Inside the Market’s roundup of some of today’s key analyst actions
National Bank Financial analyst Gabriel Dechaine thought IA Financial Corp. Inc. (IAG-T) delivered “another exceptional quarter” and now expects it to reveal a higher return on equity target, likely falling in the 17-18-per-cent range, at its Investor Day event next Monday.
After the bell on Tuesday, the Quebec City-based lifeco reported fourth-quarter underlying earnings per share of $3.04, exceeding both Mr. Dechaine’s estimate of $2.84 and the consensus forecast on the Steeet of $2.80. He attributed the beat to positive contributions from experience gains, investment income, lower strain and a lower tax rate. IAG’s full-year core ROE came in at 15.9 per cent, which is consistent with its current 15-per-cent-plus target, while quarterly annualized ROE topped that goal at 16.9 per cent.
“41-per-cent pre-tax income growth from the Canadian insurance segment was impressive,” said the analyst. “However, it also reflected a turnaround from prior year conditions: 1) $15-million of experience gains mainly in the P&C segment due to favourable weather conditions; and 2) a 50-per-cent year-over-year decline in new business strain (i.e., which was a negative surprise in the Group business last year). Combined, these items contributed two-thirds of this segment’s growth.”
“Pro forma deployable capital sits at $1.4-billion. This figure was up from $1-billion at Q3/24, pro forma a $700-million boost from a regulatory change, a $400-million sub debt redemption and the Global Warranty acquisition. Internal capital generation of $635-million was in line with the 2024 target. We note that IAG repurchased 0.6 million shares during Q4/24 and has 4 million of remaining capacity under its NCIB.”
After increasing his estimates to reflect lower strain and higher investment income, Mr. Dechaine raised his target for its shares to $141 from $133, keeping an “outperform” rating. The average target on the Street is $141.13, according to LSEG data.
“We are also increasing our equally weighted target P/B multiple to 1.7 times (from 1.6 times) and P/E multiple to 10.5 times (from 10 times),” he said. “These changes reflect greater confidence in IAG’s growth and ROE outlooks.”
Elsewhere, TD Cowen’s Mario Mendonca moved his target to $146 from $143 with a “buy” rating.
“Core EPS was well above estimates, supported by strong results in Canada and WM, offset by weaker results in the U.S. and higher corporate expenses. Top-line momentum (including U.S. dealer services) remains strong across the company, growth in high ROE WM business, and excess capital support a meaningful increase in ROE guidance (February 2025 investor day). Earnings quality was disappointing,” said Mr. Mendonca.
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While National Bank Financial analyst Dan Payne continues to see Paramount Resources Ltd. (POU-T) remaining “an absolute outlier in the space for the quality and quantum of value potential, with strong momentum to high-impact growth to be captured through the outlook,” he downgraded his recommendation for its shares to “sector perform” from “outperform” previously, citing “its prevailing valuation (4.5 times 2026 estimates vs. peers 3.3 times) and timing towards execution of growth (weighted to Q4/25, relative to near-term rationalization of assets.”
“While we have pivoted to neutral on timing and valuation, we acknowledge that its portfolio’s depth and ability to manifest value outperformance therein (through execution and crystallization of investments) remains unrivaled, and investors with a long-time horizon will not be disappointed,” said Mr. Payne following the close its previously announced $3.3-billion asset sale and $2.2-billion ($15 per share) special distribution.”
In a note released before the bell, the analyst touted the significance of the Calgary-based company’s value creation and also noted the “depth of opportunity remains evident.”
“Pro-forma the recent asset sale, it sits with $1-billion in cash & investments plus production of 30 mboe/d [thousand barrels of oil equivalent per day] (46-per-cent liquids) largely anchored within Central Alberta and the Kaybob Duvernay, and with expectations for a stout capital program to deliver meaningful growth through Q4/25 and beyond,” he said.
“As previously distilled, the company projects a $775-milion 2025 capital program (at the mid-point) to drive 50-per-cent production growth to exit at 45 mboe/d, and which comes within the context of a 230-per-cent payout ratio at strip with cash trending towards $300-400-million at year-end under our estimates. Similarly, within our estimates, we forecast a comparable 2026 budget, which provides for 30-per-cent annualized growth to 60 mboe/d (50-per-cent liquids) within the context of a 130-per-cent payout ratio and cash of less than $100-million. Ultimately a well-funded outlook to support the value expansion trajectory over the long term.”
Mr. Payne cut his target for Paramount shares to $25 from $40 following the distribution, “which is based on a 6.0 times 2026 estimate target price multiple (and compares to peers at 5.0 times generally on 2025 estimates), the premium of which is attributed to its funded high-impact growth prospects and underlying option value.” The average is $30.61.
Elsewhere, others making changes include:
* Scotia’s Cameron Bean to $31 from $46 with a “sector outperform” rating.
“Looking ahead, we expect POU to allocate its more than $1.0-billion post dividend cash and investment surplus toward growing its Duvernay asset and advancing its suite of earlier stage opportunities,” said Mr. Bean. “We continue to believe POU is very well positioned to deliver top tier growth and comfortably manage commodity and market volatility.”
* CIBC’s Jamie Kubik to $24.50 from $39.50 with an “outperformer” rating.
* ATB Capital Markets’ Patrick O’Rourke to $23 from $36 with an “outperform” rating.
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Following a “strong” fourth-quarter earnings beat, National Bank Financial analyst Maxim Sytchev thinks RB Global Inc. (RBA-N, RBA-T) proves the “snowball effect of focus on operational excellence drives compounding earnings.”
“Quarterly results were once again much stronger than expected; the 2025E guide for GTV [gross transaction value] was in line, especially in light of a still relatively sluggish construction backdrop,” he said. “Operating leverage really drove decrementals this quarter (up 280 basis points). While we are being asked if this level is sustainable, we have to keep in mind that IAA was starved for capital/leadership for a number of years; having direction, technology support, alignment of incentives (and of course a supportive market, as demonstrated by a rising total loss ratio of 230 basis points year-over-year) would suggest that the runway is still there (hence investors should view the CapEx increase as confidence in winning market share). With a much cleaner balance sheet there is also incremental upside via M&A (for example, the ag space seems to be relatively interesting from a cycle perspective).
“All in, we like the counter-cyclical nature of the equipment piece (in fact, tariffs could be a net positive if sellers need to transact and there is inflation for new gear) and acyclical structure of salvage.”
On Tuesday after the bell, the Westchester, Ill.-based company reported quarterly revenue of US$1.142-billion, topping Mr. Sytchev’s US$1.040-billion estimate and the Street’s $1.059-billion forecast. Adjusted earnings per share of 95 US cents also came in ahead of expectations (80 US cents and 79 US cents, respectively) as consolidated GTV rose 2 per cent year-over-year and exceeded the consensus projection by 6 per cent.
“Strategic post-acquisition review is paying off handsomely,” the analyst said. “The ongoing focus on improving and maintaining outstanding SLA [service level agreement] metrics while continuing to expand the depth and breadth (and thus liquidity) of the company’s platforms should drive further market share gains in both the legacy heavy equipment and the Automotive business. Despite the impressive growth, SG&A was actually down 4 per cent year-over-year amid the focus on optimizing operations. As a result, leverage continues to drop, and management is content with the current 1.6 times level and is open to M&A to scale the business further (we don’t expect anything transformational but within the company’s cash balance).
“Impressive performance in both key verticals. Heavy equipment fleet owners remain somewhat cautious (regarding disposition activity) given persistently higher rates and inflation, though a 18-per-cent year-over-year increase in lot volumes suggests RBA’s market share and overall performance in their legacy vertical continues to improve; the ability to pass on higher buyer fees along with a 15-per-cent year-over-year jump in marketplace services revenues reinforces this further. The company is currently working through the remainder of the Yellow fleet, though management expected Q1/25E GTV to be down mid-single digits year-over-year on tougher comps. On the salvage auto side, total loss rates saw another 230-basis points year-over-year increase to 23.8 per cent in the quarter as vehicles become increasingly complex and structural upward pressure on repair costs is persistent. Management notes that clients were satisfied with the company’s performance during the quarter’s CAT event aftermath (CAT events drove most of the 7-per-cent year-over-year volume growth). ASPs were only down 1 per cent to 2 per cent year-over-year, helped by incremental market share wins and a growing proportion of international buyers (flywheel effect of improved liquidity).”
Believing the company can “maintain momentum in relation to service revenue take rate and ability to hold the line on costs,” Mr. Sytchev raised his forecast for both 2025 and 2026, leading him to increase his target for RB Global shares to US$118 from US$113, maintaining an “outperform” recommendation. The average is US$103.70.
“We modeled a 5-per-cent year-over-year decline in GTV for Q1/25E given tough comps of volume growth for the CC&T sector, but overall assume 2-per-cent GTV growth in 2025 and 3 per cent in 2026, well within the company’s guide which is likely conservative,” he said.
Elsewhere, other changes include:
* Raymond James’ Steve Hansen to US$118 from US$110 with an “outperform” rating.
“We are increasing our target price on RB Global ... and reiterating our Outperform rating based upon: 1) another strong quarterly beat demonstrating the company’s solid operating momentum/leverage; 2) better-than-expected 2025 guidance; and 3) upward commensurate revisions to our financial forecast,” he said.
* RBC’s Sabahat Khan to US$116 from US$107 with an “outperform” rating.
“RB Global reported another strong quarter, which we expect will be well-received by investors,” he said. “Looking ahead, the midpoint of the 2025 Adjusted EBITDA guide was above consensus, and we view this as a conservative starting point for the year given the strength in the underlying business (noting Q1/25 is likely to reflect the softest year-over-year metrics).”
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RBC Dominion Securities analyst Walter Spracklin said Cargojet Inc. (CJT-T) “remains in (very) high growth mode” following Tuesday’s release of better-than-expected fourth-quarter 2024 financial results that included a “significant” 30-per-cent increase in core revenue in its seasonally strongest period.
“More importantly, strong domestic eCommerce-driven growth is being complemented by new international opportunities, which suggests demand remains robust (despite a weak macro) and CJT has been able to realign its fleet to accommodate the growth,” he added. “Furthermore, with new contracts in hand, CJT is adding three new aircraft to accommodate additional high-quality growth coming on in 2025; accordingly, we are maintaining our street-high estimates for 2025/26. Reiterate CJT as our top idea in Transportation.”
Cargojet could benefit from looming tariff threat by seizing on new supply routes, co-CEOs say
The Mississauga-based company reported EBITDA for the quarter of $92-million, exceeding both Mr. Spracklin’s $89-milion estimate and the Street’s expectation of $90-million. Revenue came in at $293-million also topping projections ($285-million and $273-mlilion, respectively).
“The key highlight is the very high level of revenue growth, with Domestic, ACMI and Charter (’core’) coming in at up 30 per cent year-over-year, in its seasonally strongest quarter,” said Mr. Spracklin. “Margins did take a step down as volume surged; however, CJT expects this margin pressure to abate in 2025.”
“At a core growth rate in the quarter of 30 per cent, it’s hard not to be impressed with this growth when compared to peers and the weak macro environment. Further, this level of growth tells us: 1) next-day eCommerce in Canada has not yet normalized, and is still structurally growing at a rapid pace; 2) to achieve 30-per-cent growth when a large customer is on strike demonstrates the benefit of its array of revenue channels; 3) CJT can successfully reallocate routes to accommodate new (international) growth avenues without significantly changing its fleet size; and 4) the 2025 outlook suggests growth on top of the strong 2024 year ... While there may be some hand-wringing about lower FCF, we flag that a company growing more than 16 per cent in 2024 (despite challenging freight environment) and still having not been able to accommodate the demand, demonstrates in our view CJT is in rapid growth mode and as a result, FCF generation will follow the alignment of the fleet once the strong growth has been capitalized on.”
Maintaining street-high estimates and seeing valuation poised to inflect, Mr. Spracklin raised his target for Cargojet shares to $193 from $189 with an “outperform” rating. The average is $159.18.
“Trading at 6.5 times our 2025 estimated EBITDA, the shares continue to trade at an unwarranted (in our view) discount on every measure: relative to history (range 6.3 times to 16.4 times), to trucking (TFI at 9.0 times and AND at 10.9 times); and to rail (CN at 12.2 times and CP at 15.2 times),” he said. “CJT represents an exceptional investment opportunity— the best in our coverage universe in our view — and we continue to rate it as our top idea.”
Elsewhere, others making target adjustments include:
* National Bank’s Cameron Doerksen to $147 from $151 with an “outperform” rating
“Although Cargojet wilL face some cost headwinds and a heavier year of capex in 2025, the outlook for growth remains constructive supported by continued growth from the contract signed last year supporting e-commerce volumes between China and Canada, new ACMI opportunities and greater flexibility to pursue ad hoc charter business,” Mr. Doerksen said. “The current valuation of 6.6 times EV/EBITDA based on our updated 2025 forecast also looks attractive, especially when compared to the historical forward average for the stock of 10.9 times. We continue to value the stock by applying an 8.0 times EV/EBITDA multiple to our 2026 forecast. Our EBITDA forecast moves higher, but this is offset by the higher expected capex spend, the net result of which is that our target is reduced.”
* Scotia’s Konark Gupta to $165 from $170 with a “sector outperform” rating.
“CJT ended 2024 on a solid note, not only achieving a milestone of $1.0-billion revenue but also growing cargo revenue and EBITDA by 16 per cent and 10 per cent, respectively, when the freight sector was struggling. Further, its domestic business grew in Q4 despite a month-long labour strike at Canada Post. While management is wary of indirect effects of potential U.S. tariffs, it is also quite confident about continued solid growth in 2025, driven by existing contracts and visible opportunities. However, we expect FCF to feel some pressure this year given near-term growth opportunities require additional aircraft, while there are no planned asset sales unlike 2024. We are not concerned about FCF decline as the leverage ratio remains well within CJT’s target, supporting continued share buybacks. Following a significant pullback in the share price since the end of October 2024, CJT is now attractively trading at just 7.1 times EV/EBITDA on our 2025E, below the pre-pandemic trough of 7.5 times,” said Mr. Gupta.
* CIBC’s Kevin Chiang to $163 from $177 with an “outperformer” rating.
“CJT reported good Q4 results and provided a positive outlook for 2025,” he said. “That said, the shares were down over 4 per cent at one point [Tuesday] morning. The feedback we have heard is that it relates primarily to the increase in CJT’s fleet this year and the added capex associated with this. Given CJT continues to see demand for its services outstrip its available capacity, we believe investing in its fleet is a sound strategy. In addition, we view CJT as well-insulated from potential tariff risks.”
* Canaccord Genuity’s Matthew Lee to $173 from $165 with a “buy” rating.
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Desjardins Securities analyst Brent Stadler thinks the recent selling of Capital Power Corp. (CPX-T) in the frenzy surrounding the emergence of China’s DeepSeek artificial intelligence model has created an attractive entry point for investors “ahead of material catalysts.”
“Further, we believe gas tailwinds should remain strong and, with 50 per cent of its installed capacity in the U.S., CPX’s valuation is highly attractive vs U.S. IPPs.,” he said. “On this theme, we believe U.S. recontracting will be accretive to NAV and estimates; we also highlight that 50 per cent of CPX’s assets are benefiting from the current environment and remind investors of this U.S. tailwind.”
In a note preview the company’s March 26 quarterly results, Mr. Stadler reinforced his positive outlook on gas, and he touted “a number of near-term catalysts on deck that should prove out the value of CPX’s portfolio as well as create incremental value for shareholders.’”
Potential material near-term catalysts. (1) US asset recontracting, which should unlock value inherent in the U.S. portfolio over the near term; (2) accretive U.S. gas M&A, all cashed up to transact; and (3) potential data centre announcement in Alberta and/or the U.S.,” he said.
“We believe investors should be taking advantage of recent weakness and acquiring the shares ahead of these catalysts.”
The analyst did cut his fourth-quarter EBITDA estimate to $352-milion from $383-million, falling below consensus of $358-million, to refectr Alberta power market data and “conservatively trimming some other segments.”
“It is likely that CPX’s headline 4Q EBITDA has some non-recurring impacts from the VDP program, which we will add back when comparing against our estimate,” he noted.
With that change, Mr. Stadler lowered his target for Capital Power shares by $1 to $68, keeping a “buy” rating. The average is $63.42.
“CPX remains a favoured way to play the energy transition,” he concluded.
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In other analyst actions:
* CIBC’s Ty Collin initiated coverage of North West Company Inc. (NWC-T) with an “outperformer” rating and $59 target, exceeding the average on the Street by 33 cents.
“North West is uniquely positioned, in our view, to benefit from an unprecedented flow of settlement money into First Nations communities, which we expect will provide a significant earnings lift through at least F2027 and possibly beyond. Despite a strong run last year, shares are trading at an average valuation and do not appear to reflect potentially significant growth tailwinds and stronger profitability. With highly resilient performance, strong profitability, and a long runway of elevated earnings growth in prospect, we believe NWC stacks up favourably against other Staples names and should increasingly have appeal for a wider institutional audience,” he said.
* Following the late Tuesday’s announcement of an agreement to purchase a 70-per-cent stake in David Evans Enterprises Inc., a Portland, Oregon-based engineering and staff augmentation services firm, CIBC’s Krista Friesen raised her AtkinsRéalis Group Inc. (ATRL-T) target to $92 from $88 with an “outperformer” rating. Other changes include: Stifel’s Ian Gillies to $102 from $98 with a “buy” rating and Raymond James’ Frederic Bastien to $100 from $98 with an “outperform” rating.. The average is $88.54.
“We are positively inclined by the acquisition because the company has purchased a high-quality medium-sized firm that will augment its service offering positively, while supporting the company’s EBITDA margin goals. Moreover, this business is well functioning, which will increase the likelihood of success as it pertains to integration which we view favourably. In our view, management has done what they said they would,” said Mr. Gillies.
* In response to its better-than-anticipated quarterly results as well as 2025 guidance and updated three-year production outlook, National Bank’s Don DeMarco raised his Dundee Precious Metals Inc. (DPM-T) target to $20.25 from $19.75 with an “outperform” rating. The average is $19.23.
“A production dip in 2027 is expected but already priced into shares. Overall focus is on maintaining a strong mid-tier operation with low costs and FCF for shareholders. Growth strategy depends on asset performance, Serbian discoveries, Loma Larga progress and M&A,” said Mr. DeMarco.
* Desjardins Securities’ Frederic Tremblay lowered his Foraco International SA (FAR-T) target to $4 from $4.25 with a “buy” rating. The average is $4.26.
“We view the post-4Q share price reaction (down 17 per cent) as deeply exaggerated given the much smaller size of the revenue miss (4 per cent below consensus), an EBITDA beat when adjusting for one-off items, and confidence that the business can return to top-line growth during 2025 as it is solidly positioned for new wins and an upcoming market recovery,” he said. “At 2.4 times our 2026 EBITDA, FAR’s valuation is around its three-year trough and at a deep discount to peers. We view the risk-reward proposition as attractive at current levels.”
* Scotia’s Ovais Habib bumped his Lundin Gold Inc. (LUG-T) target to $32.50 from $31.50 with a “sector perform” rating. The average is $38.13.
* TD Cowen’s Steven Green raised his SSR Mining Inc. (SSRM-T) target to $13 from $11 with a “hold” rating. The average is $12.57.
“SSR beat our production expectations in Q4 largely due to strong grades at Seabee, where grades have historically been quite volatile. There is no change to the outlook at Copler. We have increased our near term estimates moderately, and increased our target price,” he said.