1 (vs a drain of $4-million in H1/25), ending the quarter with $3.9-million of cash on hand and net debt/adj. EBITDA of 1.8 times on a TTM [trailing 12-month] basis. While we are not looking for acquisitions in the near term, we believe the Company would be well-positioned to access additional funding from BDC (Business Development Bank of Canada) to support future acquisitions.”
Reaffirming his “buy” rating, Mr. Goff lowered his target to 30 cents from 42 cents “as investors await confirmation of the CEO role and continued organic gains.” The average is 18 cents.
“We fully recognize that investor confidence will likely await a demonstration of execution across internal efficiencies, cross-selling, and, at some point, acquisitions,” he noted. “However, the current enterprise value of $22-million leaves aggressive upside with successful execution. Conversely, where execution trails the Board’s stewardship objectives or where the shares remain discounted, we would expect heightened takeover speculation as NOW continues to build its enterprise value as one operating team pursuing a larger share of wallet from large enterprise clients while empowered by partnerships with key technology leaders such as Microsoft.”
In other analyst actions:
* Believing Curaleaf Holdings Inc.’s (CURA-T) formal takeover bid “offers attractive upside” to shareholders, ATB Cormark’s Frederico Gomes moved Aurora Cannabis Inc. (ACB-T) to “tender” from “outperform” with a $5.60 target, down from $6.50.
“The implied US$4.00per share consideration offers shareholders an 45-per-cent premium (110 per cent excluding cash) to Aurora’s 30-day VWAP. Based on our estimates, this proposal values Aurora at an Enterprise Value of US$171.1 -million and an NTMe [next 12-month estimated] EV/EBITDA multiple of 6.6 times, which is a premium to the peer average of 5.6 times. While the initial offer of US$4.00 is lower than our previous $6.50 PT, the deal’s capped value of US$5.00 ($7.00, representing a price per Curaleaf share of up to $17.05) would be higher. Importantly, we believe Curaleaf’s fair value could surpass $17.05 post-closing, driven by the $40-million of identified synergies (which we believe are achievable and could be exceeded), and U.S. adult-use cannabis rescheduling, which we expect to materialize in the coming weeks or months,” said Mr. Gomes.
* After reducing his first-quarter 2027 earnings per share forecast by 7 per cent to reflect lower estimates for fuel margins, merchandise same-store sales growth and margins, Scotia’s John Zamparo cut his Alimentation Couche-Tard Inc. (ATD-T) target to $104 from $107, keeping a “sector outperform” rating. The average is $104.18.
“Despite the lower estimates, ATD remains our top pick, as oil volatility supports margins and we maintain conviction in ATD’s execution, particularly in high-margin categories (energy, nicotine, food). We also view the Zabka acquisition favourably,” said Mr. Zamparo.
* Desjardins Securities’ Allison Carson raised her target for Wesdome Gold Mines Ltd. (WDO-T) target to $40 from $34, which is the average on the Street, with a “buy” rating.
“Wesdome reported a 2Q26 earnings beat, driven by stronger-than-expected revenue of $267-million, which more than offset higher operating costs and supported the EBITDA outperformance,” she said. “While production guidance was largely maintained, Eagle River grade guidance was revised lower to 11.5–12.5 grams per ton from 13.0–14.0 g/t, reflecting the planned blending of Global Model ore. Management emphasized that the core high-grade zones remain intact and attributed the lower-grade profile to mine sequencing. The company also confirmed that work is underway to assess near-term development opportunities at Mishi. At Kiena, cash costs of US$1,076/oz exceeded our estimate of US$942/oz due to higher maintenance and contractor costs, and management expects costs to remain near the upper end of guidance for the remainder of the year. We revised our target price to C$40.00 (from C$34.00), reflecting minor model updates, the roll-forward of our model and modestly higher valuation multiples.”