While National Bank Financial analyst Rupert Merer feels it’s safe to declare Algonquin Power and Utilities Corp.’s (AQN-N, AQN-T) “growth story is coming back” following a positive investor update that included a launch of its “Back to Basics” capital plan, he lowered his recommendation for its shares to “sector perform” from “outperform” in response to steep recent price appreciation.
Shares of the Oakville, Ont.-based company jumped over 16 per cent and now sit up almost 40 per cent year-to-date after it released capital expenditure plans that exceeded the expectations of both Mr. Merer and the Street.
“AQN is calling for $2.5-billion in investments from 2025 to 2027,” he said. “This is above our previous forecast of $1.9-billion, and takes its rate-base forecast up to $9.1-billion by 2027 (up from $7.9-billion in 2024). With these investments largely back-end loaded in the time horizon, we do not believe that they have a positive impact on AQN’s revenue forecast for 2027. However, the added $600-million in capex, when added to our model, has a $0.04-$0.05 per share impact on our forecast given the cost of carrying the investment. This investment positions the company well for future revenue growth however, and is factored into its 8.5-per-cent ROE [return on equity] forecast for 2027 as a regulatory lag.
“The company has been awarded $770-million in 161 kV and 345 kV transmission projects in the most recent SPP Integrated Transmission Plan. These investments should have attractive returns, with little regulatory lag. This should provide investors some visibility on a longer runway for growth with investments anticipated from 2027 to 2029.”
Algonquin’s earnings per share guidance now calls for 30-32 cents per share in 2026, 35-37 cents in 2027 and 42-46 cents in 2027. All fell largely inline with the consensus expectations on the Street.
Given those projections, Mr. Merer said the company’s assumptions on rate-case awards “may leave room for upside” and he sees “some opportunities for investment in growth.”
“With multiple rate cases requesting more than $150-million in revenue (20 cents per share), variations in the assumptions on the timing and scale of awards drives variances in the earnings outlook,” he explained. “With large revenue requests, AQN may have a more conservative view than our previous forecast. AQN should also be active in cost reduction programs to improve operating efficiency and bring it closer to is allowable returns, targeting 8.5 per cent in ’27 (allowed 9.2 per cent) on an expanded rate base with some regulatory lag.”
“AQN is forecasting $2.5-billion of investment into regulated assets over the next three years (we had $1.9-billion), largely back-end loaded, taking its rate base to $9.1-billion by ’27E. The company has visibility on investment growth beyond this period, with the recent award of $770-million in 161 kV and 345 kV transmission projects in the most recent SPP Integrated Transmission Plan. These investments should have attractive returns, with little regulatory lag. Working with its stakeholders, AQN could also look to help bring large loads (like data centres) into its territory. We believe AQN could fund growth with some asset recycling, including the sale of its hydro portfolio (could fetch over more than $300-million) and ultimately the sale of some of its many regulated assets too.”
Mr. Merer maintained a target of US$6.75 for Algonquin’s U.S.-listed shares. The current average on the Street is US$5.92, according to LSEG data.
Elsewhere, other analysts making target adjustments include:
* Desjardins Securities’ Brent Stadler to US$6 from US$4.75 with a “hold” rating.
“AQN’s financial outlook was much better than we expected. We have increased our estimates to the low end of the guidance ranges. The focus is now on management executing on regulatory proceedings and driving operating efficiencies to hit targets. With that said, we remain impressed with the management team and have a higher degree of confidence in its ability to deliver. We have rolled forward our valuation to 2027 and increased our target,” said Mr. Stadler.
* TD Cowen’s Sean Steuart to US$6.50 from US$6 with a “hold” rating.
“Headed into [Tuesday’s] guidance, we thought it was in management’s best interest to set expectations low; instead, investors reacted positively to the ambitious growth targets. Meeting these objectives depends on AQN’s ability to cut costs and bridge the wide gap between earned and allowed ROE,” he said.
* RBC’s Nelson Ng to US$6.50 from US$6 with a “sector perform” rating.
“Management introduced its ‘Back to Basics’ strategy, outlining EPS targets through 2027, a path to achieving 8.5-per-cent ROE, and 5-per-cent CAGR rate base growth,” he said. “We believe the plan exceeded investor expectations, particularly in 2027, and offered greater clarity through 2027, driving a 16-per-cent increase in the stock price. We are raising our price target to $6.50 (from $6.00), but maintaining our Sector Perform rating as we see execution risk and believe the shares are fairly valued (currently trading at 21 times and 17 times the mid-point of management’s 2026 and 2027 guidance respectively, excluding HLBV [Hypothetical Liquidation at Book Value] income).”
* Raymond James’ Theo Genzebu to US$6 from US$5 with a “market perform” rating.
“From where we sit, we take a positive view on AQN long-term as a pure-play regulated utility, but we remain cautious as to the outlook in the near term,” he said. “We reaffirm our Market Perform rating on AQN following the company’s outlook update [Tuesday]. Although we maintain that financing and depreciation costs from $1.0-billion in invested capital not currently reflected in rate base and delays in the regulatory calendar will have an impact on 2025 and 2026 earnings, we believe that the company’s updated outlook outlines a viable path through these obstacles moving the company forward on its trajectory to a premium, pure-play regulated utility in the long term.”
* Scotia’s Robert Hope to US$6.50 from US$6 with a “sector perform” rating.
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RBC’s global mining equities team updated their commodity price forecasts for the second quarter, including increases to their gold price forecast of 9 per cent over 2025/26 and 18 per cent for their long-term assumption (to $2,600 per ounce), driving gold net asset value estimates up 17 per cent and 2025 adjusted EBITDA estimates by 7 per cent.
“We maintain positive views on gold equities, supported by attractive valuations and improving return of capital,” the analysts said. “Our copper equity views improve incrementally, supported by a longterm positive outlook, despite near-term tariff uncertainties. We continue to see iron ore risks, and maintain a neutral outlook for diversified equities. Our outlook for uranium equities remains positive, supported by strong long-term fundamentals.”
For gold, the firm added: “We increase our 2025/26 gold forecast to $3,163/oz (up 5 pee cent vs. prior) and $3,489/oz (up 12 per cent vs. prior), respectively. Our outlook is for range bound gold prices in 2H vs. current prices of $3,350 per ounce (up 28 per cent year-to-date), but we expect further upside over 2026. We increase our long-term gold price to $2,600 per ounce (up 18 per cent vs. prior $2,200/oz). We maintain a positive view on the sector, given attractive valuations and improving capital allocation trends. At spot gold, large-cap gold producers trade at 2025/26 FCF/EV yield of 7.6 per cent/7.8 per cent and EV/EBITDA of 5.4 times/5.1 times. Our preferred precious metals equities include Agnico Eagle, AngloGold Ashanti, Bellevue Gold, Coeur Mining, G Mining, Gold Fields, Hochschild Mining, OR Royalties, Torex Gold, and Westgold Resources.”
For copper, the analysts said they are marking near-term prices higher, but they warned “uncertainty remains.”
“We mark-to-market our 2025 forecast to $4.31 (up 5 per cent) due to higher 2H forecasts on tight market conditions. We maintain our 2026 forecast of $4.50 and 2027-2029 forecast of $5.00 as we expect a period of higher copper prices will be required to incentivize new production to meet a growing potential supply deficit. We maintain our long-term price of $4.00. Our preferred copper equities include Capstone and Hudbay.
“Long-term iron-ore pricing unchanged, revising our short-term views downward. We slightly revise our 2025 forecasts to $97/t (down 1 per cent vs. prior) as supply disruptions dissipate and impacts of Chinese stimulus and steel reform are digested. We forecast a decline in global demand, anchored by real estate sector headwinds. We maintain our 2026-2029 prices and make no change to long-term forecasts for Iron ore ($75 per ton). Our preferred diversified and bulk mining equities include Glencore and Champion Iron.”
The price deck changes for precious metals led analysts Josh Wolfson, Michael Siperco and Harrison Reynolds to make a group of target price adjustments to stocks in their coverage universe. They include:
- Agnico Eagle Mines Ltd. (AEM-N/AEM-T, “outperform”) to US$145 from US$115. The average on the Street is US$137.49.
- Barrick Mining Corp. (B-N/ABX-T, “outperform”) to US$26 from US$23. Average: US$24.71.
- Franco-Nevada Corp. (FNV-N/FNV-T, “sector perform”) to US$190 from US$160. Average: US$173.55.
- Kinross Gold Corp. (KGC-N/K-T, “sector perform”) to US$19 from US$14. Average: US$17.21.
- Newmont Corp. (NEM-N/NGT-T, “sector perform”) to US$66 from US$52. Average: US$64.74.
- Triple Flag Precious Metals Corp. (TFPM-N/TFPM-T, “sector perform”) to US$23 from US$19. Average: US$22.33.
- Wheaton Precious Metals Corp. (WPM-N/WPM-T, “sector perform”) to US$90 from US$80. Average: US$94.73.
One rating change was made with Mr. Siperco upgrading Novagold Resources Inc. (NG-A, NG-T) to “outperform” from “sector perform” with a US$7 target, rising from US$5 but below the US$10 average.
“The new partnership revives the Donlin project in our view, after progress had stalled under the NG/Barrick JV,” he said. “We see valuation upside in a bullish gold price environment over the next several years, starting with the resumption of work on an updated feasibility study work. Donlin in Alaska remains a high quality, long life, large scale deposit, but challenges remain ahead of any potential construction decision (2028+), and we think the new ownership structure should unlock valuation upside.”
For base metals equities, analyst Sam Crittenden made these target price changes:
- First Quantum Minerals Ltd. (FM-T, “outperform”) to $25 from $24. The average is $21.87.
- Freeport-McMoRan Inc. (FCX-N, “sector perform”) to US$54 from US$52. Average: US$46.19.
- Hudbay Minerals Inc. (HBM-T, “outperform”) to $17 from $16. Average: $14.98.
- Nexa Resources SA (NEXA-N, “sector perform”) to US$7 from US$8. Average: US$6.59.
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While acknowledging its first-quarter results came in “mixed” versus expectations, Desjardins Securities analyst Brent Stadler continues to see EverGen Infrastructure Corp. (EVGN-X) offering investors “a unique opportunity to take early advantage of the RNG wave, which we believe is essential to reaching global decarbonization goal.”
On May 30, the Vancouver-based company reported revenue for the quarter of $1.9-million, down 41 per cent year-over-year and below the analyst’s $3.2-million estimate due largely a decline in tip fee revenue at its organic waste and composting facilities. RNG volume grew by 21 per cent to 43,014 gigajoules, exceeding Mr. Stadler’s 39,976 estimate by 8 per cent.
“Pperational challenges weighed on results,” he said. “However, EVGN believes it is poised to address these challenges given its strengthened balance sheet following the closing of the first $5-milllion tranche of its $7-million private placement. We view the return of Chase Edgelow as CEO as a positive development that adds confidence to the story as we look for its projects to achieve nameplate capacity on a consistent basis.”
“With Mr Edgelow back at the helm, EVGN provided an update on its corporate strategy: Phase 1—Optimize. In this initial phase, EVGN is focused on achieving nameplate capacity at its FVB and GrowTEC facilities. Following the recent capital injection, EVGN now has the resources to enhance preventative maintenance across its assets, which is expected to reduce downtime and improve operational performance. Previous bottlenecks that hindered efficiency are being addressed. Phase 2—Build. EVGN is currently conducting a 60–90-day evaluation of potential expansion projects as part of GrowTEC Phase 2, and we look forward to an update. Similar initiatives are underway at other facilities, with the goal of identifying and advancing the most promising opportunities. Larger projects in the pipeline, such as Project Radius, are also moving along. Phase 3—Grow. Once EVGN has achieved a stable base of cash flow generating assets, EVGN plans to re-enter growth mode. This could include brownfield acquisitions with expansion potential, large-scale greenfield developments like Project Radius or expansion into new jurisdictions. The ultimate goal is to build long-term, contracted cash flow infrastructure projects.“
Despite that optimism, Mr. Stadler cut his target for the company’s shares by $1 to $2, citing the results and recent private placement, with a “buy” rating (unchanged). The average is $2.
“We expect EVGN to execute on (1) closing the final $2-million tranche of its $7-million private placement; (2) continued ramp of RNG production at its FVB and GrowTEC facilities; (3) refinancing its debt facility; and (4) providing an update on the PCR expansion (3Q25) and Project Radius,” he said.
Elsewhere, RBC’s Nelson Ng reiterated his $1 target and “sector perform” rating.
“EverGen reported Q1/25 results that were in line with our estimates and completed some liquidity initiatives including the closing of the first tranche of the private placement. We expect investors to remain cautious and wait for clear execution on operational improvements and margin enhancements. We would stay on the sideline until the debt metrics improve (i.e., improved EBITDA and free cash flow generation),” said Mr. Ng.
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In a client note released Wednesday titled Shoring Up Liquidity Comes at a Very High Cost, Stifel analyst Daryl Young said he’s “encouraged” to see NFI Group Inc. (NFI-T) finally has a comprehensive debt package in place following its new $600-million second lien notes offering and now possesses “appropriate ”liquidity with more than $300-million available following the close of the transaction later this month.
However, he emphasized the offering was “larger and much more expensive” than he had anticipated.
“We understand some elevated cost reflects NFI being a first time issuer, but it still seems expensive (will be interesting to see how the notes trade going forward),” he said. “Moreover, we think the 5-year term is a long time to lock-in given NFI is on the cusp of improving throughput volumes and returning to healthy FCF generation, presumably allowing for better terms; in our view, the repayment terms make it unlikely that NFI will retire the debt before July 1st 2028.”
Mr. Young reduced his 2025 earnings per share estimate by 12.6 per cent to 58 US cents from 67 US cents and his 2026 projection by 13.1 to US$1.06 from US$1.22 to reflect the higher-than-expected interest cost.
“Our prior forecast assumed a more attractive rate with a greater proportion of bank debt in 2026 and faster debt repayment; post transaction our cash interest costs for 2026 have increased from $69-million to $94-million,” he explained. “The 2026 cash interest includes a base level of locked-in interest of $67-million (9.25-per-cent high-yield notes and the 5-per-cent convert), plus an assumption for the amount/rate on the first lien bank debt, and the fees on the letters of credit (which don’t show on the balance sheet). Given the inability to pre-pay the high-yield notes until 2027, we expect NFI to utilize all cash flows to reduce its first lien debt.”
Maintaining his “buy” rating for NFI shares, Mr. Young cut his target by $1 to $22. The average is $20.40.
“The terms/cost of the balance sheet restructuring were disappointing, and put a dent in the near-term FCF story,” he said. “However, the stock is still trading at an 10-per-cent FCF yield on our revised 2026 estimates, and the industry set-up remains highly attractive (monopolistic U.S. competitive environment, healthy funding, pent-up demand, and arguably ‘too big to fail’ dynamics for NFI). Also, we see potential for NFI to deliver more than $400-million of EBITDA in 2026 and beyond under relatively conservative assumptions, but no question, this remains firmly a ‘show-me’ story.”
“From a macro perspective, we believe the outlook for NFI is extremely encouraging given record levels of government funding available for North American transit agencies to support fleet replacement and conversion to zero emission buses (’ZEBs’). Additionally, the competitive environment has markedly improved from 2019 when there was a looming fear of industry overcapacity with several new North American entrants versus today where the U.S. market has effectively been rationalized to a duopoly (and a monopoly in several major markets). In our view, NFI has industry-leading products and is best positioned to capitalize on the recovery of the North American transit market as the supply chain challenges ease, clearing the way for strong earnings growth and valuation expansion.”
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After a site visit on Tuesday to Torex Gold Resources Inc.’s (TXG-T) Morelos site in Guerrero Gold Belt of Mexico, Scotia Capital analyst Eric Winmill said he was “favourably impressed with the local team” and the “considerable” work completed since his last visit in May 2023.
“2025 production remains on track - With gold production of 60koz AuEq achieved in Q1/25, Torex reiterated guidance for 2025E production with Q1 results at 400k to 450koz AuEq (including 40-45Mlbs Cu) with AISC of $1400-$1600/oz. TXG indicated that Q2 will be the last quarter of negative free cash flow (and highest AISC) as ELG pits winds down and with FCF generation planned to improve in 2H/2025,” he said. “Torex expects production to sequentially improve through 2025 with Q3 and Q4 to be the strongest production quarters of the year. TXG has guided to be at a net debt position of $90M following the Media Luna construction.”
“Media Luna continues to ramp up with the paste backfill plant scheduled to come online in the coming weeks. Paste plant building construction has been completed with 10 km of the total 14.5km of piping for the paste backfill system reportedly completed to date. Piping installing is being sequenced when the conveyor is off to ensure maximal safety. Tailings will be pumped to the south side plant at 55-per-cent solids, to be thickened to 65 per cent with the addition of 6-8-per-cent binder (i.e., cement) before being pumped underground and based on a 30-day cure time for backfilled stopes and first stope to be filled likely in July 2025. TXG continues to work through optimization activities at the site, including identification of critical spare parts and procuring inventory in site—two of the key items are backup pumps (at a cost of $3.5 -million each) for moving tailings to the south side and into underground workings, with backup pumps to be in place later in 2025. Other projects such as installing short conveyors/grasshoppers for on site material movement and ore rehandling along with site cleanup and debottlenecking are planned."
Mr. Winmill also emphasized Toronto-based Torex “continues to evaluate accretive M&A targets with a capital returns strategy planned to coincide with free cash flow (FCF) generation in 2H/2025.”
“Torex has an NCIB in place— as FCF improves later this year, the company plans to prioritize debt repayment, share buybacks and possibly dividends,“ he said. ”Regarding M&A, the Torex team continues to evaluate possible accretive targets in the Americas, either at producing or development stage.
Maintaining his “sector outperform” rating for Torex shares, he raised his target to $50 from $48. The average is $54.46.
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