Inside the Market’s roundup of some of today’s key analyst actions
Citi analyst Paul Lejuez thinks the near-term risk/reward proposition for Lululemon Athletica Inc. (LULU-Q) “looks slightly more favorable” following an 18-per-cent drop in its share price since the release of its quarterly results on Sept. 3, and he believes the Vancouver-based clothing retailer can beat its third-quarter guidance “which was guided very conservatively.”
However, he warns investors the outlook for the next fiscal year and beyond “remains very unclear.”
New Lululemon CEO faces compounding pressures as she takes over top job
“Our concern is that sales pressure may continue into F27, and the size of its store fleet may need to be addressed (following years of store expansions) to avoid significant cost deleverage on sales/sq ft declines,” said Mr. Lejuez.
In a client note reviewing last week’s quarterly release, which featured a reduction to the forecast for its financial performance in the year ahead for the second time in just three months, he lowered his full-year fiscal 2026 and 2027 earnings per share projections to US$10.49 and US$8.89, respectively, from US$11.12 and US$9.99.
“Our F26/F27 sales estimates were lowered from down 0.6 per cent/up 3.5 per cent to down 4.4 per cent/up 0.7 per cent with F26/F27 comps moving from down 5.7 per cent/down 0.5 per cent to down 10.0 per cent/down 3.6 per cent and F26/F27 EBIT margin estimates moving from 15.8 per cent/12.5 per cent to 15.3 per cent/11.7 per cent,” he added.
“Despite our lower estimates, we believe 3Q guidance was cut sufficiently (very conservatively in fact). Our 3Q26 EPS est is $1.51 vs guidance of $0.93-0.98 and consensus of $0.98.”
With those changes, Mr. Lejuez reduced his target for Lululemon shares to US$117 from US$130, keeping a “neutral” rating. The average target is US$103.37.
“After years of benefitting from outsized growth in active apparel, trends in the category have slowed,” he said. “This dynamic, coupled with LULU’s execution issues (lacklustre product assortment/lack of color/sizing) leave LULU more susceptible to increased competition and promotional pressures. Mgmt plans to add more newness to help improve the Americas biz (which they believe will drive more full price sales), and there have been some early successes. But the macro backdrop will make a turnaround more challenging. We believe the risk/reward is balanced.”
Elsewhere, citing demand concerns, BMO’s Kelly Crago initiated coverage of Lululemon with an “underperform” rating and a US$70 target.
“After a decade-long run as one of the biggest winners in athletic, LULU now faces a business in free fall, with demand cracking across both the Americas/China and a premium margin structure that is completely unwinding,” said Ms. Crago.
“Incoming CEO Heidi O’Neill inherits a business in need of a full reset, and as a result, we model FY27 EPS of $6.35, well below consensus $8.42, highlighting how much earnings power is at risk, a point not fully appreciated by the market.”
Desjardins Securities analyst Robert Mann reaffirmed Tamarack Valley Energy Ltd. (TVE-T) as his “preferred smid-cap producer” and one his “top ideas” in the Canadian energy sector following the announcement of its $10-billion all-stock merger with Headwater Exploration Inc. (HWX-T)
Shares of Calgary-based Tamarack rose 3.3 per cent on Tuesday following the premarket announcement of the deal, which creates an oil-producing heavyweight in the Clearwater region of northern Alberta.
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Under the proposed deal, Headwater shareholders will receive one share of Tamarack for each Headwater common share they hold. Tamarack shareholders will own 66.5 per cent of the combined company, while Headwater shareholders will own 33.5 per cent.
“In our view, the transaction creates a differentiated large-cap Clearwater producer that combines meaningful scale, a net cash balance sheet, a targeted 10–12-per-cent annual growth profile, a 15-per-cent pro forma corporate decline rate— trending toward management’s long-term 12-per-cent target—and enhanced capital return potential,” said Mr. Mann.
“Together with a 20-per-cent increase in the annualized base dividend to $0.24/share (1.7-per-cent yield), we believe the combined company offers one of the more compelling growth-and-return profiles in the North American E&P sector. We would also note that the transaction consolidates a significant portion of the Clearwater fairway under a single operator, potentially increasing the strategic relevance of the asset base to larger industry participants over time.”
On a total shareholder return basis, Mr. Mann thinks Tamarack “stands out” and possesses “meaningful free cash flow generation capable of supporting ongoing share repurchases.”
“Under futures pricing, we estimate the company will generate $535-million of free cash flow (post dividends of $168-million) in 2027,” he explained. “If 75 per cent ($400-million) of this excess cash flow is allocated to share repurchases, consistent with our base-case assumptions, Tamarack could retire roughly 3–4 per cent of its pro forma share count annually.
“Given management’s demonstrated preference for buybacks and willingness to modestly leverage the balance sheet, we view this assumption as reasonable. Importantly, the company’s net cash balance sheet and low US$37/bbl WTI breakeven suggest it has the capacity to increase repurchases meaningfully beyond this level in a supportive commodity price environment. As an illustration, under futures pricing and assuming management is willing to utilize balance sheet capacity up to a 0.5 times leverage ceiling, our analysis indicates Tamarack could retire up to 10 per cent of its pro forma share count next year while still maintaining leverage below that threshold. All told, outside of strategic capital allocation decisions, we view annual shareholder returns in the 15–18-per-cent range as achievable under our base-case assumptions, with additional upside from capital returns should management elect to utilize more of the balance sheet capacity available to it.”
With increases to his production and cash flow expectations for Tamarack through fiscal 2027, the analyst raised his target for its shares to $16.50 from $16, keeping a “buy” rating. The average is $17.
“Pro forma under futures pricing, Tamarack trades at approximately 6.5 times 2027 estimated EV/DACF [enterprise value to debt-adjusted cash flow] and offers an 8-per-cent free cash flow yield (enterprise value basis),” he noted. “Prior to the transaction, we estimated Headwater traded at 7.5 times 2027E EV/DACF and a 7-per-cent free cash flow yield, valuation levels that we believe are reasonable for the pro forma company over time.”
Elsewhere, other analysts making target revisions include:
* Raymond James’ Luke Davis to $17 from $16 with an “outperform” rating.
“We view the combination as strategically compelling given the highly complementary asset base, FCF-per-share accretion and more than $50-million of annual run-rate synergies,” said Mr. Davis.
* Canaccord Genuity’s Mike Mueller to $16 from $15 with a “buy” rating.
“Given that the pro forma entity will remain a pure-play Clearwater producer while benefitting from increased size and scale, we view the combination as a positive, with immediate benefits expected to be realized next year,” said Mr. Mueller.
National Bank Financial analyst Patrick Kenny sees Enbridge Inc.’s (ENB-T) internal transition as “a well-planned leadership succession, supporting strategic continuity for shareholders.”
On Tuesday, the Calgary-based energy transporter announced Greg Ebel is retiring as chief executive officer at the end of 2026 after four years in the position. He will be replaced by Michele Harradence, who is currently the company’s executive vice-president and president of gas distribution and storage.
“Ms. Harradence’s appointment follows a multi-year succession planning process led by the Board and reflects her extensive leadership experience across Enbridge’s Gas Distribution and Gas Transmission & Midstream businesses, as well as previous ‘Liquids’ roles within the oil sands and refining sectors in Canada,“ said Mr. Kenny. ”Ms. Harradence has led Enbridge’s Gas Distribution & Storage business since 2022, including overseeing the integration of the company’s recent acquisition of three U.S. natural gas utilities from Dominion Energy, helping establish one of North America’s largest integrated gas utility platforms serving 7.2 million customers. Prior to joining Enbridge in 2014, she worked for Shell for 16 years in roles of increasing responsibility, including General Manager of Shell’s Sarnia Manufacturing Centre in Ontario."
In a client note released late Tuesday, Mr. Kenny emphasized “Enbridge’s $41-billion secured growth backlog, along with its $50-billion unsecured portfolio of growth opportunities, is approximately two-thirds weighted towards expanding the company’s Gas Transmission & Utilities platforms, while strengthening the company’s Liquids Pipelines moat, and enhancing its Renewables footprint.”
“Based on Ms. Harradence’s operational, regulatory and customer service experience, we expect her appointment to support continued execution of Enbridge’s growth strategy, particularly across its U.S. Gas Transmission & Utilities businesses,” he added.
Mr. Kenny reaffirmed an “outperform” rating and $81 target for the company’s shares. The average is $79.81.
Elsewhere, CIBC’s Robert Catellier kept his “outperformer” rating and $78 target.
“We view the timing of CEO Greg Ebel’s retirement as somewhat earlier than investors may have anticipated, although Michele Harradence’s appointment reflects a well-planned transition. Given her extensive Enbridge experience and the company’s established strategy, we expect a high degree of continuity and see no change to our investment thesis,” said Mr. Catellier.
Despite strong relative performance for its shares thus far in 2026 and another operational setback at its Alberta EnviroFuels (AEF) facility in Edmonton earlier this year, TD Cowen analyst Aaron MacNeil says Keyera Corp. (KEY-T) remains his “Best Idea in Canadian Midstream” given its “fee-based growth outlook and broader leverage to positive industry themes.”
“This thesis is underpinned by sanctioned projects and contracted volume growth on underutilized capacity that result in a growth rate that is industry leading,” he explained.
“Keyera stands to benefit from rising throughput across its integrated G&P and liquids value chain, including gas processing, NGL pipeline, fractionation, storage, and diluent logistics. As more liquids are extracted and moved through KAPS and Norlite and its Fort Saskatchewan complex, the system will require further debottlenecking and optimization, extending its industry-leading growth rate.”
In a client report released before the bell, Mr. MacNeil emphasized Keyera now possesses the “exposure to the right themes” in the current macroeconomic environment alongside an “industry-leading growth rate.”
“Keyera exemplifies our thesis of owning indirect midstream beneficiaries of basin growth,” he added. “Notably, it has minimal exposure to higher-risk greenfield projects and other themes that have weighed on select peers including data center concerns, recontacting risk, and interest rate risk.”
“Our base case assumes a 10.5-per-cent fee-based EBITDA per share CAGR for 2025-2029 and conservatively assumes the sale of the PFS asset. This is the highest growth rate in our coverage universe, which we believe remains underappreciated despite relative outperformance.”
The analyst has a “buy” rating and $67 target for Keyera shares. The average is $74.85.
“Keyera’s integrated platform is positioned to deliver sector-leading growth, with an 12.0– 12.5-per-cent fee-based EBITDA/share CAGR to 2029E (17 per cent to 2027, 7–8 per cent thereafter), supported by Plains integration, synergies, fractionation expansions, higher utilization and the acquisition of the remaining 50-per-cent interest in KAPS, with management reiterating further upside from optimization and capital-efficient projects not yet reflected in guidance,” he said. “Growth remains underpinned by strong condensate and liquids-rich basin fundamentals, where Keyera benefits from broad exposure across gas processing, KAPS, fractionation, storage, and diluent logistics.”
Stifel analyst Ralph Profiti sees the potential for “accelerated low-capital intensity development” at Ivanhoe Mines Ltd.’s (IVN-T) giant Makoko copper discovery in Democratic Republic of Congo after the company increased the resource by 30 per cent.
“Makoko District has higher copper grades in sub-zones that mirror mineralization style at Kamoa, which currently feeds the adjacent Kamoa-Kakula Copper Complex’s Phase 3 concentrator and can feed a Phase 4 concentrator expansion,” he added in a client note. “As a result, we see Makoko development plans favouring a low capital intensity combination of multiple shallow open pits with underground mining producing copper within 5yrs at 90-100Kt of copper at 5Mtpa (as a minimum; and could be 2x larger vs. our preliminary estimate), leveraging local and regional power networks, including hydropower generation and transmission (replicating modular solar-battery power solutions at the Western Forelands) and access to the Lobito Railway Corridor.
“A Makoko scoping study will commence in Q1/27 with conceptual mine planning already underway targeting completion by end-2027. Mineralization sub-crops along the western edge and dips at 11-18 degrees over approximately 6km to a maximum depth of 1,250m, allowing an open pit to follow the seam down-dip into an underground portal. Ivanhoe expects concurrent open pit and underground mining to lower capital intensity and shorten pre-production development. Site preparation has already started, including perimeter fencing, earthworks for project facilities and road construction, and an updated ESIA has commenced.”
Mr. Profiti maintained his “buy” rating for Ivanhoe shares and raised his target to $17 from $15. The average is $14.34.
“We believe Ivanhoe’s cash flow transition from more capex-intensive build-out and expansion to significant production growth with high-margin value capture has been deferred due to the temporary suspension at Kakula underground,” he added. “Long-term objectives and deliverables are still preserved and represent a compelling risk-reward trade-off on medium-term value, and we still consider Kamoa-Kakula as having multi-stage expansion and optimization potential. Ivanhoe’s asset base is distinguished by its high-grade, long-life deposits and substantial infrastructure already in place. Platreef is an ultra-scale, high-margin polymetallic orebody standing out with a combination of grade, thickness, geometry, scale and potential for significant byproduct credits as Phase 1 ramp up in H1/26 and Kipushi that reintroduces a highest-grade zinc supply. Together with an underappreciated brownfield and greenfield exploration portfolio (Western Forelands), Ivanhoe’s assets offer a visible multi-year growth pipeline with scale.”
Elsewhere, other changes include: * Canaccord Genuity’s Dalton Baretto to $15 from $13 with a “buy” rating.
“Our take: Very positive,” said Mr. Baretto. “We note the 30-per-cent increase in contained copper, achieved while simultaneously increasing resource grades. Makoko is clearly world-class in scale and grade, and will eventually benefit significantly from the infrastructure and know-how next door. With significant drilling ongoing post the March 31 cut-off date, we expect next year’s update to be even more meaningful - management indicated that they expect a further 30-per-cent increase in metal content, along with 30-40 per cent of the Inferred resource upgraded to the Indicated category and the open-pit portion more clearly defined (the current resource is based on MSOs that assume underground mining). Environmental baseline studies are already underway, and management intends to be shovel-ready by the end of 2028, with a scoping study kicking off in early 2027. Of note, management expects the capital intensity of Makoko to be just ~$10,000/t, about a third of other greenfield projects of similar scale.”
* Scotia’s Orest Wowkodaw to $13.50 from $13 with a “sector perform” rating.
“We rate IVN shares Sector Perform due to significant operating uncertainty at Kamoa-Kakula; this is likely to serve as a material overhang on the shares until the release of an updated LOM [life-of-mine] plan in late Q1/27,” said Mr. Wowkodaw.
In other analyst actions:
* With an increase to the firm’s lithium price assumptions leading to higher long-term earnings projections and a jump in its net asset value, JPMorgan’s Rock Hoffman upgraded Lithium Americas Corp. (LAC-N, LAC-T) to “overweight” from “neutral” with a US$6 target, exceeding the US$4.50 average.