Inside the Market’s roundup of some of today’s key analyst actions
National Bank Financial analyst Cameron Doerksen sees both Canadian National Railway Co. (CNR-T) and Canadian Pacific Kansas City Ltd. (CP-T) poised to benefit from “solid” volume growth thus far in the third quarter with new cross-border tariffs representing “a small incremental headwind,” while U.S. trade policy “helping other volumes.”
“The collapse of trade talks between Canada and the U.S. and the subsequent new U.S. tariffs/restrictions and Canadian counter-tariffs on a range of goods is an incremental headwind for cross-border volumes (autos, metals, forest products among the categories impacted),” he explained. “However, the direct impact on both rails is likely to be limited as existing tariffs were already impacting certain cross-border volumes and bulk commodities are largely unaffected. Nevertheless, ongoing trade uncertainty is an impediment to business investment and economic growth, especially in Canada. For CN, 29 per cent of its revenue is tied to transborder Canada-U.S. flows while CPKC’s U.S.-Canada exposure sits at 21 per cebt of total revenue.
“We also highlight that tariffs have in some cases altered trade flows, which act as a revenue offset for the rails. For instance, tariffs on autos has resulted in more imports into Canada from countries other than the U.S., which for the rails can mean a longer length of haul driving more revenue (CN a notable beneficiary given its strong international auto import franchise).”
Thus far in the quarter, CN has seen revenue ton miles (RTMs) rise 4.6 per cent year-over-year, according to Mr. Doerksen, with CPKC seeing a 6.4-per-cent increase.
“Grain [is] continuing to be a key driver (although ... a smaller Canadian harvest this crop-year will be a volume headwind over the next 12 months),” he added.
“With overall volumes largely in line with our expectations, we have made mostly minor adjustments to our full-year forecasts for CN and CPKC (fuel surcharge lag will be a modest headwind to EPS in Q3 relative to prior expectations).”
In a client note, Mr. Doerksen said continue to have a “slight preference” for CPKC over CN from an investing perspective.
“We expect Q3 results for both CN and CPKC to be largely in line with current Street expectations, and we expect both railroads to reiterate full-year guidance,” he explained. “We have a positive growth outlook for CN and the stock’s valuation is relatively more attractive within the railroad peer group, but we continue to have a slight preference for CPKC in the Canadian rail space as we see superior volume and earnings growth over our forecast time horizon (we forecast 10-per-cent EPS growth in 2026 and 14.6 per cent in 2027). We are also still more confident in a positive trade outcome between the U.S. and Mexico (less confident in Canada-U.S. trade flows) that could act as a catalyst for the stock.
“On our updated forecast, CN shares trade at 21.0 times 2026 P/E and 19.5 times 2027 while CPKC trades at 24.4 times 2026 and 21.3 times 2027 versus the U.S. peer group at 22.8 times 2026 and 20.6 times 2027 on average.”
Maintaining his “sector perform” rating for CN shares, Mr. Doerksen reduced his target to $190 from $192. The average target on the Street is $187.81.
“We remain broadly positive on the outlook for CN with noteworthy long-term growth drivers including NGL exports from Prince Rupert, other energy-related growth in Western Canada, especially if multiple major proposed investments move forward, and the potential for increased international imports and exports if Canada diversifies its trade relationships,” he said. “Through its recent agreements with Union Pacific, CN has also largely mitigated the potential negative competitive impact from the proposed UNP-NS merger while also improving its access to Mexico. We nevertheless remain wary of U.S.-Canada trade-related risks as well as certain volumes to which CN is exposed that are sensitive to inflation and higher interest rates such as housing (forest products) and other consumer demand. Our earnings growth expectations for CN are also modest (5.1 per cent in 2026 and 7.6 per cent in 2027).”
He kept an “outperform” rating and $140 target for CP shares, which exceeds the $138.11 average.
“We maintain our Outperform rating on CPKC shares as we see superior volume and earnings growth over our forecast time horizon supported by new business wins and further growth on volumes to and from Mexico (we forecast 10-per-cent EPS growth in 2026 and 14.6 per cent in 2027),” said Mr. Doerksen. “We also see CPKC well positioned to benefit from truck-to-rail conversions on both its intermodal and merchandise books of business. Finally, we are also still more confident in a positive trade outcome between the U.S. and Mexico (less confident in Canada-U.S. trade flows) that could act as a catalyst for the stock.”
RBC Dominion Securities analyst Michael Harvey thinks Spartan Delta Corp. (SDE-T) should “sustain (and could potentially expand) its premium multiple given a premium land position within the West Shale Duvernay alongside a seasoned and aligned team.”
“Substantial remaining inventory sets the stage for above-average organic growth and a high likelihood of future M&A, in our opinion,” he added.
In a client report released Wednesday titled Path to Scale, Mr. Harvey initiated coverage of the Calgary-based oil and gas exploration and production company with an “outperform” rating, seeing it in “safe hands” with its “seasoned” management team.
“The Spartan team has a proven track record of value creation in the E&P space — consistently early movers in core plays with a history of well-timed entries and exits,” he explained. “Management and directors own 12 per cent of basic shares outstanding, which we believe creates strong alignment with other shareholders. To illustrate its historical long-term value creation, an initial investment in the original Spartan Oil in 2010 and rolled through all subsequent Spartans would have translated to an approximate 50 times pre-tax return.
Mr. Harvey thinks Spartan Delta’s position in the West Shale Basin Duvernay is “the clear engine of long-term growth” after delivering second-quarter production of 15,000 barrels of oil equivalent per day.
“Management is targeting Duvernay volumes of ~50,000 boe/d over five years — a trajectory we view as credible given substantial running room ahead,” he said. “The play remains materially underbooked, with just 14 per cent of identified locations reflected in 2P reserves, which we believe positions the stock as a compelling NAV re-rating opportunity.”
“Deep Basin — Future Optionality. SDE’s Deep Basin anchors the portfolio with a stable 36,000 boe/d base. A focus on liquids-rich formations — Cardium, Rock Creek, and Viking — drives a 30-per-cent liquids cut above the Deep Basin peer average, supporting stronger corporate netbacks. The asset carries meaningful optionality on an AECO recovery, backed by 45,000 boe/d of owned infrastructure capacity plus third-party access. Like the Duvernay, the region is conservatively booked: only ~200 of 900+ identified locations are currently reflected in NAV, leaving substantial room for future reserve additions.”
Believing its premium valuation is “warranted,” Mr. Harvey set a target of $17 per share. The average target is $15.75.
“SDE trades at a NAV premium to the broader SMID-cap peer group, though we expect this gap to narrow as accelerated reserve bookings across the Duvernay drive above-average NAV growth ahead,” he said. “Our target NAV multiple of 2.1 times (currently 1.5 times) and 2027 estimated DACF [debt-adjusted cash flow] multiple of 7.7 times (currently 6.0 times) sit above peer averages of 1.3 times and 6.1 times, respectively — a premium we view as justified given management quality and asset strength. Longer term, we see SDE as a potential acquisition candidate, given a highly focused asset base that has a considerable remaining runway.”
In a separate report, Mr. Harvey initiated coverage of Coelacanth Energy Inc. (CEI-X) with a “sector perform” rating, calling it “a compelling long-term acquisition candidate” led by “a seasoned management team with a long track record of value creation
He called Calgary-based Montney-focused oil and natural gas exploration and development company “unique” with “plenty of run room.”
“Coelacanth’s portfolio encompasses current production of 8,000 boe/d with a clear growth runway anchored within its core property in Two Rivers; located in NEBC,” he said. “The core property totals 150 sections of lightly explored Montney lands, with a liquids-rich production profile. Liquids are largely light oil with minimal condensate or NGLs. Amid growth rates of 20 per cent annually the name of the game is de-risking the land base over the coming years to get a better understanding of geology and long term value.”
The analyst emphasized the “development timeline for its Two Rivers property remains in flux amid low gas prices - limiting near-term catalysts - and we look forward to a more attractive entry point.”
“We expect CEI’s 2027 production mix to be approximately 72-per-cent gas-weighted on volumes of roughly 8,700 boe/d, supported by a capital program that is largely self-funding within cash flow,” said Mr. Harvey. “While we have confidence in the underlying asset quality, we remain cautious on the outlook for a sustained Western Canadian natural gas recovery given limited incremental egress capacity through the end of the decade combined with ample supplies.
“Strategic value is clear — timing is the question. CEI trades at a premium to 2P NAV on the expectation for reserve additions, but at a discount on EV/DACF (2027E), reflecting a soft near-term AECO backdrop. Our 1.5-times target NAV multiple exceeds the peer average of 1.3 times given largely unbooked reserves, while our implied 2027E DACF multiple of 2.8 times (2.9 times strip) trails peers at 6.1 times (6.1 times strip) due to CEI’s higher gas-weighting. NAV multiple expansion is likely if exploration results impress or the natural gas macro becomes more constructive. Volatility is expected given CEI’s smaller market cap, but quality management and exploration results compensate for this risk in our opinion.”
He set a target of 80 per share. The average on the Street is $1.10.
Desjardins Securities analyst Benoit Poirier thinks Volatus Aerospace Inc.’s (FLT-T) “Canadian manufacturing footprint, regulatory credentials and proprietary technology portfolio uniquely position it to benefit from the rising commercial and defence drone adoption.”
In a report released before the bell titled Rise of Canadian drone consolidator with broad proprietary portfolio, he initiated coverage of the Vaughan, Ont.-based integrated drone technology and services company with a “buy” rating, seeing it “better positioned than ever to convert its growing opportunity pipeline.”
“Five key reasons why we like FLT: (1) the rising defence investment and commercial drone adoption provide multiple growth paths; (2) its Canadian control and regulatory credentials are competitive advantages; (3) its broader proprietary portfolio and newly opened Mirabel facility position it to convert its expanding pipeline; (4) we estimate that adjusted EBITDA will break even in 2028; and (5) stronger pipeline conversion and M&A could provide meaningful upside,” he said.
“Since our March 2026 thematic note, FLT has completed a $34.5-million bought deal offering, opened its new facility, introduced V-Cortex and SKYDRA, advanced Canary’s regulatory pathway and secured partnerships with Singular Aircraft and Kraus Hamdani. More recently, it qualified across all five streams of Canada’s Defence Drone Initiative Marketplace and has secured an initial contract. FLT is now well-positioned to convert a growing opportunity set spanning Canadian and allied defence awards, persistent intelligence, wildfire response, and cargo and logistics.”
Mr. Poirier sees several potential catalysts for Volatus over the next 24 months, including “contract wins, M&A, proprietary platform commercialization and Mirabel ramp-up.”
“In the near term, opportunities include potential Canadian and allied defence awards, progress under the DDI, and the commercialization of SKYDRA, Canary, Condor XL, the V-Series and docking systems,” he added. “Longer-term catalysts include increased Mirabel utilization, additional sovereign defence programs and adjusted EBITDA breakeven in 2028.”
“We see several ways for investors to play FLT. Beyond our DCF value of $0.98/share, our 2028 revenue scenario analysis yields values of $0.37–1.54/share. Upside could come from stronger pipeline conversion and M&A.”
The analyst set a 12-month target of 90 cents per share, which is 7 cents under the current average.
“We believe FLT is well-positioned to benefit from growing commercial and defence drone adoption with several potential catalysts on the horizon, from near-term defence awards to longer-term continued proprietary platform commercialization. Our recent tour of the newly opened Mirabel facility gave us further confidence in our investment thesis,” he concluded.
In other analyst actions:
* CIBC’s Cosmos Chiu downgraded Endeavour Silver Corp. (EDR-T) to “neutral” from “outperformer” with a $20 target, down from $25 previously. The average target is $22.20.
“Endeavour Silver reported that a mechanical issue affecting the primary ball mill at its Guanacevi mine has been identified, requiring the replacement of the mill head and trunnion, he said. ”This is the second trunnion replacement needed at Guanacevi in less than two years; however, with both parts available on site this time, management expects the repair timeline to be significantly shorter at 3 weeks, compared with the 15 weeks of downtime in H2/24. This is the second interruption to operations in Q3/26, with the first being an illegal blockade at Terronera that disrupted operations and impacted production over a 12-day period in late August.
“Individually, these events are unlikely to have a material impact on production; however, collectively, we believe they could affect the company’s ability to meet full-year guidance. We have taken this opportunity to update our model and now expect full-year production of 8.28Moz of silver and 44.7koz of gold, compared with guidance of 8.3-8.9Moz of silver and 46-48koz of gold. Cost guidance for the year is also at risk of revision, with H1/26 all-in sustaining costs (AISC) reported at $36.96/oz, compared with full-year guidance of $27-$28/oz at the corporate level.”
* In response to Elemental Royalty Corp.’s (ELE-T) US$290-million definitive agreements with funds managed by Orion to acquire a portfolio of precious metals assets consisting of five streams and royalties as well as the sale of its Generation Business to Carlin East, Raymond James’ Brian MacArthur raised his target for its shares to $36 from $33 with an “outperform” rating. The average is $22.40.
“We believe royalty companies like ELE offer equity investors exposure to precious metals prices while mitigating downside risk given limited exposure to operating and capital costs. ELE’s portfolio consists of over 200 royalties that is precious metals focused with a favourable jurisdictional risk profile. ELE’s portfolio offers near term growth and many of ELE’s main assets have a current reserve/resource life of 10 years or longer. ELE also has longer-term potential growth from royalties/streams on numerous development assets,” he said.
* Stifel’s Cole McGill increased his target for shares of Meridian Mining PLC (MNO-T) to $4, exceeding the $3.12 average, from $3.25. with a “buy” rating, while Raymond James’ Craig Stanley bumped his target to $3 from $2.75 with an “outperform” rating.
“Cabaçal’s DFS [definitive feasibility study] presents a strong case for a company making asset: profitability ratio of 6.7:1, with first five year FCF generation of $2.6-billion almost 5 times current MNO EV [enterprise value],” said Mr. McGill. “Where MNO is prioritizing high grade up front (first five-year avg AuEq [gold equivalent] production of 183kozpa, 25-per-cebt higher than previous), we note this rock to cash conversion will leave the company with ample firepower to execute organically on belt scale optionality (every year of mine life at equivalent grade to yrs 1-5 is accretive by C$0.84/sh, or 15 per cent). We think MNO’s valuation (0.40 times P/NAV, 24-per-cent discount to peers) does not reflect the increasingly derisked asset, nor the current positive optionality for funding. Globally - we think sources of sulphur, with clean, precious metal rich concentrates tilt opportunity in favour of those that can develop them - driving cost of capital lower, lending project finance/offtake opportunities that are currently mispriced in MNO stock.”
* Following a tour of its Shacakichiuwaanaan property in Quebec, Raymond James’ Brian MacArthur moved his target for Pmet Resources Inc. (PMET-T) to $13 from $12 with an “outperform” rating. The average is $9.59.
“PMET is a hard-rock lithium exploration company focused on advancing its district-scale, 100%-owned,Shaakichiuwaanaan property located in Quebec (an emerging lithium/battery hub) near infrastructure. Theproperty hosts numerous pegmatities and PMET has announced a FS forthe CV5 spodumene pegmatite which indicated a potential production rate of ~800 ktpa spodumene concentrate which would potentially position PMET as the fourth-largest spodumene concentrate producer globally.While still a developer, given the combination of Shaakichiuwaanaan’s size and grade, location near infrastructure, exploration upside, favourable jurisdictional risk, and PMET’s flexible balance sheet, we believe PMET offers investors good exposure to lithium/tantalum and caesium,” he said.