Inside the Market’s roundup of some of today’s key analyst actions
RBC Dominion Securities analyst James McGarragle lowered valuations across his Airlines & Aerospace coverage universe ahead of first-quarter earnings season to reflect heightened macroeconomic headwinds and continued tariff uncertainty.
“Our Canadian Airlines Heatmap powered by RBC Elements points to weaker leading indicators, including airfares, web traffic, and capacity,” he said. “We flag a series of data points indicating transborder bookings/demand is down 10 per cent to 70 per cent and believe impairment is somewhere closer to 10 per cent, in line with commentary from AC (Air Canada). According to data we track, AC reduced capacity 0.5 per cent in Q1 vs consensus of up 1.6 per cent, which we see as related to dampening demand and therefore see risk to the company’s capacity guide of 3-5-per-cent ASM [available seat mile] growth this year.
“We take down our Q1 and 2025 estimates for AC given our view that tariff uncertainty and weaker transborder demand will negatively impact yields, load factors and capacity growth. Furthermore, our Business Jet Heatmap indicates a supportive demand backdrop with higher activity levels and low used inventories. However, we temper our Q1 delivery assumption for Bombardier, but remain in line with the company’s low 20′s delivery guidance and believe the company has successfully weathered the tariff storm so far.”
Alongside his estimate adjustments, Mr. McGarragle cut his targets for the five companies in the space that he covers. His changes are:
* Air Canada (AC-T, “sector perform”) to $16 from $20. The average on the Street is $22.87, according to LSEG data.
“We decrease Q1/25 estimated EBITDA to $312-million (from $365-million) reflecting weaker capacity growth,” he sai. “Our 2025 estimates moves to $3,235-million (from $3,320-million), below the low end of guidance of $3.4-billion and consensus of $3.4-billlion, given our view that tariff uncertainty and weaker transborder demand will negatively impact yields, load factors and capacity growth this year, though we see fuel prices providing an offset.”
* Bombardier Inc. (BBD.B-T, “outperform”) to $101 from $116. Average: $114.
“Our Q1/25E EBITDA is moves to $263-million, in line with consensus of $265-million as we lower our expected deliveries to 23 (from 26) in line with management’s guidance,” he said. “Our 2025E EBITDA remains unchanged at $1,625-million and FCF moves down to $800-million (from $900-million), on expected supply chain investments given changing tariff policy. Our target multiple moves to 6 times (from 6.5 times) resulting in our $101 PT. We continue to flag Bombardier as our top idea reflecting a low-teen FCF yield on our 2025 estimate and the opportunity to compound that FCF at a DD CAGR [double-digit compound annual growth rate] out to 2030, which we see as underappreciated at current levels.”
* CAE Inc. (CAE-T, “outperform”) to $41 from $43. Average: $41.
* Chorus Aviation Inc. (CHR-T, “outperform”) to $25 from $28. Average: $26.82.
* Exchange Income Corp. (EIF-T, “outperform”) to $64 from $71. Average: $69.27.
On valuations, Mr. McGarragle said: “Canadian Airlines & Aerospace share prices underperformed the index during the quarter as tariff and economic uncertainty roiled markets. CAE held up best as the company has limited exposure to tariffs followed by CHR and EIF, both of which have higher levels of contracted services revenue. Finally, both BBD and AC performed worst, as Bombardier is very susceptible to tariffs given final completion of its aircraft occurs in Canada, and the U.S. accounts for 63 per cent of the company’s revenues. AC shares were hit hardest as negative sentiment toward U.S. travel as well as weakness in the Canadian dollar negatively impacted travel outside of Canada, especially transborder traffic into the U.S..
“Valuations at lows ... All names are trading at the low-end of historical valuation given the recent market sell off. AC is trading at the low-end of its historical average as the industry grapples with weaker transborder demand, yield pressure, higher costs, and capacity risk. Bombardier is trading at a meaningful discount to peers even as it was hard hit by tariff uncertainty which has calmed (for now) and remains our top idea on the back of a meaningful FCF inflection in 2025. CHR is trading at the low-end post sale of RAL, however we see the company as less exposed to tariffs and in a solid position to keep buying back shares. CAE is trading at the low-end of its historical range despite posting solid quarterly results. Finally, EIF is trading in line with its historical average as a testament to its diversified operating model.”
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National Bank Financial analysts Shane Nagle and Rabi Nizami think copper price tailwinds are likely to support the first-quarter financial results for producers “ahead of recent volatility.”
“Q1/25 copper prices averaged US$4.24/lb broadly in-line with Q4/24; however, prices ended the year at US$3.92/lb leading to positive provisional pricing tailwinds during the quarter,” they said. “Recent escalation of the Global trade war has led to near-term demand uncertainty, and we continue to anticipate further headwinds as we enter the seasonally slow summer period.”
Citing “increased uncertainty from the impact of tariffs on the global economy/copper consumption,” the analysts lowered their valuation multiples for stocks in their coverage universe on Wednesday, remaining “cautious on the near-term supply/demand outlook for 2025 with expected deferral of growth projects to offer fundamental long-term support.”
With that view, Mr. Nagle made six target price adjustments to TSX-listed stocks. They are:
* Capstone Copper Corp. (CS-T, “outperform”) to $8.50 from $10. The average on the Street is $11.75.
Analyst: “While our Q1/25 estimates are broadly in-line with Consensus, the primary focus will be on the Company’s pending FCF inflection, which the market has discounted amidst copper price uncertainty. A deferral in some higher cost growth initiatives (Santo Domingo) could offer some support to the valuation.”
* Ero Copper Corp. (ERO-T, “sector perform”) to $21.50 from $23.50. Average: $24.50.
Analyst: “We continue to account for ramp-up challenges throughout H1/25 at Tucumã. We continue to see risks to 2025 consolidated production guidance and projected FCF inflection without further confirmation that the operation’s commissioning challenges are fully resolved.”
* First Quantum Minerals Ltd. (FM-T, “outperform”) to $24 from $25.50. Average: $21.49.
Analyst: “Despite accounting for Zambian rainy season, our Q1 estimates remain ahead of Consensus as we continue to see strong gold by-product production helping to offset inflationary pressures on costs.”
* Hudbay Minerals Inc. (HBM-T, “outperform”) to $14.50 from $15.50. Average: $14.79.
Analyst: “Hudbay’s valuation is primarily levered to long-term metal prices especially copper, zinc and gold. Commodity prices are impacted by several external factors out of the company’s control, including interest rates, inflation and supply/demand fundamentals.”
* Lundin Mining Corp. (LUN-T, “outperform”) to $15.50 from $17.50. Average: $14.95.
Analyst: “Our Q1/25 estimates are broadly in-line with Consensus, and we expect the inaugural sulphide resource update at Filo del Sol to be a significant positive catalyst in Q2/25.”
* Teck Resources Ltd. (TECK.B-T, “sector perform”) to $70 from $72. Average: $66.10.
Analyst: “We account for unplanned downtime impacting production/costs at QB2 with more consistent operations by H2/25. More confidence in achieving 2025 operating guidance as well as increased pace of the ongoing share buyback would make us more constructive on TECK/B at these levels relative to peers.”
The analysts added: “ERO, CS and FM have the highest leverage to copper prices while HBM, LUN, MTAL and TECK/B all screen favorably at lower commodity prices from a FCF and valuation perspective in 2025.”
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Scotia Capital analyst Maher Yaghi is focused on balance sheet health heading into first-quarter earnings season for Canadian telecommunications companies.
“Industry valuations imply that the current dislocation in wireless pricing is expected to extend for another few years coupled with continued normalization in industry loading from lower immigration trends,” he said. “We believe in the current environment, management teams need to maximize FCF conversion (QBR is excelling in this) and reducing leverage. It is hard to convince investors to pay up for acquired growth when the base business is showing weak growth and leverage is elevated. As we enter reporting season, the topics of discussions will likely center on: 1) how fast wireless sub growth is normalizing; 2) are companies starting to see a slowdown in enterprise spending from tariffs; 3) actions taken by management teams to maximize FCF generation and paying down debt. We could review our rating on BCE if the dividend is cut by 50 per cent or more coupled with improved visibility on Ziply’s capex spend and sustainability of organic FCF generation. Rogers needs to improve its underlying FCF generation for us to return to a more positive view on the shares. We maintain our SO on TELUS given improving deleveraging and FCF outlook.”
Mr. Yaghi made three modest target changes on Wednesday. They are:
* BCE Inc. (BCE-T, “sector perform”) to $39.50 from $40. The average is $34.77.
Analyst: “Bottom line, the dividend yield of 13 per cent on BCE shares vs the company’s FCF yield of 8 per cent makes it unfeasible for the board not to take action to reduce the distribution ratio of the company. We believe a minimum divi cut of 50 per cent is required, but a 55-per-cent cut would be better. We discussed this before in separate research, but we don’t believe BCE has a FCF generation problem. Cutting the dividend, stopping the DRIP, immunizing the balance sheet from additional U.S. expansion capex and some asset sales would go a long way to making us more positive on the stock given current valuations. It is likely many of those catalysts could be announced come earnings. ... Tackling those issues should relieve significant pressure on the stock. As it relates to earnings, we believe the outlook on enterprise spending in the second half will be topical as we are hearing delays in IT project starts already while immigration will be a focus for the outlook on wireless and broadband loading.”
* Quebecor Inc. (QBR.B-T, “sector perform”) to $36.50 from $36. Average: $39.08.
Analyst: “We expect QBR to have loaded around 41 per cent of wireless industry subs in Q1 (vs BCE, T and RCI) up from 24 per cent and 29 per cent in Q3 and Q4, respectively. A performance that will likely be difficult for incumbents to accept if they repeat this for many more quarters, so essentially, we see two outcomes at this point. Either Freedom will lift prices above the current $39/60GB and keep them up and return to 25 per cent of industry net loading or incumbents will lower prices to gain back momentum. Obviously, it would be most beneficial for everyone if the first outcome is chosen. Quebecor has shown signs of wanting to increase prices, so we are leaning towards the first solution even if this is not what’s currently implied in industry valuations. Our EBITDA estimate for the quarter is below consensus due to an implied stock based compensation expense assumption as QBR’s stock is up year-over-year and that will reflect in additional non-cash expense in the quarter similar to what occurred in 3Q24.”
* Rogers Communications Inc. (RCI.B-T, “sector perform”) to $49.50 from $50. Average: $52.68.
Analyst: “In the face of continued price discounting and tit-for-tat promotions in Q1, Rogers was not as reactive as in previous periods. As a result, we expect the company to report low post paid sub loading figures with trends complicated by continued overall population growth rates which began to show a meaningful deceleration back in 3Q24, a trend that we expect to have accelerated in 1Q vs 4Q. We believe the company could choose to remain rational in 2Q as well given the industry’s low loading figures normally. The big question however is what will happen in 3Q. If general pricing does not improve before then, we believe it will be difficult for Rogers to remain on the sidelines for too long given the importance of the back to school season to yearly loading dynamics. Investors need to also watch real FCF generation in Q1 to see if trends begin to improve vs last year, especially as it relates to working cap and restructuring cash usage.”
Mr. Yaghi maintained a $75 target for Cogeco Communications Inc. (CCA-T, “sector perform”) and a $23.50 target for Telus Corp. (T-T, “sector outperform”). The average is $78.10 and $21.99, respectively.
“ELUS is currently the only SO in our coverage given its industry leading top and bottom line growth and an improving FCF and balance sheet outlook,” he said.
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Citi analyst Jon Tower expects to see “relative strength” from Tim Hortons when Restaurant Brands International Inc. (QSR-N, QSR-T) when it reports first-quarter 2025 results on May 8.
“QSR has the advantages of its two largest profit centres (Tims Canada, BK Intl) being relatively insulted from immediate tariff risk and Tims potentially benefitting from anti-American sentiment in Canada,” he said in a note released before the bell.
“We expect this remains the dominant theme coming out of EPS until either: (1) high-frequency data starts painting a slower picture for the industry; and/or (2) investors start positioning for new news out of a competitor later this spring.”
To reflect the strength of Tim Hortons’ same-store sales growth as well as the impact of foreign exchange, Mr. Tower raised his full-year 2025 earnings per share projection to US$3.57 from US$3.52, however his 2026 estimate dipped by 9 US cents to US$3.83.
“Key topics/questions — (1) How is anti-American sentiment impacting its brands, specifically is Tims getting a local halo in Canada (and how can local franchisees lean into this in terms of messaging?) and is BK seen as American brand in INTL markets or can it fare better as the “not MCD” option? (2) What are the coffee supply implications of confirmed or potential tariffs? What about equipment/paper & packaging? (3) How did consumers respond to the return of physical roll ups at TH? Is there a way to frame the Yr/Yr lift? (4) Early days, but are there new insights in China after the BK partner was acquired? Do rising trade tensions change thinking on the ultimate ownership structure? (5) Any updates on the timeline for improvements to Tims espresso? (6) Are there specific plans to go against more chicken messaging in the market as we move into 2Q?,” he said.
“What the data says — (1) Yr/Yr BK US Footfall trends decelerated in 1Q, slowing to down 3.3 per cent from down 1.9 per cent in 4Q, while its market share versus the Big 3 has bounced around neutral to mildly contracting year-to-date. (2) Canada LSR sales started the year on a slightly softer note (up 4 per cent vs up 6 per cent in 4Q), and, while up Yr/Yr, seq unemployment trends have stabilized. (3) France’s (large market for BK Intl) services confidence index continues to trend lower, with March nearing recent lows. Unemployment has been stable.”
Maintaining his “neutral” rating for Restaurant Brands shares, Mr. Tower trimmed his target by US$1 to US$66. The current average is US$77.76.
“The company has demonstrated an ability to improve franchisee profitability in core home markets across the portfolio and we expect this broadly continues, along with strong unit growth for Burger King International, ramping of PLK brand globally and solid comp growth at TH Canada,” he said. “However, limited visibility into the economics of nascent businesses outside core markets (e.g., PLK INTL, TH INTL, FHS) means its difficult to underwrite NRG (new restaurant growth) returning to and sustaining at more than 5 per cent and layering this into valuation. At the same time, we see above average room for near- to medium-term estimate volatility related to the Burger King U.S. brand repositioning/reinvestment (including the integration of the TAST business) particularly as the competitive set struggles to drive traffic.”
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Alongside better-than-expected fourth-quarter 2024 results driven by a strong revenue performance, Groupe Dynamite Inc.’s (GRGD-T) full-year guidance should reassure investors despite macro headwinds and a tariff overhang, according to Stifel analyst Martin Landry.
“Management introduced a guidance that surprised positively given expectations of stable EBITDA margins year-over-year in FY2025 despite the threats of significant tariffs imposed by the United States on Chinese exports,” he said. “Management expects to navigate the tariff headwinds by (1) reshuffling its sourcing to other countries with lower tariffs, (2) by taking price increases, (3) by extracting operational efficiencies, and (4) by benefiting from scale benefits. Investors reacted positively to this scenario as it was much better than feared, sending the shares up 6 per cent on [Tuesday]. In addition, management expects to continue to grow its comparable store sales in FY2025 at a healthy pace of 5.0-6.5 per cent despite a softening consumer confidence. This was also better than feared.”
Mr. Landry thinks the Montreal-based clothing retailer’s new fiscal year “appears to have started well” with comparable store sales up 6 per cent year-over-year for the first 9 weeks, despite the benefit of the Easter weekend (later this year) not yet included. He noted guidance calls for adjusted EBITDA margin of 30.3-32.3 per cent, which represents a 30 basis points year-over-year erosion at the midpoint to 31.3 per cent, but surpassing consensus expectation of 28.7 per cent.
“The company is advancing its plan to open a distribution centre in the U.S., announcing an agreement with a third-party logistics provider,” said the analyst. “The new DC, expected to go live in summer 2025, would serve most of GRGD’s U.S. operations and add redundancy to its current single DC in Montreal. Additionally, the new DC would lower shipment costs and provide fiscal efficiency by importing directly to the United States rather than through Canada. We estimate the new DC could increase EBITDA by $3-5 million.”
“Groupe Dynamite is navigating tariff uncertainty by leveraging its short lead time and shifting sourcing from China to Bangladesh, Cambodia, and Vietnam. Management believes persistent tariffs to have an inflationary impact on the apparel sector regardless of sourcing locations. In this scenario, management is confident in its pricing power due to a history of successfully increasing prices at twice the rate of inflation. Key components of GRGD’s pricing power include brand momentum, affordable prices, and a prime real estate portfolio. Additionally, since most SKUs are refreshed each season, the perception of price increases would be more moderated.”
Despite his positive outlook and unchanged “buy” recommendation, Mr. Landry trimmed his target for Groupe Dynamite shares by $2.50 to $26 as he lowers multiples across his coverage universe to “reflect the increased risk premium.” The average target is $21.30.
“According to our analysis, GRGD can grow its EPS at a mid-to-high teens CAGR [compound annual growth rate] over the coming four years,” he said. “Hence, valuation at 7 times P/E is appealing representing a PEG ratio of 0.35 times vs. the average of peers at 1 times. Given GRGD’s healthy balance sheet, with no bank debt, and its strong ROCE [return on capital employed] of 47 per cent, there is potential for valuation expansion over time.”
Other analysts making target adjustments include:
* Desjardins Securities’ Chris Li to $20 from $25 with a “buy” rating.
“GRGD reported a solid 4Q, with strong top-line momentum and EBITDA margin expansion,” said Mr. Li. “While the positive momentum has continued in 1Q, low macro visibility and fluid trade developments significantly cloud the FY25 outlook. Although we expect near-term volatility in the stock from ongoing developments, we maintain our long-term positive view as GRGD is well-positioned to achieve low-double-digit EPS growth, supported by attractive industry growth, new store openings and market share gains.”
* Scotia’s John Zamparo to $13 from $12 with a “sector perform” rating.
“The unexpected buyback, 6-per-cent quarter-to-date same-store sales and 2025 guidance likely buoyed GRGD’s performance [Tuesday], though we’re unsure how to gain conviction in any forward guidance in this environment, particularly GRGD’s relatively robust outlook,” said Mr. Zamparo. “Industry-wide, we anticipate meaningful price increases, tougher conditions for consumers, and the potential risk of disruption to operations. GRGD provides some insulation in that it has experience in shifting its supply chain, and its pricing power track record is commendable. In our view, it’s difficult to see that benefit as more material than the risks present, barring a change to U.S. tariffs on China.”
* National Bank’s Vishal Shreedhar to $23 from $26 with an “outperform” rating.
“GRGD trades at 5.1 times our NTM [next 12-month] EBITDA and 9.2 times our NTM EPS, which we view to be inexpensive,” said Mr. Shreedhar. “Investment in GRGD is differentiated by strong financial metrics, with an EBITDA margin and ROIC that is amongst the highest in our apparel group (F2024 EBITDA margin of 31.6 per cent and ROIC of 47.4 per cent). As GRGD establishes a successful track record, we expect upward pressure on the valuation multiple over time.”
* Barclays’ Adrienne Yih to $14 from $19 with an “equal-weight” rating.
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With valuations in the building products sector having “been demolished by macroeconomic turbulence,” Desjardins Securities analyst Frederic Tremblay thinks “the time has come for investors to revisit compelling stories in the space.”
In a report released Wednesday, Mr. Tremblay initiated coverage of Adentra Inc. (ADEN-T) and Atlas Engineered Products Ltd. (AEP-X) with “buy” recommendation, emphasizing “volatility brings opportunities.”
“The report title ‘If you build it, they will come’ reflects our view that the management teams at ADENTRA (ADEN) and Atlas Engineered Products (AEP) are building solid companies and that, in time, investor sentiment toward the building products sector should turn more positive,” he said. “We acknowledge that the sector is coming off a challenging 2024 and that some headwinds are likely to persist in 2025. However, along with solid strategic execution at ADEN and AEP, we believe the healthy long-term sectoral fundamentals should not be ignored.
“Equities in the building products space have been under pressure, with valuation multiples hovering around multi-year lows. That said, with positive fundamentals supporting a constructive long-term outlook, we see the depressed valuation multiples as an opportunity for investors to revisit the sector and take advantage of its attractive risk/reward proposition.”
The analyst also sees the headwinds holding back new home construction “only prolonging an already massive ‘underbuilt’ position and potentially inflating the magnitude of an eventual recovery in housing and home improvement.”
“The latter is also supported by the aging of the housing stock and higher home equity levels,” he saidOur view is that investors can lean on the sector’s positive long-term fundamentals and its valuation contraction to find compelling risk/reward propositions. We believe ADEN and AEP fit the bill.”
Mr. Tremblay set a $46 target for shares of Langley, B.C.-based Adentra. The current average is $45.50.
“ADEN is a leading distributor of architectural building products through the North American Industrial, Pro Dealer and Home Center channels,” he said. “Thanks in part to diversification, it offers a combination of resilience and growth, with an ability to weather the short-term storms while advancing on a multi-year trajectory of profitable growth within its US$43-billion market. We forecast an organic revenue decline in 2025 (we opted to be below outlooks from market participants calling for a flattish year) and a recovery to 5 per cent in 2026. Margin protection, a healthy balance sheet, cash flow generation and M&A upside reinforce our positive stance.”
For Nanaimo-based, the analyst set a $1.50 target. The average is $2.16.
“AEP is a Canadian leader and consolidator in the design and manufacturing of roof trusses, floor trusses and wall panels for residential and commercial construction projects, in addition to distributing a range of engineered wood products,” he said. “We like that ready-to-install products from AEP help address key issues for builders, including on-site construction labour shortages. We believe that AEP’s automation project can keep it steps ahead of the more traditional competition. Following eight acquisitions since 2017, acting on a pipeline of M&A targets in a fragmented market remains one of management’s priorities. We forecast revenue growth of more than 20 per cent in both 2025 and 2026 and, with the recent increase in activity (eg quotes), we believe that AEP’s phase of sacrificing margin to gain volume should soon come to an end.”
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While admitting “low confidence,” TD Cowen analyst Aaron MacNeil reduced his estimates for Canadian energy services providers, believing “it is too early to call for a recovery in D&C-weighted stocks, despite several stocks with attractive valuations”
“With our Q4/24 preview, we had reduced our Canadian industry activity level forecast ahead of the 10-per-cent tariff on Canadian energy imports,” he said. “While Canadian energy imports are now tariff exempt, increased OPEC+ production and lower demand forecasts ... has resulted in commodity price weakness. We believe this creates a challenging macro outlook for energy services which was already contemplated in our Canadian industry activity forecast. As a result, our 2025 Canadian rig count forecast of 175 remains unchanged. That said, our 2026 forecast decreases by 5 rigs (down 2 per cent) given the uncertain macro-outlook.
“The economic consequences of the U.S. Administrations’ trade war and OPEC’s decision to increase production more than expected has created weakness in commodity prices and macro uncertainty, in our view. In this context, we expect a reduction in U.S. industry activity levels and, as a result, we are reducing our rig count estimate by 5 per cent in 2025 and carries through 2026 (down 11 per cent).”
Mr. MacNeil made his changes to reflect first-quarter activity levels, TD’s updated commodity price deck and industry forecasts “including the North American macro uncertainty, the decline in share price impact on stock-based compensation expense, as well as other relevant modelling factors.”
“Overall, companies with exposure to D&C activity (CES, Ensign, Pason, Precision) featured reductions to 2025/2026 estimates with the recovery of U.S. activity being pushed out beyond 2026,” he said.
With his new forecast, he made these target adjustments:
- CES Energy Solutions Corp. (CEU-T, “buy”) to $9 (Street low) from $11. Average: $10.78.
- Enerflex Ltd. (EFX-T, “buy”) to $15 from $17. Average: $14.72.
- Ensign Energy Services Inc. (ESI-T, “hold”) to $2.25 (Street low) from $2.75. Average: $3.38.
- North American Construction Group Ltd. (NOA-T, “buy”) to $27 (Street low) from $33. Average: $39.86.
- Precision Drilling Corp. (PD-T, “hold”) to $69 (Street low) from $89. Average: $113.36.
- Pason Systems Inc. (PSI-T, “buy”) to $13 (Street low) from $16. Average: $16.70.
- Trican Well Service Ltd. (TCW-T, “hold”) to $4.75 (Street low) from $5. Average: $5.81.
“Enerflex (EFX-T, BUY, $15.00 TP) remains our Top Pick given its high proportion of contracted/recurring cash flows, natural gas weighting and other company-specific catalysts,” said Mr. MacNeil.
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In other analyst actions:
* CIBC’s Scott Fletcher cut his Dye & Durham Ltd. (DND-T) target to $21 from $25, keeping an “outperformer” rating. The average is $20.84.
“Calendar Q1 is already a seasonally weaker quarter for the majority of our coverage, and recent tariff-related macroeconomic headwinds have the potential to result in guidance reductions or more conservative outlooks in light of softer growth expectations,” he said in a preview of earnings season for Canada’s technology sector. “Post Q4, the Street has revised Q1/25 EBITDA estimates down an average of 57 per cent across our coverage. Across our coverage, we an are average of 30 bps below the Street.”
“We have revised estimates across the majority of our coverage, tempering growth expectations, with tariff uncertainty driving customers to take a “wait and see” approach and elongating Q1 sales cycles. Our EBITDA estimates move lower for Open Text, Enghouse, Constellation, Descartes, and Converge. We have revised our EPS estimate for CGI slightly higher to reflect CGI’s share repurchase program in the current environment. We have also revised our Calian EBITDA estimate higher to reflect seasonally stronger performance of its Decisive subsidiary.”
* Mr. Fletcher also lowered his target for Well Health Technologies Corp. (WELL-T) to $5 from $7 with a “neutral” rating. Other changes include: Ventum Capital’s Rob Goff to $7.60 from $8 with a “buy” rating, Stifel’s Justin Keywood to $9 from $10 with a “buy” rating and Scotia’s Kevin Krishnaratne to $7 from $8 with a “sector outperform” rating. The average is $8.18.
“Recognizing current headwinds, we look for significant outperformance with the completion of monetizations and continued outperformance across core assets through organic and acquisition-driven gains,” said Mr. Goff. “Organic growth and appreciating ROIC levels across the core portfolio look to emerge with monetizations of Wisp and Circle. Our bullish outlook for clinic consolidation and subsequent organic growth looks for WELL to build on its impressive track record empowered by scale and portfolio advantages that allow it to shape-shift clinic economics. The current ‘Buy in Canada’ focus should lead to tangible wins over the NTM [next 12 months] with the pipeline of 70+ put at a value of $300-500-million in what we estimate would be $60-80-million of annual revenues.”