A survey of North American equities heading in both directions
On the rise
WSP Global (WSP-T) closed up 3.7 per cent after saying it’s focusing on growth over the next three years as it comes off a spate of acquisitions.
In its 2025-2027 strategic plan released Wednesday evening, the firm’s chief executive Alexandre L’Heureux said it expects to exceed its previous financial targets and sees its revenues rising by 40 per cent.
WSP has been eyeing larger acquisitions since last summer, after working to integrate its sprawling operations as it snapped up smaller companies over the preceding two years.
In October, it completed its acquisition of Power Engineers Inc., an Idaho-based consulting firm with a focus on energy and 4,000 employees across the continent.
Following a spate of takeovers, WSP worked last year to scrap digital barriers between offices scattered across 60 countries.
At least three-quarters of the firm now operates on a single software platform — known as an enterprise resource planning system — reducing inefficiencies that emerged as 15 more companies came under the WSP umbrella between 2022 and mid-2024.
The buying streak included four smaller consulting firms last year that added more than 800 employees to its headcount, which now stands at about 73,000, according to the company.
Mr. L’Heureux has said he sees opportunities for growth in continental Europe, Australia and the United States.
In a research note, National Bank analyst Maxim Sytchev said: “Bottom line — looks on point; long-term margin potential to get to 22.5-per-cent EBITDA margin (vs. 18.0 per cent TTM [trailing 12 months]) and 2 times in terms of size looks attractive, enabling further compounding. .... While the meat of how we are going to get to the above-presented financial objectives will be discussed in much more detail tomorrow (we would mention so far the following buckets: targeting high growth areas such as digital, energy transition, water, advanced manufacturing, project management, advisory, mining & metals, reducing turnover rate by -150 bps, drive EBITDA margin improvements by +30 bps - +50 bps, invest $200-milion in R&D, capitalize on key geographies where the company has a material presence, double the number of clients who generate more than $100-million in top line/annum, a 10-per-cent reduction in project margin erosion per annum, fully leverage the new ERP by 2027E and invest $100-million in additional systems and tools), tonight’s targets are exactly in the ballpark of what we were hoping for when it comes to 2025E through 2027E (we believe the same would be the case for investors) while long-term objectives are even more ambitious than we would have hoped for. WSP can confidently look into the future, building on its four industry-leading pillars — Environment, Transportation, Buildings and Power. The company’s consulting-only business model also make the name attractive in these tariff-uncertain times. With material U.S. exposure at 42 per cent of sales and an estimated 3-per-cent market share (in the U.S.), we believe WSP has many years of consolidation left ahead.”
Telus Corp. (T-T) saw gains of 3.5 per cent after it reported its fourth-quarter profit and revenue rose compared with a year ago.
The company says its net income attributable to common shares totalled $358-million or 24 cents per share for the quarter ended Dec. 31.
The result compared with a profit of $288-million or 20 cents per share in the last three months of 2023.
Operating revenue and other income totalled $5.38-billion for the quarter, up from $5.20-billion a year earlier.
On an adjusted basis, Telus says it earned 25 cents per share in its latest quarter, up from an adjusted profit of 24 cents per share a year ago.
Analysts on average had expected an adjusted profit of 22 cents per share, according to LSEG Data & Analytics.
TD Cowen analyst Mario Mendonca said: “2025 guidance was better than expected, and management signals DRIP removal and about 3 times debt leverage in 2027. Especially given uncertainty clouding peers, we expect TELUS to be up 5-per-cent-plus on this print.”
“We believe the encouraging outlook commentary, plus Q4 beats on headline adjusted EBITDA and EPS, should offset a few negatives in the Q4 detail. Namely: 1) mobile ARPU [average revenue per user] down 3.6 per cent year-over-year was worse than expected and worse than Q3, and this drove negative wireless service revenue growth; 2) elevated cash outflows for restructuring, handset subsidies, and working capital led to a slight miss in FCF in Q4, despite beats on EBITDA and capex; 3) other income revenue (includes real estate and copper asset sale gains, and provision reversals for prior acquisitions) in TTech was $52-million in Q4 versus our estimate of $5-million, so the slight TTech EBITDA beat could have been a slight miss without these lumpy items; and 4) pessimists might claim that TTech revenue was inflated by strong growth for Healthcare (up 10 per cent year-over-year) and Agriculture (up 16 per cent year-over-year), which masks weaker underlying telecom revenue trends (albeit fixed data revenue was good). We disagree and we applaud these much criticized non-telecom segments showing better momentum, which we believe keeps the probability high for a favourable monetization event for Healthcare within 12 months”
Brookfield Corp. (BN-T) increased 2.3 per cent after it reported a net income attributable to shareholders of US$432-million for its fourth quarter, down from US$699-million a year earlier.
The company says its profit amounted to 25 US cents per diluted share for the quarter ended Dec. 31, down from 42 US cents per diluted share a year earlier.
Revenue for the quarter totalled US$19.43-billion, down from US$24.52-billion a year earlier.
Brookfield says its distributable earnings for the quarter amounted to US$1.61-billion or US$1.01 per share, up from US$1.31-billion or 83 US cents per share in the last three months of 2023.
Distributable earnings before realizations totalled US$1.50-billion or 94 US cents per share for the quarter, up from US$1.21-billion or 76 US cents per share a year earlier.
The company also raised its quarterly dividend to 9 US cents per share, up from 8 US cents per share.
Nutrien Inc. (NTR-T) increased 0.9 per cent after its Brazilian unit said it will sell its fertilizer blending plants in the country, according to a statement sent to Reuters on Thursday.
The Saskatoon-based company said it decided to discontinue its fertilizer blending operations in Brazil in 2024, adding that the sale process of these units is a natural step toward what it called “a global business optimization strategy.”
Nutrien has five fertilizer blenders in Brazil.
In March of 2024, Reuters reported that Nutrien, the world’s largest producer of potash fertilizer, was mulling divestments in South America, replacing management and halting an acquisition spree in Brazil after steep losses in the region.
Brazil Journal, a local news outlet, on Thursday reported Nutrien had hired a financial adviser to sell its five blending facilities in Brazil, citing sources familiar with the plans.
Quebec City-based miner Robex Resources Inc. (RBX-X) rose 2.6 per cent after announcing it has signed a new agreement with Mali to operate its Nampala mine, located around 300 kilometres south of the capital Bamako.
The company has been operating the mine since 2017 but the new mining code of Africa’s second biggest gold producer compels international companies to pay higher taxes and hand over bigger stakes in assets to the state.
In a sign of unease over the new legislation, Robex said in September it was looking to sell its Nampala mine but it had not received any reasonable offer.
A statement by Mali’s Council of Ministers released late on Wednesday said the company was planning to produce 1.4 tons of gold per year for a period of 8 years.
“Geological research carried out by the company has identified a deposit with mineral reserves estimated at 17,351,000 tons with a gold content of 0.70 grams per ton,” it said.
The statement said the government and the company had signed a memorandum of understanding in September that allowed Mali to increase its shareholding in the project, entitling the state to priority dividends.
Keyera Corp. (KEY-T) rose 0.9 per cent after reporting better-than-anticipated fourth-quarter results before the bell and reiterated its three-year fee-based EBITDA growth outlook.
The Calgary-based company said quarterly EBITDA came in at $313-million, down from $339-million during the same period a year ago but exceeding the Street’s expectation of $288-million. All three operating segments contributed the beat.
“One new ‘25 headwind emerged,” said Citi analyst Spiro Dounis. “Specifically, the unexpected AEF [Alberta EnviroFuels] outage (a hit of $40-million) likely limits ‘25 Marketing upside - consistent with ‘24 outage impact. While formal Marketing guidance is a May event, mgmt still expects to achieve the base Marketing guidance of $310-350-million. KEY formally sanctioned the 8 kbpd KFS II debottleneck and pointed to a Frac III FID in 2025 as well. Both projects are largely expected by investors and incorporated into the ‘25 capex budget.”
“Implications — The reaction could skew slightly negative, but KEY’s stock performance has been under pressure and there are some offsetting factors. But for the $40-million headwind from the AEF outage, we would have expected a positive reaction to the beat and KFS II FID (anticipated but there was a chance it slipped). KFS III was not expected to be sanctioned and Zone 4 likely can’t proceed without more progress upstream of the pipeline. We’d expect downside to be limited though; KEY is the lowest performing stock under coverage year-to-date – thus we suspect expectations are low.”
Molson Coors (TAP-N) beat fourth-quarter sales and profit estimates, helped by recovering demand for its beer brands including Coors Light and Miller Lite in the Americas.
Shares of the company were up 9.6 per cent in Thursday trading.
The company saw sales recover in certain regions, as consumers continued to lean on their favorite beers after cutting back on expensive wines and spirits.
Net sales in its Americas segment were down 2.6 per cent in quarter ended December 31, after falling 11 per cent in the third quarter.
The improvement in sales in the Americas, a biggest revenue generating region, was driven by a consecutive rise in brand volumes in Canada.
Molson Coors, similar to its peer Constellation Brands (STZ-N), has been ramping up prices to counter lingering input costs such as raw materials.
That, along with Molson Coors’ efforts to lower its marketing expenses, helped it in posting underlying earnings per share of US$1.30, compared with analysts’ estimates of US$1.13 per share, as per data compiled by LSEG.
Its quarterly net sales came in at US$2.74-billion, compared with analysts’ estimates of US$2.70-billion.
The company expects annual net sales to be up in low single-digit, compared with analysts’ estimate of a 0.55-per-cent decline.
The company said that its outlook does not reflect impacts of any trade policy activities or tariffs by the U.S. and potential retaliatory actions by other countries.
Robinhood (HOOD-Q) shares surged 14.1 per cent on Thursday, after the trading platform reported record fourth-quarter revenue and profit on the back of a resurgence in retail trading due to renewed interest in crypto and equity markets.
Retail trading rebounded significantly in 2024 as Bitcoin and U.S. stocks hit all-time highs, driven by optimism over easing regulatory hurdles for digital assets and expectations of a soft landing for the economy.
The Menlo Park, California-based company blew past Wall Street expectations for quarterly earnings, with transaction-based revenue more than tripling.
“The year of 2024 was a near-perfect environment for retail trading,” analysts at J.P. Morgan said, adding that Robinhood’s expense discipline and introduction of new products are translating into higher profits.
Long dominated by high-profile names such as Vanguard, Charles Schwab and Fidelity Investments, the U.S. brokerage industry was disrupted when Robinhood pioneered commission-free trading in 2013.
A decade on, Robinhood is expanding to cater to more seasoned investors and capture market share from industry incumbents.
Animal spirits took over the crypto sector in November after Donald Trump secured a second term in the White House.
His pledge to make the U.S. the “crypto capital of the universe” and his pro-industry stance propelled Bitcoin past US$100,000 for the first time, igniting a broad rally across the market.
“Trading volumes in equities, options and crypto surged in the fourth quarter, which is a sign that retail traders have confidence in all risk markets across the board,” said Paul Marino, Chief Revenue Officer at Themes ETFs.
Robinhood’s transaction-based revenue from crypto trading surged over 700 per cent in the fourth quarter to US$358-million.
Cisco Systems (CSCO-Q) shares rose 2.1 per cent on Thursday after the company raised its annual revenue forecast on robust demand for its cloud networking gear, while addressing any potential impact from the latest U.S. tariffs.
Demand for the telecom equipment maker’s ethernet switches and routers used in data centers has surged as companies ramp up their investments in artificial-intelligence infrastructure.
Despite macro uncertainty, Cisco is seeing strong cloud demand including triple-digit order growth from hyperscalers and improving demand from telco customers to equip their networks for AI-led traffic demand, said J.P.Morgan analysts led by Samik Chatterjee.
U.S. businesses have warned of the fallout from the tariffs President Donald Trump has imposed on Canada, Mexico and China, as well as on steel and aluminum. Levies on Canada and Mexico have been paused for a month, but not on China.
Chief Financial Officer Scott Herren said on a conference call that the company’s adjusted gross margin forecast for the third quarter has the cost of the proposed tariffs built into it.
“We would expect the majority of the reason for the slightly weaker gross margin outlook for Q3 is due to expected tariff impact in the near term,” said Morgan Stanley analysts.
At least six analysts have raised their price targets on the stock, according to data compiled by LSEG.
Cisco has a 12-month forward price-to-earnings ratio of 16.23, compared with Arista Networks (ANET-N) 43.21. Cisco has gained over 17 per cent in 2024, while ANET has risen more than 87 per cent in the same period.
On the decline
Canadian Tire Corp. Ltd. (CTC-A-T) fell 7.8 per cent despite saying it is observing “economic green shoots” as consumer sentiment improves and retail sales grew in the fourth quarter. But shoppers are still putting the brakes on purchases they do not have to make, dampening demand in stores.
The Toronto-based retailer reported on Thursday that it returned to comparable sales growth in its fourth quarter for the first time this fiscal year, driven by a bump in shopping during the December holiday period.
Comparable sales – an important metric that tracks sales growth not tied to new store openings – rose by 1.1 per cent in the fourth quarter ended Dec. 28, 2024, compared to the same period the prior year. However, the company missed analysts’ expectations for quarterly revenue.
“In the quarter, we charted strong earnings and a return to growth, while observing economic green shoots like improved consumer sentiment and spending,” president and chief executive officer Greg Hicks wrote in a press release on Thursday.
While retail sales grew, the company noted that consumer demand still remained weaker than usual. Members of Canadian Tire’s loyalty program, looking for savings, also redeemed more Canadian Tire Money in the quarter – $360-million worth, for an increase of 7 per cent compared to the same period the prior year.
The flagship Canadian Tire stores still saw consumers pulling back on discretionary spending – with sales in those categories falling by 5 per cent – while growth came from automotive services and other essential categories.
At SportChek, comparable sales rose by 0.4 per cent, helped by demand for hockey equipment, hydration products and casual footwear.
Marks reported demand across categories, including for its industrial apparel, driving comparable sales growth of 1.8 per cent.
Canadian Tire’s total revenue grew by 1.5 per cent in the quarter, to $4.5-billion. That fell below analysts’ expectations of $4.58-billion, according to the consensus estimate from S&P Capital IQ.
Net income attributable to shareholders jumped to $411.5-million in the fourth quarter, compared to $172.5-million in the same period the prior year. Those results included a $197.4-million gain in the quarter on the sale of its distribution centre in Brampton, Ont. Adjusting for this and other items, normalized net income attributable to shareholders grew to $227.3-million or $4.07 in normalized diluted earnings per share, compared to $188.4-million or $3.38 per share in the prior year.
For the full year, consolidated revenue fell by 1.8 per cent to $16.4-billion. Normalized net income attributable to shareholders grew to $703.5-million or $12.62 in normalized diluted earnings per share in 2024, compared to $585.3-million or $10.37 per share in 2023.
The company also noted that as of the end of the quarter, it fully repaid $895-million in borrowings it used to buy back a minority stake in its financial services division from Bank of Nova Scotia in 2023.
- Susan Krashinsky Robertson
Sun Life Financial (SLF-T) shares plummeted 7.3 per cent on Thursday after the Canadian insurer reported quarterly profit below analysts’ estimates and warned its U.S. business could face challenges in 2025.
The company said its U.S. business faced industry-related difficulties, resulting in higher claims related to cancer treatment or other severe conditions in its medical stop-loss business.
Reaction from the Street: Thursday's analyst upgrades and downgrades
The medical stop-loss insurance protects employers from large claims that may exceed a set limit.
“What we saw was about the same number of claims that we would normally see, but we had a few really high claims,” CEO Kevin Strain said in an interview.
“It could be coming out of COVID and the public health emergency where people weren’t doing as many checkups as normal, and the conditions got more severe.”
Mr. Strain said Sun Life would boost insurance prices in the range of about a 2-per-cent increase to combat the higher number and severity of incoming claims.
Executives told analysts they expect some financial impact on insurance claims could persist for a longer period.
The U.S. business, which contributes one-fifth of Sun Life’s earnings, recorded a 39-per-cent decline in underlying net income in the fourth quarter.
Mr. Strain said he was optimistic about the U.S. business and sees opportunities to grow as its dental business, which it built through the acquisition of DentaQuest for $2.5 -illion in 2022, is primarily related to kids, an area the Trump administration has not targeted in the sweep of recent regulatory changes.
Sun Life, Canada’s second-largest life insurer, earned $1.68 per share, falling short of the average estimate of $1.78 per share, according to data compiled by LSEG.
“One quarter certainly does not make a trend, but weaker results out of the U.S. in particular will feed into concerns,” Scotiabank analyst Meny Grauman said in a note.
The earnings miss is the second for Sun Life in fiscal 2024, which was marked by a challenging time for its dental business in the United States.
Imperial Oil (IMO-T) dipped 1 per cent after it said on Thursday that CEO Brad Corson will retire, with John Whelan, currently ExxonMobil Canada’s upstream senior vice president, taking his place on May 8.
Imperial Oil is majority-owned by Exxon (XOM-N).
Mr. Corson was appointed CEO of Imperial Oil in 2020 but started his career with Exxon in 1983 in Louisiana and rose to become vice president of Exxon’s global upstream acquisition and divestment programs.
Whelan also began his career with Exxon in 1988 in Alberta and for a while was Imperial’s senior vice president of upstream operations.
Deere’s (DE-N) quarterly revenue slumped 30 per cent and missed analysts’ expectations as more farmers switched to renting agricultural equipment due to weak incomes and high borrowing costs, sending its shares down 2.2 per cent.
Farm income has dropped 23 per cent from 2022 in one of the biggest declines in history, according to the USDA. High borrowing costs amid the Federal Reserve’s cautious pace of interest-rate cuts, and persistent inflation have prompted dealers to scale back inventory restocking.
President Donald Trump’s latest tariff announcements have further increased uncertainty regarding the impact on U.S. farmers.
Soybeans, corn, wheat, and meat are particularly vulnerable to retaliatory tariffs from China, Canada, and Mexico.
Mr. Trump’s tariffs have sparked fears of a trade war, threatening higher costs for manufacturers with significant operations in those countries.
The tariffs on Mexico and Canada have since been temporarily paused for 30 days.
Meanwhile, industrial metal prices, crucial for manufacturing equipment, are rising, driven by Mr. Trump’s 25-per-cent tariffs on steel and aluminum amid insufficient domestic production.
The world’s largest farm-equipment maker reiterated its full-year profit forecast to be in the range of US$5-billion to US$5.5-billion.
Analysts had considered Deere’s earlier profit forecast conservative and anticipated potential revisions as the year progressed.
Deere now expects sales in its largest production and precision agriculture segment, which includes larger tractors and combines, to fall between 15 per cent and 20 per cent, compared to its previous forecast of a 15-per-cent decline.
However, its outlook does not account for any impact from potential import tariffs by the U.S. and any retaliatory actions taken by other countries.
Deere reported a net income of US$869-million, or US$3.19 per share, compared with US$1.75-billion, or US$6.23 per share, a year earlier.
First-quarter worldwide net sales and revenue decreased 30 per cent to US$8.51-billion.
Reddit (RDDT-N) shares tumbled 5.3 per cent on Thursday after the social media firm missed expectations for daily active unique visitors, hit by a change in Google’s search algorithm.
The algorithm change impacted how frequently the platform popped up in Google search results.
The user growth issues caused by the algorithm change might keep Reddit’s stock under pressure in the near term, Morgan Stanley analysts said.
Reddit experienced some volatility with Google search in the fourth quarter, triggered by a periodic algorithm change, but traffic from the search has recovered in the first quarter, CEO Steve Huffman said in a letter to shareholders.
“It sounds to us an aberration,” Piper Sandler analysts said.
Daily active unique visitors rose 39% to 101.7 million in the fourth quarter for Reddit, but missed analysts’ average estimate of 103.3 million, according to data compiled by LSEG. The growth has also slowed sequentially.
Despite the hiccup, Reddit’s fourth-quarter revenue beat estimates and the company forecast an upbeat first-quarter revenue.
Reddit has been reaping the rewards of the artificial-intelligence content licensing deals with Alphabet’s Google and Microsoft-backed OpenAI.
At least six brokerages raised the price target for the stock and one cut, following the results. Reddit has a 12-month forward price-to-earnings ratio of 242.7, compared with Snap’s (SNAP-N) 28.8 and Pinterest’s (PINS-N) 20.7
With files from staff and wires