Inside the Market’’s roundup of some of today’s key analyst actions
Warning replacing Hudson’s Bay Co. is “not likely to be an easy undertaking,” Canaccord Genuity analyst Mark Rothschild downgraded RioCan REIT (REI.UN-T) to a “hold” recommendation from “buy” previously in the wake of the retailer seeking approval to extend its creditor-protection process and begin liquidation.
“From our coverage, the REIT with the greatest exposure is RioCan,” he said. “While over the long-term there could be a positive impact on its portfolio and cash flow, we believe that this will take several years, and the near-term impact is negative. Primaris REIT also has exposure to HBC, and its ten sites generate $4.6-million of net rental revenue, 1.4 per cent of total rent.”
He added: “In February 2015, RioCan invested $325 million for a 20-per-cent interest in a JV, with HBC owning the remaining 80 per cent. In exchange, HBC contributed ten owned or ground-lease properties comprising 3.3 million SF of GLA [gross leasable area] ... While the cash flow generated from the JV has declined over the past year, in 2024 it represented 3.2 per cent of RioCan’s NOI [net operating income]. Additionally, we understand that the bankruptcy court allowed HBC (at this point) to stop paying rent to RioCan, while rent payment to third-party landlords have, in many cases, not been impacted yet.”
Hudson’s Bay landlord RioCan calls CCAA filing ‘disappointing’, makes plans for any vacated space
In a report released Wednesday, Mr. Rothschild said many of the HBC stores carry below-market rental rates and “present an opportunity for greater NOI as these sites are repurposed and leased to new tenants.”
“However, even in good times, re-tenanting large spaces can be both timely and expensive. In the current environment, it could take an extended period of time for many of these sites to generate revenue from new tenants, and the cost to redevelop the space could be substantial,” he said. " Though not clear to what extent, as some of the spaces can generate revenue in the near-term through new leases, there clearly will be a negative impact on FFO.
“We now forecast FFO per unit of $1.85 (from $1.88) in 2025 and $1.90 (from $1.95) in 2026, equating to growth of 3.8 per cent and 2.5 per cent, respectively.”
With that reduction, Mr. Rothschild dropped his price target for RioCan units to $19.50 from $21. The current average on the Street is $21.88, according to LSEG data.
Most of the HBC sites are well located, and there should be demand for new tenants. However, considering the likelihood of this transition taking some time, and the cost involved, we are reducing our NAV estimate to $18.61 (from $19.19), and our target price, which is now set at a 5-per-cent premium to our NAV estimate, is $19.50 (from $21.00),.” he explained. “Reflecting the more modest total return, we now rate RioCan REIT a HOLD (from Buy).”
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Scotia Capital analyst Ken Fisk thinks “the time is right” to buy Canadian Natural Resources Ltd. (CNQ-T), raising his rating for its shares to “sector outperform” from “sector perform” previously.
“Over the last 12 months CNQ has underperformed its Canadian and International large cap peers due to its tariff exposure and weaker oil prices,” he said. “This underperformance presents an opportunity to buy a high-quality company at an attractive price.”
In a research report released before the bell on Wednesday, Mr. Fisk pointed to a trio of factors in justifying his upgrade:
* Recent underperformance is “overdone”
Analyst: “Since tariffs were announced CNQ has underperformed its peers by 8 per cent and over the last 12 months CNQ’s share price has dropped by 15 per cent whereas negative 2025 CFPS [cash flow per share] revisions have averaged 3 per cent. In our view, this share price reaction is overdone considering the small change in estimates. Due to this underperformance, on strip CNQ trades at a 9-per-cent DAFCF [debt-adjusted free cash flow] yield in 2025 compared to CVE, SU, and IMO at 11 per cent, 8 per cent, and 8 per cent, respectively. For reference between 2023-2024 CNQ traded at a 2-per-cent premium to the other Canadian large caps.”
* The company’s fundamentals remain “strong”
Analyst: “We estimate CNQ’s 2025 sustaining capex breakeven WTI at $33/bbl, which is lower than IMO, SU, and CVE’s breakevens at $34.50/bbl, $35.50/bbl, and $42/bbl. Further, we estimate CNQ could fund its dividend and sustaining capex at $47/bbl WTI. This is in line with its Canadian large cap peers, but CNQ has a meaningfully higher dividend yield at 5.5 per cent vs the peer average of 3.6 per cent. This low breakeven reflects an industry-leading cost structure and strong performance across CNQ’s key assets. CNQ’s history of strong execution also positions the company well to achieve its disciplined growth strategy and unlock value for shareholders.”
* It will “disproportionately benefit when the tariff dispute is resolved and/or oil prices move higher.”
Analyst: “CNQ has a relatively high exposure to potential tariffs and the company has underperformed since tariffs were first discussed in late 2024. As such, we would expect CNQ to outperform if the tariff dispute is fully resolved. We view this as the likely outcome over the medium-term given tariffs have been postponed twice and the potential tariff on Canadian energy has been reduced from 25 per cent to 10 per cent. CNQ would also disproportionately benefit from higher oil prices because it would accelerate a step change in the company’s shareholder returns. At $70 and $80 WTI CNQ hits its $15-billion net debt target in late 2026 and Q2/26, respectively. Once this target is achieved CNQ’s buybacks will increase from 60 per cent to 75 per cent of free cash flow after dividends.”
Mr. Fisk’s target price for Canadian Natural shares remains $56. The current average on the Street is $54.83, according to LSEG data.
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Desjardins Securities analyst Chris MacCulloch downgraded seven Canadian energy companies on Wednesday after making a significant reduction to his oil price forecast on the heels of fourth-quarter earnings season in the sector.
“Notably, we have slashed our 2025–26 WTI price deck to US$65 per barrel and US$60 per barrel, respectively (from US$70 per barrel), partially offset by our assumptions of a softening loonie and tightening Canadian oil differentials,” he said. “Although we have increased our 2025 NYMEX price deck to US$4.25/mcf (from US$3.50/mcf), we maintained our 2026 NYMEX and 2025–26 AECO forecast.
“Given our bearish oil price deck, we have slashed target prices across most of our coverage universe while adopting a more balanced sector outlook as returns to target continue thinning.”
For WTI, Mr. MacCulloch attributed the change to an “increasingly bearish macro outlook in the face of a multifront U.S. trade war, residual weakness in Chinese demand and as OPEC+ prepares to begin opening the supply taps next month.”
“Although we could see renewed price support on the back of escalating geopolitical tensions, between the U.S. and Iran in particular, we expect the global oil market to remain oversupplied due to robust growth in non-OPEC production, primarily from the Americas (U.S., Canada, Guyana, Brazil and Argentina),” he added. “However, the cash flow impact of lower oil prices was partially offset by our assumptions of a softening loonie to C$0.70/US$1 in 2026 (from C$0.72/US$1) and tightening Canadian oil differentials as the Trump administration now appears poised to levy a maximum 10% tariff on Canadian energy products, although they may be eligible for relief from a CUSMA trade agreement loophole. We have thus adjusted our 2025–26 WTI–WCS differential to US$12.50/bbl (from US$17.50/ bbl and US$15.00/bbl, respectively). Notably, we have also trimmed our 2025 New York Harbor 3-2-1 crack spread to US$20.00/bbl (from US$22.50/bbl).”
Given the heightened macro and geopolitical uncertainty, Mr. MacCulloch retained “a clear bias toward large-cap equities and the royalty space, which offer superior downside protection.”
“Large-cap producers continued leading the pack, with particularly strong performances from ARX, CNQ, SU and WCP, which delivered cash flow beats exceeding 5 per cent relative to consensus expectations,” he said. “The most notable outperformer in the group was CNQ, which posted a 9-per-cent cash flow beat as oil sands mining production and upgrader utilization from Horizon and AOSP surpassed expectations, due in part to December’s mild temperatures. Meanwhile, SU also delivered another material cash flow beat despite pre-releasing stellar production data in early January, primarily driven by a one-time tax benefit. Notably, cash tax savings also contributed to WCP’s cash flow beat while ARX benefited from lower operating costs and elevated liquids production as Attachie Phase I began ramping operations.”
“Unfortunately, CVE and TOU were notable disappointments in the large-cap space after posting cash flow misses vs expectations. Consistent with recent quarters, CVE’s sluggish performance was primarily attributable to the downstream manufacturing segment, which reported a $400m operating loss due to a confluence of events, including depressed crack spreads, FIFO inventory losses and elevated turnaround expenses, which offset the impact of robust refinery utilization. Meanwhile, a softer liquids production cut and elevated cash taxes were the primary driver of the TOU cash flow miss.”
With his outlook, Mr. MacCulloch lowered these stocks to “hold” recommendations” from “buy” previously.
- Headwater Exploration Inc. (HWX-T) with a $7.25 target, down from $8.25. The average target on the Street is $9.
- MEG Energy Corp. (MEG-T) with a $26.50 target, down from $29. Average: $31.39.
- Nuvista Energy Ltd. (NVA-T) with a $16.25 target, down from $17. Average: $17.39.
- Pine Cliff Energy Ltd. (PNE-T) with a 95-cent target, down from $1.10. Average: $1.04.
- Tourmaline Oil Corp. (TOU-T) with a $74 target, down from $80. Average: $78.89.
- Tamarack Valley Energy Ltd. (TVE-T) with a $5.25 target, down from $6. Average: $5.84.
- Vermilion Energy Inc. (VET-T) with a $14 target, down from $19. Average: $17.05.
Along with the target price adjustments across his coverage universe, Mr. MacCulloch named three new top picks
- Suncor Energy Inc. (SU-T) with a “buy” rating and $65 target, down from $68.50. The average target is $62.95.
- Topaz Energy Corp. (TPZ-T) with a “buy” rating and $29.50 target, down from $32. Average: $31.79.
- Whitecap Resources Inc. (WCP-T) with a “buy” rating and $12 target (unchanged). Average: $13.54.
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National Bank Financial analyst Mike Parkin thinks the main theme stemming from fourth-quarter earnings season across the precious metals industry remains cost control, pointing to the recent increase in input costs affecting many companies.
“Overall, guidance came in relatively light to in line with most of our estimates, with the majority of the misses due to higher unit costs and/or capex intensity vs. our prior estimates,” he added. “We believe, that meeting and/or exceeding guidance in 2025 should prove to be a key focus of the market across our coverage, as a majority of the share price outperformance in 2024 was associated with companies that delivered well to guidance.”
In a research note released Wednesday, Mr. Parkin updated estimates across his coverage universe to incorporate quarterly earnings with the majority of his models also adjusted for guidance and year-end resource and reserve updates. Those changes led to a series of target prices adjustments to stocks.
“Companies with target price changes of 10 per cent or more include: SSR Mining (up 26 per cent), Barrick (up 22 per cent), Alamos Gold (up 21 per cent), Agnico Eagle (up 19 per cent) and Eldorado Gold (up 16 per cent),” he said.
“Our Top Picks remain Kinross Gold (TSX:K, OP, $22.00) in the senior producer space due to the exceptional pipeline of growth projects in the portfolio as well as steady operational performance, and IAMGOLD (TSX:IMG, OP, $13.50) in the Intermediates due to the expected strong FCF and balance sheet deleveraging expected as the Cote mine ramps up to nameplate capacity,” said the analyst. “In our opinion, IAMGOLD is also a potential target if the stock does not re-rate to trade closer to NAV.”
Mr. Parkin’s target changes are:
- Agnico Eagle Mines Ltd. (AEM-T, “outperform”) to $190 from $160. The average on the Street is $154.90, according to LSEG data.
- Alamos Gold Inc. (AGI-T, “outperform”) to $46 from $38. Average: $39.71.
- Barrick Gold Corp. (ABX-T, “sector perform”) to $33 from $27. Average: $23.43.
- Centerra Gold Inc. (CG-T, “outperform”) to $12.50 from $12. Average: $11.24.
- Eldorado Gold Corp. (ELD-T, “outperform”) to $29 from $25. Average: $26.25.
- Equinox Gold Corp. (EQX-T, “outperform”) to $14 from $13. Average: $10.14.
- Newmont Corp. (NGT-T, “sector perform”) to $80 from $75. Average: $84.
- SSR Mining Inc. (SSRM-T, “sector perform”) to $18 from $14.25. Average: $13.60.
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In response to a period of “strong” share price performance, National Bank Financial analyst Vishal Shreehar removed his “top pick” designation from Gildan Activewear Inc. (GIL-T), pointing to “heightened” economic uncertainty but continuing to see multiple drivers for future growth.
“We believe that Gildan has solid longer-term growth prospects; however, given strong share price performance over the last 12 months+, and increasing economic uncertainty, we are removing Gildan from our Top Pick, but maintaining our Outperform rating,” he explained. “Notwithstanding, given that Gildan generates approximately 90 per cent of sales in the U.S., F/X translation to the Canadian stock is helpful, though possible economic weakness related to trade disruption could more than offset. We note that Gildan’s stock price has historically been sensitive to the economic backdrop.”
“We continue to believe that GIL is a solid company; it has many drivers for EPS growth (NBF models 2025 EPS of $3.48, higher by 16.0 per cent year-over-year; consensus is $3.51) including: (i) revenue growth (new capacity, market share growth, product innovation, etc.), (ii) improving costs (input costs, efficiency initiatives, etc.), and (iii) share repurchases.”
Emphasizing the Montreal-based company’s shares have “performed well” recently, Mr. Shreedhar reiterated an $83 target alongside his “outperform” recommendation. The current average is $89.48.
“We highlight that GIL’s shares have delivered a strong return of 88 per cent since 2023, above the TSX 60 Index of 34 per cent over the same period,” he said. “Similarly, it has returned 48 per cent over the last 12 months, versus the TSX 60 Index at 16 per cent.
“Gildan currently trades at 13.3 times out NTM [next 12 month] EPS versus the five-year average of 15.5 times.”
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Following in-line fourth-quarter 2024 results and the reiteration of its fiscal 2025 guidance, RBC Dominion Securities analyst Paul Treiber acknowledged there’s “some uncertainty” related to the potential impact of tariffs on Information Services Corp.’s (ISC-T) business, “particularly those impacting Saskatchewan agriculture/commodities).”
However, he continues to see the Regina-based provider of registry and information management services as “a largely defensive stock, given the stock’s discounted valuation, FCF, and the regulated nature of the company’s business.”
After the bell on Monday, the company reported revenue increased of $62-million, up 8 per cent year-over-year but $1-million lower than the estimates of Mr. Treiber and the Street as organic growth moderated to 8 per cent year-over-year from 12 per cent in the previous quarter. Adjusted EBITDA of $21-million was a decline of 1 per cent from the same period a year ago but meeting expectations, while adjusted earnings per share of 50 cents was a drop of 8 per cent and 2 cents under the analyst’s forecast due to higher taxes and share count.
“ISC reiterated FY25 guidance it provided in late January for $257-267-million revenue and $89-97-million adj. EBITDA,” said Mr. Treiber. “At the mid-point, FY25 guidance calls for 6-per-cent year-over-year organic growth, but with margins down 100 basis points year-over-year. While tariffs are a potential headwind (in particular new tariffs/taxes on Saskatchewan agriculture/commodities like canola or potash), management sees a number of growth tailwinds from lower interest rates, CPI-based fee adjustments, increased due diligence, asset recoveries, and its pipeline of tech solutions projects. Following Q4, our FY25 revenue and adj. EBITDA estimates are largely unchanged.”
Seeing normalized high-value transitions and new investments weighing on near-term profitability, Mr. Treiber maintained a “sector perform” rating and lowered his target to $28 from $30. The average is $33.40.
“While ISC is a defensive stock, our Sector Perform thesis reflects our view that ISC is likely to compound capital at a slower rate than other stocks in our coverage,” he said. “We are rolling forward the basis of our price target from CY25 to CY26 estimates; our revised $28.00 price target is based on 7.4 times CY26 estimate EV/EBITDA (previously 8.4 times CY25 EV/ EBITDA), given the pullback in peer valuation multiples.”
Elsewhere, other analysts making changes include:
* Raymond James’ Stephen Boland to $34 from $36 with an “outperform” rating.
“We believe ISC’s regulated structure affords it a stable long-term growth outlook with an annuity-like free cash flow profile, supported by inorganic expansion through complementary M&A. We also view the current valuation as undemanding, with the stock trading in-line with historical multiples despite a significantly de-risked forward outlook following the MSA extension last year. This view supports our Outperform rating on the stock,” said Mr. Boland.
* CIBC’s Scott Fletcher to $32 from $35 with an “outperformer” recommendation.
“After an in-line quarter and reiterated 2025 guide, our focus is on 2025 expectations. Growth in 2025 is set to decelerate after a strong 2024, and we do see some risks to growth from the impact of trade wars/tariffs on the Saskatchewan economy. With ISC trading in line with its historical multiple, we continue to see upside to shares from a multiple re-rate resulting from ISC’s improved operating profile,” he said.
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Stifel Metals & Mining Research Team’s reorganized their precious and base metals coverage universe following the addition of analyst Ralph Profiti, formerly of Eight Capital.
In a report released Wednesday, the firm resumed coverage of these stocks:
* Aya Gold & Silver Inc. (AYA-T) with a “buy” rating and $22.50 target. Average: $20.75.
Analyst Ingrid Rico: “Through its first mover advantage, Aya has established itself as a growing silver producer with an ongoing expansion at its flagship mine and continues to daylight value through the drill-bit. Aya stands out as the silver-play outside of Mexico and Peru and has positioned itself to unlock further value in Morocco’s highly prospective mineral licences along the South Atlas Fault in Morocco (many of which host past producing mines and historical resources) to which the company is just starting to apply systematic modern techniques for the first time. With Zgounder 2kptd Expansion ramping-up, Aya is poised for a re-rate as it meaningfully increases production to 8Moz Ag/yr in the nearterm (a 5 times increase by 2028 vs 2024) and solidifies its position as a mid-tier silver producer. Its land position in Morocco also provides for a valuable pipeline of organic growth opportunities (currently not priced in).”
* G2 Goldfields Inc. (GTWO-T) with a “buy” rating and $4 target. Average: $3.95.
Analyst Cole McGill: “G2 Goldfield is rapidly defining high-margin ounces on its Oko-Areumu property in Guyana. The combination of high grade, Guyana cost structure and expedited permitting timelines in the country combine to make the gold deposits very valuable assets. As we see it, the multiple gold hits and small-scale workings along trend show just how much exploration upside exists on the property. We also think investors will benefit from the spin-out of Puruni – a secondary property in Guyana ‘hidden gem’ that hosts a historical high-grade mine and oxide resource.”
* K92 Mining Ltd. (KNT-T) with a “buy” rating and $17.50 target. Average: $14.05.
Mr. Profiti: “K92′s pathway to 1.8Mtpa Stage 4 Expansion is forecast to grow GEO production from 150K GEO to more than 400K GEO by 2028 at less than $1000/GEO AISC and puts K92 in elite category of growth-oriented mid-tier gold producers. Exploration catalysts remain strong with up to 11 drill rigs operating at Kora, Kora South, Judd, Judd South and A1 porphyry target, in addition to emerging Mati, Mesoan and Bona Creek vein targets, and porphyry potential at Blue Lake and A1.”
* Montage Gold Corp. (MAU-X) with a “buy” rating an $4.60 target. Average: $3.66.
Mr. McGill: “As we see it, Montage’s Koné project is well on its way to becoming a more than 300koz/yr producer with very attractive economics. This is driven by its top-third ‘strip adjusted grade’ globally paired with a West African cost structure. We expect the stock to re-rate through to the start of production as management rapidly pushes the project forward. The project sits on a massive land package hosting multiple mineralized faults in a greenstone setting, with a full pipeline of excellent high-grade exploration targets that can be quickly advanced and will provide NAV growth as they are pulled into the mine plan. The management team led by Martino De Ciccio has extensive experience in discovery, advancing and building mining assets in Africa and strong capital market expertise.”
* Orla Mining Ltd. (OLA-T) with a “buy” rating and $15.50 target. Average: $10.93.
Ms. Rico: “Following its recent acquisition of the Musslewhite mine, we see OLA reinforcing its strategy of growth as it strengthens its diversified, mid-tier gold miner position with current operations taking the company to a more than 300koz/yr run-rate (vs 137koz in 2024a), supported by well-established production in Canada, and its high-margin Camino Rojo mine in Mexico. With combined cash flow generation, we see Orla showing a clearer path for its next near-term growth development in Nevada, that we project takes OLA to 500koz/yr in 2028e. OLA’s has an enviable list of top shareholders that are supportive of the company’s vision, and importantly, are visible financial backers of the growth strategy, which benefits Orla’s cost capital relative to its mid-tier peers. We see OLA on its way towards multiple expansion reflecting the ‘Canadian mine premium’, setting strong foundations as mid-tier, de-risking of growth pipeline and daylighting exploration upside.”
* Prime Mining Corp. (PRYM-T) with a “buy” rating and $4.50 target. Average: $4.44.
Mr. Profiti: ‘Prime Mining offers investors value creation opportunities at the historic Los Reyes high-grade gold-silver project in Mexico’s Sierra Madre Belt. Gold-silver resource were significantly expanded in Oct-2024 with an initial underground resource, including total Los Reyes resources of 3.0Moz AuEq, including Measured & Indicated AuEq resources of 2.19Moz (underground + open-pit) and 0.82Moz in Inferred resources (underground + open-pit). Most of the resource material at Los Reyes (89 per cent) remains suitable for processing in a milling circuit with good recoveries. As a result of extensive metallurgical testing work, gold recoveries for mill-suitable ore are 95.6 per cent, with the remaining lower-grade material to be processed via heap leaching. We believe near-pit exploration targets and potential additions of underground resources along with technical engineering and de-risking work towards delivering a Preliminary Economic Assessment (PEA) to demonstrate the quality of the Los Reyes Project will provide a significant re-rating catalyst.”
* Silver Tiger Metals Inc. (SLVR-X) with a “buy” rating and 70-cent target. Average: 97 cents.
Mr. McGill: “We believe Silver Tiger has found the next major high grade silver vein system in Mexico. As the company continues to drill along strike from the historically high grade (40 oz/t) El Tigre mine, we anticipate they will continue to encounter continuous, high grade silver veins and find ‘sweet spots’ in the mineralized shale horizon. The style of mineralization on the property also includes broad zones of ‘halo’ mineralization around the veins into the host rock, setting the deposit up well for future larger scale open pit extraction. The company is also defining and expanding the high grade Black Shale horizon and deeper sulphide zone. The company has produced an updated mineral resource estimate of global resource base of 283 Moz AgEq.”
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In other analyst actions:
* Following the release of its fourth-quarter 2024 financial results, Canaccord Genuity’s Carey MacRury raised his Aris Mining Corp. (ARIS-T) target to $12.50 from $10.50 with a “buy” rating. The average is $11.46.
“Our BUY rating is based on Aris potentially more than doubling its gold production by the end of 2026 through brownfield expansions that are permitted and funded, and coupled with an inexpensive valuation,” he said. “Beyond that, the Soto Norte project provides further growth potential, in our view (a PFS for Soto Norte is expected mid-2025). Aris is trading at 0.14 times NAV vs. junior producer peers at 0.63 times and Aris remains one of our best ideas for 2025 among junior producers.”
* National Bank’s Don Demarco increased his K92 Mining Inc. (KNT-T) target by $1 to $12.75 with a “sector perform” rating. The average on the Street is $14.05.
“The quarter highlights positive FCF while fully-funded Stage 3 expansion continues on-time and on-budget,” he said.
* National Bank’s Mohamed Sidibé trimmed his Lithium Argentina AG (LAR-N, LAR-T) target to US$3.50 from US$3.75 with a “sector perform” rating, while Scotia Capital’s Ben Isaacson trimmed his target to US$3.50 from US$4 with a “sector outperform” rating. The average is US$5.11.
“Ultimately, we view the 2024 results and commentary provided by LAR as positive for the overall long-term growth profile and profitability of the company,” Mr. Sidibé said. “We have now obtained more clarity on costs and pricing in 2025 and as Cauchari-Olaroz turns FCF positive in our model in 2026, we see a re-rating opportunity for the stock.”
“Our Sector Perform rating is predicated on the risk around potential cost escalation during the ramp-up and the lack of consistent positive CF generation. As we continue to obtain more disclosure on costs, asset economics and visibility on impurities as the asset reaches commercial production, we see opportunities for LAR to re-rate towards established producer peers.”
* Raymond James’ Brian MacArthur trimmed his Lithium Royalty Corp. (LIRC-T) target to $9 from $9.50 with an “outperform” rating. The average is $8.63.
“We believe royalty companies like LIRC offer equity investors diversified exposure to commodity prices while mitigating downside risk given limited exposure to operating and capital costs. At the same time, upside optionality exists through exploration and asset expansion potential. The large projected growth in lithium demand to supply EVs and energy storage is likely to require substantial new lithium supply and numerous lithium companies exist with potential projects. LIRC’s royalty portfolio is focused on lithium assets with lower jurisdictional risk, higher grade (and therefore lower costs), longer duration, and backed by some strong operators.”
* Morgan Stanley’s Alex Straton cut her Lululemon Athletica Inc. (LULU-Q) target to US$411 from US$420 with a “buy” rating. The average is US$401.91.
* Stifel’s Ian Gillies hiked his Neo Performance Materials Inc. (NEO-T) target to $16.50 from $15 with a “buy” rating. The average is $12.75.
“Neo delivered a fourth consecutive consensus EBITDA beat and ended the year with EBITDA exceeding its guidance by 12 per cent. We believe the operating environment is improving with recovering commodity prices and end market demand. This leads us to believe NEO is well positioned to beat its 2025E EBITDA guidance of $57.5-million, all else being equal. Additionally, the company’s near-term catalyst of a strategic review conclusion should help to drive share price higher. We are hoping,” said Mr. Gillies.
* CIBC’s Cosmos Chiu raised his Orla Mining Ltd. (OLA-T) target to a Street high of $13.75 from $11.50 with an “outperformer” rating, while Desjardins Securities’ Allison Carson bumped her target to $13 from $12 with a “buy” rating.. The average is $10.93.
* Paradigm Capital’s Daniel Rosenberg bumped his Sabio Holdings Inc. (SBIO-X) target to $1.50 from $1.25 with a “buy” rating. The average is $1.33.
“Sabio reported positive Q4 results that were at the top end of preliminary guidance. The company’s positioning in political and advocacy spending was a benefit and investment in international markets is showing early signs of success. Sabio is achieving profitability targets and seeing strong operating momentum into 2025. Management expects double-digit growth to continue in 2025,” he said.
* ATB Capital Markets’ Frederico Gomes moved his target for Calgary-based SNDL Inc. (SNDL-Q) to US$4 from US$3.50 with an “outperform” rating. The average is US$3.50.
“SNDL reported Q4/24 results highlighted by consistent operational progress (reaching positive FCF for the year) and decisive capital return to shareholders via buybacks,” said Mr. Gomes. “We remain particularly constructive on Canadian cannabis retail as the market is consolidating, providing tailwinds for large players such as SNDL. We expect the segment to grow profitably through new store additions (organic or inorganic) and moderate SSSG (up 6 per cent in Q4). In cannabis operations, SNDL reported revenue growth of 42 per cent year-over-year, with gross margin of 27 per cent and adj. operating income margin of 12 per cent. The segment, once a large cash burner, has gained scale and stabilized following operating efficiency measures, with further synergies (and growth) to be realized as Indiva is integrated. International could also be a key growth driver over the following years, with potential M&A opportunities ahead. Liquor retail is facing headwinds (SSS decline of 4 per cent) due to market conditions; however, the segment remains profitable due to the introduction of data licensing and private label programs, and other initiatives. The negative highlight of the quarter was the $65.7-million negative valuation adjustment on SunStream; while understandable given deteriorating U.S. cannabis market conditions, investors continue to view the value of U.S. investments as uncertain amid ongoing restructurings. SNDL’s valuation is attractive; we estimate the value of net cash and investments is approximately US$1.80/share, which indicates that little to no value being attributed to the operating segments. As a Nasdaq-listed, debt-free operator with exposure across the supply chain in Canada and the US, we think SNDL offers a unique opportunity for cannabis investors; the stock is one of our top picks.”
* Raymond James’ Steve Hansen cut his Titanium Transportation Group Inc. (TTNM-T) target to $3.25 from $4 with a “strong buy” rating. The average is $3.65.
“We are trimming our target price on Titanium Transportation Group Inc. ... based upon persistent macro uncertainty (tariff talk, GDP) across the transportation landscape & TTNM’s corresponding decision to withhold 2025 guidance,” he said. “Despite these near-term concerns, we have elected to maintain our Strong Buy rating based upon: 1) TTNM’s resilient operating performance through the cycle; 2) the emergence of encouraging macro signals (⇑ spot rates, capacity rightsizing); and 3) the company’s compelling valuation (4.5 times FY25 EBITDA, 0.8 times Price/Book).”