Inside the Market’s roundup of some of today’s key analyst actions
While Canadian Tire Corp.’s (CTC.A-T) fourth-quarter 2024 financial results came in below the Street’s expectations, National Bank Financial analyst Vishal Shreedhar emphasized “transient headwinds” hurt the retailer, and he now sees “green shoots visible” with the trends for current quarter “encouraging.”
“CTC noted that Q4/24 started slow (unseasonable weather for the first 2 months, Black Friday shift, Canada Post strike, etc.),” he said. “CTC estimated the strike impacted CTR sssg [same-store sales growth] by more than 100 basis poiints, in addition to extra costs. December was strong and CTC indicated optimism on its Q1/25 QTD trends. We view this to suggest that CTC remains on track for solid EPS growth in 2025, although we acknowledge heightened macro-economic uncertainty.
“CTC will provide an update on its strategy on March 6, 2025. We also expect an update on CTC’s view on tariffs in May 2025. CTC sources 15 per cent of its goods directly from the U.S. and believes the company can transition 25-30 per cent of U.S. products to Canadian suppliers if needed. Corporate inventory declined 5 per cent year-over-year, and dealer inventory declined 4 per cent year-over-year. CTC indicated dealers are replenishing and that spring/summer dealer inventory is viewed to be healthy. We view this to be constructive for CTC.”
On Thursday, Canadian Tire shares plummeted 7.8 per cent following the premarket release, which included revenue of $4.507-billion that fell short of both Mr. Shreedhar’s $4.617-billion estimate and the Street’s projection of $4.593-billion as same-store sales growth lagged at Mark’s, SportChek and its flagship stores. Adjusted EBITDA was $605-million, also missing forecasts ($664-million and $614-milion, respectively).
“Q4/24 results were soft (vs. NBF), with a miss on adj. EBITDA and EPS mainly due to weaker sales and gross margin rate,” the analyst said. “We calculate that an increase in ECL reduced EPS by $0.14, albeit offset by a low effective tax rate of 24 per cent vs. NBF at 26 per cent.”
After reducing his 2025 and 2026 earnings per share projections to $14.43 and $16.15, respectively, from $15.08 and $17.02 “reflecting a more challenging backdrop (lower sales and margin) vs. our prior expectations, among other factors,” Mr. Shreedhar lowered his target for Canadian Tires shares to $170 from $176 based on an advancement in his valuation period. The average target on the Street is $159.55, according to LSEG data.
Elsewhere, other analysts making target changes include:
* TD Cowen’s Brian Morrison to $176 from $182 with a “buy” rating.
“The Q4/24 results were modestly below our forecast/consensus. There were many positive takeaways within its Retail segment/financial position, that are encouraging for its midterm earnings profile. This supports our positive thesis, but this has to be balanced by the U.S. threat of tariffs and the potential impact upon the state of the Canadian consumer, that may slow the cadence of EPS recovery,” he said.
* Scotia’s John Zamparo to $135 from $140 with a “sector underperform” rating.
“The impact from potential tariffs is difficult to estimate but cannot be ignored; management’s level of concern emphasized that on [Thursday’s] call,” said Mr. Zamparo. “The greatest risk remains softer consumer spending, possibly materially, and particularly on discretionary items. Other potential consequences include elevated write-off rates, a costlier USD weighing on GM% (albeit mostly in 2026) as costs may not be passed on to dealers, and potential disruption from retaliatory tariffs, as 15 per cent of SKUs are imported from the U.S. It’s difficult to imagine what level of clarity management can provide at the forthcoming strategy update in March given the macro picture. All this could be a false alarm, but having conviction in that is a bridge too far for us at the moment. We’ve reduced our F25 and F26 EPS estimates by 3 per cent.”
* Canaccord Genuity’s Luke Hannan to $158 from $160 with a “hold” rating.
“There were signs of optimism within Canadian Tire’s Q4/24 results, though not enough to provoke us to change our stance on the stock,” said Mr. Hannan. “The still-challenging macroeconomic environment, coupled with the potential second-order impact of tariffs, suggests to us that the growth outlook for the company in the near term isn’t sufficiently compelling. We acknowledge that Canadian Tire’s scale, first-party customer data and analytics capabilities give it levers to pull when it comes to managing assortment architecture and, by extension, merchandise margins, though there remains risk that margins are nonetheless negatively impacted because of the company’s commitment to prioritizing value for consumers. We’ll wait to see the details in the March 6 strategy update, but for now, we’re comfortable maintaining our HOLD rating.”
* CIBC’s Mark Petrie to $156 from $165 with a “neutral” rating.
“Q4 results were short of our and Street expectations. Though it is fair to say that weather and other idiosyncrasies were damaging to consumer sentiment and spending, 2025 isn’t shaping up to be any easier. CTC is as well-positioned to react to tariffs as any retailer with global sourcing, but it will clearly be hurt by a weaker economy or job market. Our 2025 estimates fall, though a 53rd week largely offsets the non-recurring items in 2024. We also boost our Holdco discount to 10 per cent (from 8 per cent),” he said.
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National Bank Financial analyst Giuliano Thornhill thinks Northwest Healthcare Properties REIT’s (NWH.UN-T) private placement offering of $500-million in senior unsecured debentures may mark a “turning point” for the Toronto-based operator of healthcare real estate.
That led him to raise his recommendation to “outperform” from “sector perform” previously, seeing its return profile “more asymmetric” than elsewhere in his coverage universe.
“Since entering strategic review on Aug. 8 2023, 5-year yields in Canada have declined by 100 basis points while spreads have retreated to new lows,” he said. “Thanks to this more accommodative environment, [Thursday’s] announcement is a material de-risking and fortunate event. We estimate high-costing/floating/convertible debt as a share of total could decline from 30 per cent to 10-15 per cent over the near term. Over the last 12 months, conversations concerning NWH have been dominated by its leverage. The issuance today nearly retracts this discussion point, allowing investors to focus on business fundamentals.”
Mr. Thornhill also emphasized the lingering uncertainty brought on by the planned retirement of chief executive Craig Mitchell in the middle of this year provides an enticing entry point for investors.
“Since entering strategic review, NWH units have returned negative 26 per cent vs. the S&P REIT Index at negative 1 per cent,” he noted. “We associate this underperformance to interest rate uncertainty related to its balance sheet, a necessary distribution cut, and senior management turnover. With the removal of two of these factors, the announcement of a permanent CEO alongside a clear strategic vision may lead units to rebound from its floor.”
“NWH offers retail-like growth (approximately 3 per cent) for office-like expectations. The declining prospect within sectors elsewhere, alongside a general risk-off environment, bodes well for NWH going forward. NWH is likely the most sensitive to these trends given its long-dated leasing profile and substantial ex. Canada asset base may lead to outperformance if economic conditions deteriorate.”
After raising his 2025 and 2026 funds from operations per unit projections by almost 6 per cent, Mr. Thornhill increased his target for Northwest units to $5.50 from $5.20. The average on the Street is $5.65.
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Following in-line fourth-quarter 2024 financial results and 2025 guidance that was “slightly stronger than expected and certainly the best among the Big 3,” RBC Dominion Securities analyst Drew McReynolds thinks Telus Corp. (T-T) is “ticking the key boxes that support a premium valuation,” calling it a “structural leader.”
“With TELUS outperforming large cap peers in 2024, the company’s premium valuation has notably widened (FTM [forward 12-month] EV/EBITDA of 8.2 times versus 6.1 times for Rogers and 7.1 times for BCE), suggesting that valuation risk has risen on the stock, particularly in the low revenue growth environment.
“While given this premium valuation we see limited potential for multiple expansion in 2025, we believe TELUS as the structural leader within the group can maintain a premium valuation provided that certain boxes are ticked through 2025– 27, including: (i) sustaining 4-5-per-cent or higher adjusted EBITDA growth for TTech systematically realizing cost efficiencies; (ii) continuing to make progress toward management’s 10-per-cent consolidated capex intensity objective (well below 16-19 per cent for large cap peers); (iii) turning the DRIP off post-mmWave auction in 2025/2026; (iv) reducing leverage into the low-3-times range while pausing on major M&A; (v) renewing the annual dividend growth commitment for 2026-28, albeit at a likely lower rate (estimated up 5 per cent) versus the current 7-10 per cent; and (vi) ultimately instituting an NCIB to absorb excess FCF given the structural decline in capex.”
While “acknowledging a degree of uncertainty with respect to telecom pricing and market expansion in 2025,” Mr. McReynolds said Telus’ management expects “(i) ongoing increases in product intensity and multi-product penetration across its existing subscriber base, renewed SMB revenue growth (up 6 per cent year-over-year in Q4/24), double-digit growth in high-margin IoT revenues and other new B2B revenues (including private network) to somewhat immunize TELUS from these potential broader industry headwinds; and (ii) renewed sales booking.”
“The more formal commitment to medium-term objectives improves visibility and should underpin the premium valuation,” he added. “We commend management for formalizing medium-term objectives, including: (i) achieving 10-per-cent consolidated capex intensity (versus 14 per cent in 2023, 13 per cent in 2024 and 12 per cent in 2025 including real estate development initiatives); (ii) removing the DRIP in 2027 preceded by a dialing back of the DRIP in 2026 by potentially 50 per cent (with management expecting the dividend payout ratio to return to the current 60-75-per-cent target range post-DRIP); and (iii) establishing a leverage target of approximately 3x by 2027 (versus 3.9x in 2024) with the de-levering trajectory supported by industryleading EBITDA and FCF growth and asset monetization that includes $3-billion in excess real estate and $500-million in net copper sales arising from copper-decommissioning (24 central offices closed by the end of 2024 with another 10-15 expected in 2025), TELUS Health crystallization (partners, IPO), non-core asset divestitures (with some occurring in 2025), and infrastructure crystallization if and where it makes sense with more emphasis on towers versus fiber (for the moment). In addition, management reiterated its commitment to annual dividend growth as a way to return excess capital to shareholders with details on the 2026-2028 annual dividend growth program being provided with Q1/25 results in May.”
Raising his 2025 and 2026 revenue and earnings expectations, Mr. McReynolds bumped his target for Telus shares to $25 from $24, reiterating an “outperform” rating. The average target is $22.79.
Elsewhere, other changes include:
* TD Cowen’s Vince Valentini to $25 from $24 with a “buy” rating.
“TELUS delivered reasonable results in Q4/24 and better-than-expected guidance for 2025. Longer-term targets (2027) were encouraging regarding asset monetization (especially real estate and healthcare), capex (still targeting 10-per-cent intensity), 3 times debt leverage, removal of the DRIP, and dividend coverage,” he said.
“With a dividend yield near 7.5 per cent (typical spreads versus GoC bond yields would suggest 6 per cent being more reasonable), industry-leading EBITDA growth, industry-leading FTTH deployment, and less uncertainty than BCE/Rogers regarding capital allocation and funding, we continue to believe that T shares offer the most attractive risk versus reward in the sector, owing to less volatility and less downside event risk. However, T shares already trade at a premium valuation, and it is difficult to model a meaningful upside scenario (such as 25 per cent or better) unless one assumes that industry pricing and/or volume growth conditions improve to the point where Canadian telco multiples expand back closer to where they were two years ago. In this type of scenario, we believe the upside potential could be much higher for names that trade at lower valuations, such as Rogers (and Quebecor, but the dividend yield, market cap, and liquidity for QBR.B are not in the same category as TELUS, in our view). However, until Rogers clarifies its debt reduction and sports asset funding plans, we believe clipping the dividend and modest capital upside potential at TELUS is the safer and better route for investors.”
* Scotia’s Mager Yaghi to $23.50 from $22.50 with a “sector outperform” rating.
“After a few quarters of declining trends in wireline service revenue growth, TELUS showed a material improvement in Q4 as pricing pressures which affected results last year seem to have been lapped and product intensity has taken over again,” said Mr. Yaghi. “We are encouraged to see this improvement entering 2025. In wireless, competitive intensity is still high and while we have seen some signs of improved pricing, the sector is still at risk of slipping if any of the players decide to up the ante on handset subsidies or reduce rate plans. We will be watching how competitors behave in the coming weeks. Deleveraging remains a priority for TELUS in 2025/2026 in addition to potential asset sales to accelerate the return to 3.0 times leverage by the end of 2027, which we see as an achievable objective. We have slightly tweaked our estimates, slightly raising our target price.”
* JP Morgan’s Sebastiano Petti to $23 from $22 with a “neutral” rating.
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In a research note released Friday titled Not much sizzle, but still a decent amount of steak here, RBC Dominion Securities analyst Keith Mackey reaffirmed his “constructive” stance on shares of Precision Drilling Corp. (PD-T) falling in-line quarter results, citing “leading market share in a strong Canadian drilling market, pathway to organic de-leveraging, and increasing shareholder returns, though we see limited near-term catalysts for the shares given a flat U.S. rig market.”
However, he reduced his 2025 EBITDA forecast by 9 per cent and his 2026 projection by 8 per cent, seeing its Canadian operations “holding steady” but its U.S. business “could be better.”
“In the first quarter, we expect PD to average about 75 working rigs [in Canada], up 2 year-over-year,” said Mr. Mackey. “On the call PD guided rig margins to $14,500-15,000/day (down 5.7 per cent year-over-year) on reactivation costs and rig mix. Notably, Precision retains a 31-per-cent market share in the WCSB, including 48 per cent in the Montney and 42 per cent in key heavy oil regions. We see PD generating $341-million gross margin in FY25 with 67 active rigs, versus $340-million in FY24 with 65 active rigs.”
“PD is operating 30 rigs in the U.S. with about 4 on standby, and we expect this to decline slightly through 2025. PD has lower high-spec rig utilization than peers, partially due to its exposure to natural gas basins. Tuck-in deals and strategic upgrades could both help the company make inroads in the Permian as we await higher natural gas activity. PD also recently changed its U.S. sales leadership, as noted on the call. We see PD generating US$101-million gross margin in FY25 with 32 active rigs, versus US$137-milion in FY24 with 36 active rigs.”
With his forecast reduction, the analyst dropped his target for Precision shares to $110 from $121, maintaining an “outperform” rating. The average is $122.03.
“Our price target is based on applying a rounded 4.5 times (unchanged) multiple to our modestly revised 2026 estimated EBITDA,” said Mr. Mackey. “We see room for multiple expansion from current levels as PD’s balance sheet improves, U.S. visibility increases, and its Internationally diversified business provides growth optionality.
Elsewhere, others making changes include:
* Raymond James’ Michael Barth to $141 from $146 with a “strong buy” rating.
“PD’s U.S. active rig count and day margins are trending lower than we expected, while the Canadian business continues to fire on all cylinders, with potential margin inflation driven by a tight rig market that could materialize later this year. Despite revising our estimates modestly lower, we still have PD trading at a 22-per-cent free cash flow yield on 2025/2026 estimates. This is at the same time shareholder returns move higher. On our math PD can easily max out an NCIB, institute a modest dividend and continue to repay debt. These free cash flow yields strike us as too punitive, and we reaffirm our Strong Buy rating,” he said.
* TD Cowen’s Aaron MacNeil to $89 from $100 with a “hold” rating.
“We are reducing our 2025 and 2026 EBITDA estimates to reflect a lower U.S. outlook, partially offset by slight increases to our Canadian forecast and lower-than-expected stock-based compensation guidance. In this context, our target decreases to $89 ($100 previously) that balances our reduced estimates with a reduction to our WACC calculation,” he said.
* CIBC’s Jamie Kubik to $115 from $125 with an “outperformer” rating.
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Citing “valuation, leverage, and pace of debt reduction expected at strip pricing,” ATB Capital Markets analyst Amir Arif lowered his recommendation for Vermilion Energy Inc. (VET-T) to “sector perform” from “outperform” previously.
“While the $1.1-billion Westbrick Deep Basin acquisition improved the Company’s depth and quality of its Deep Basin inventory, the acquisition multiple of 3.9 times NOI with all debt financing results in a higher corporate valuation, higher leverage, and reduced exposure to European gas pricing,” he said. “The valuation and European gas price exposure were two key attractions on the name and while European gas exposure remains at a material 15 per cent of production and 31 per cent of strip revenue, the valuation, leverage, and pace of debt reduction expected make the name relatively less attractive; hence the downgrade to Sector Perform. “Additionally, we are reinstating our estimates as we were previously restricted due to the Company’s recent notes offering. As a result of the debt financing details, our 2025 CFPS [cash flow per share] is modestly reduced from $7.31 to $7.23 to reflect minor changes to interest expense outlook. Pre and post the acquisition, valuation has increased from 2.3 times to 3.0 times 2025 strip EV/DACF, leverage has increased from 0.4 times to 1.5 times YE2025 net debt/strip CF. We are estimating excess strip FCF after dividends of $296-million which will reduce leverage from 1.7 times at the time of the acquisition to 1.5 times by YE25. The Company does plan on some non-core asset sales to help further de-lever the balance sheet.”
Mr. Arif reiterated a $17.50 target, which is 4 cents higher than the current average on the Street.
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UBS analyst Jill Shea made a series of target changes for Canadian bank stocks on Friday:
- Bank of Montreal (BMO-T, “neutral”) to $146 from $150. The average is $144.86.
- Canadian Imperial Bank of Commerce (CM-T, “neutral”) to $96 from $102. Average: $95.74.
- National Bank of Canada (NA-T, “buy”) to $145 from $150. Average: $141.
- Royal Bank of Canada (RY-T, “buy”) to $192 from $200. Average: $177.76.
- Toronto-Dominion Bank (TD-T, “neutral”) to $90 from $83. Average: $86.37.
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In other analyst actions:
* CIBC’s Robert Catellier upgraded Keyera Corp. (KEY-T) to “outperformer” from “neutral” with a $48 target, rising from $46 and above the $46.04 average on the Street. Elsewhere, ATB Capital Markets’ Nate Heywood raised his target to $46 from $44 with a “sector perform” rating.
“The company delivered solid results and formally sanctioned the KFS II debottlenecking project, while also sticking to the original project timeline of H1/25 for Zone 4 and KFS 3,” said Mr. Catellier. “If there is a risk, it is the possibility of potential tariffs on Canadian energy projects causing customers to hesitate in committing to new infrastructure; however, recent contracting activity provides us comfort in that regard. Volumes are remarkably strong in many areas, despite some shut-in in the South Region. We are bumping our DCF-based price target to $48 (was $46) and upgrading our rating.”
* CIBC’s Dean Wilkinson increased his Brookfield Corp. (BN-N, BN-T) target to US$74 from US$70 with an “outperformer” rating, while TD Cowen’s Cherilyn Radbourne raised her target to $77 from $75 with a “buy” rating.
“Q4/24 DE before realizations was a record $0.94 and total DE of $1.01 was a big beat vs. the Street/us, partly due to a one-time land sale,” said Ms. Radbourne. “We expect earnings growth to accelerate at BN/BAM in 2025+, based on a more favourable market backdrop/company-specific factors. BN’s share-price still offers substantial upside optionality with respect to its unlisted assets/carried interest, in our view.”. The average is $66.71.
* CIBC’s Scott Fletcher cut his Calian Group Ltd. (CGY-T) target to $62 from $63, keeping an “outperformer” rating. The average is $70.71.
“Calian is navigating a challenging operating environment given the political uncertainty on both sides of the border. With the quarter, Calian pulled back on segmented commentary, focusing discussion on its defence business, to which all four segments contribute. The long-term defence opportunity is compelling if Canada ramps up military spending to hit 2% of GDP, but we do see some near-term risks to estimates,” he said.
* National Bank’s Giuliano Thornhill bumped his Choice Properties REIT (CHP.UN-T) target to $15.50 from $15.15 with a “sector perform” rating, while Desjardins Securities’ Lorne Kalmar cut his target to $15 from $15.50 with a “buy” rating. The average is $15.56.
“Overall, CHP’s Q4 results highlighted the strength of its existing portfolio and surpassed our expectations,” said Mr. Thornhill. “With leverage of 7.0 times and on a downward trajectory, CHP is squarely in a position to be opportunistic during 2025. [Loblaw] continues to grow its footprint across the country, focussing its small format No Frills and Shoppers expansion, leaving CHP as a beneficiary as it assists in these strategic initiatives. Against a backdrop of tariff headlines and other macro risks, CHP’s lower risk profile and more certain outlook marks it as a safe haven investment for investors.”
* TD Cowen’s Mario Mendonca hiked his Definity Financial Corp. (DFY-T) target to a Street high of $71 from $60 with a “hold” rating. The average is $60.40.
“DFY reported Q4/24 positive operating EPS of $0.95, up 10 per cent, reflecting 11-per-cent growth in underwriting income and 3 per cent in investment income,” said Mr. Mendonca. “Results were better than our estimate ($0.87; consensus $0.89), reflecting lower CAT losses. DFY raised the quarterly dividend by 17 per cent, slightly better than our forecast. We raised our target price to explicitly reflect a 50-per-cent probability DFY is acquired in 2026.”
* CIBC’s Cosmos Chiu raised his Dundee Precious Metals Inc. (DPM-T) target to $18 from $17 with a “neutral” rating. The average is $18.93.
* CIBC’s Scott Fletcher reduced his Dye & Durham Ltd. (DND-T) target to $25 from $30 with an “outperformer” rating. The average is $23.77.
“DND’s FQ2 met previously released guidance, with $121-million of revenue and 6-per-cent organic growth at the lower end of the $120-$125-million and 6-10-per-cent guidance ranges,” he said.. “Organic growth in the quarter was supported by strength in Canadian practice management and financial services. Interim Board chair Hans Gieskes was reluctant to provide much in the way of forward-looking targets, but is encouraged by what he has seen so far. It’s been a challenging start to the year for DND investors, with the stock under pressure from share sales from the outgoing CEO and a lack of detail on new strategic plans. Despite the rough start, we remain optimistic on DND’s upside and still believe that the business is significantly undervalued. A permanent CEO is the likely next catalyst, and we see a pressing need to have a more concrete strategic plan in place in order to navigate an improving housing market, a key upcoming renewal cycle, and a potential non-core asset divestiture that could meaningfully reduce leverage. We retain our Outperfomer rating and reduce our price target from $30 to $25, as the uncertainty around future share dispositions from the ex-CEO sales limits near-term upside.
* National Bank’s Matt Kornack moved his target for units of Killam Apartment REIT (KMP.UN-T) to $21.75 from $21.50 with an “outperform” rating. Other changes include: Raymond James’ Brad Sturges to $21.50 from $22.25 with a “strong buy” rating and Desjardins Securities’ Kyle Stanley to $21 from $22 with a “buy” rating. The average is $21.88.
“KMP’s Q4 print saw sustained operating performance, notwithstanding some noise from temporary vacancies and lease-up,” said Mr. Kornack. “While leasing spread figures decelerated slightly, they are still significantly ahead of historical averages, and we expect this may be the best print in the apartment space again on this metric as Atlantic Canada continues to hold up well. To that end, KMP’s 2025 target for SPNOI of 4-7-per-cent growth (5-6 per cent on revenues vs. 6 per cent in 2024) speaks to visibility into reasonably strong market performance in the face of moderating fundamentals. On capital recycling, KMP is targeting $100-150-million in 2025 dispositions, which should high-grade the portfolio, with proceeds likely to be used for purchases under the NCIB.”
* CIBC’s Anita Soni raised her target for Kinross Gold Corp. (KGC-N, K-T) to US$14, exceeding the US$13.13 average, from US$13 with an “outperformer” rating.
* RBC’s Walter Spracklin moved his Mullen Group Ltd. (MTL-T) target to $16 from $17 with an “outperform” rating. Other changes include: Raymond James’ Michael Barth to $17.50 from $18.50 with a “market perform” rating and Scotia’s Konark Gupta to $17 from $19 with a “sector outperform” rating. The average is $18.40.
“While Q4 results were negatively impacted by a weak S&I segment, we continue to flag: 1) 2024 results were quite resilient despite a negative trucking backdrop, and that resiliency is expected to continue going forward; 2) valuation off 2025 earnings are very attractive (absolute and relative); 3) 2025 valuation does not include acquisitions; and 4) 2025 likely represents trough earnings levels,” said Mr. Spracklin. “Accordingly, we see current valuations as highly attractive, and see Mullen as well positioned to drive solid growth when the freight cycle inflects.”
* National Bank’s Maxim Sytchev increased his target for Russel Metals Inc. (RUS-T) to $58 from $55 with an “outperform” recommendation. Other changes include: Stifel’s Ian Gillies to $60 from $55.50 with a “buy” rating and RBC’s James McGarragle to $50 from $51 with an “outperform” recommendation. The average is $54.
“Russel continues to execute on its strategy admirably, closing out a significant year of two material acquisitions while continuing to invest in facility modernization and adding exposure to value-added capabilities and non-ferrous metals,” said Mr. Sytchev. “Despite the above outlays and the opportunistic repurchase of another 330k shares in the quarter, the company remained in a net cash position of $32-million. We have written extensively about these dynamics – including in our latest marketing with management – so none of these developments should come as a surprise. The incremental development in recent weeks, however, is the inflection of HRC prices back into the high US$700/st range amid accelerated talks of U.S. tariffs. As such, the “call option” on higher HRC now appears to be paying off. Given a strong record of execution and capital allocation, we believe RUS is well positioned to benefit from the current macro dynamic despite an elevated degree of uncertainty.
* CIBC’s Paul Holden reduced his target for Sun Life Financial Inc. (SLF-T) to $95 from $97, exceeding the $89.75 average, with an “outperformer” rating. Other changes include: Scotia’s Meny Grauman to $94 from $98 with a “sector outperform” rating and Desjardins Securities’ Doug Young to $90 from $95 with a “buy” rating.
“Underlying EPS was $1.68 vs our estimate of $1.80 and consensus of $1.77,” said Mr. Young. “Relative to our estimates, SLC beat, MFS, Asia and corporate were in line, while Canada and the U.S. missed. A tough quarter for sure, especially at its U.S. medical stop loss business which drove the vast majority of the miss; however, we believe the stock pullback is overdone. We lowered our estimates and target price.”
* National Bank’s Adam Shine, currently the lone analyst covering Yellow Pages Ltd. (Y-T), moved his target to $11 from $10.50 with a “sector perform” rating.
“Top-line challenges continue amid secular pressures. The decline in 4Q marked further sequential progress post-3Q23, with this period getting some help, despite higher churn, from a deceleration of the customer count decline rate due to an increase in new customer acquisitions,” said Mr. Shine.
* RBC’s Sabahat Khan increased his Waste Connections Inc. (WCN-N, WCN-T) target to US$211 from US$202 with an “outperform” rating. Other changes include: ATB Capital Markets’ Chris Murray to $285 from $260 with a “sector perform” rating and CIBC’s Kevin Chiang to US$215 from US$212 with an “outperformer” rating. The average is US$201.68.
“Waste Connections reported Q4 Adj. EBITDA/EPS modestly below Street forecasts, while 2025 guide was in line,” said Mr. Khan. “Looking ahead, 2025 should reflect good top-line progression and underlying margin expansion, with future M&A offering upside to our base case.”
* TD Cowen’s Michael Tupholme bumped his WSP Global Inc. (WSP-T) target to $305 from $300 with a “buy” rating. The average is $282.43.
“We are encouraged by the 2025 guidance and the new three-year (2025–2027) strategic plan unveiled by WSP in connection with yesterday’s Investor Day, as well as its ambitious long-term goal of becoming a leading brand in the professional services space. Overall, we came away from the event with an incrementally positive view of the company and its prospects,” said Mr, Tupholme.