Inside the Market’s roundup of some of today’s key analyst actions
TD Cowen analyst Michael Van Aelst predicts Alimentation Couche-Tard Inc.’s (ATD-T) same-store sales momentum has “likely stalled” due to recent snow storms south of the border.
“Q3 was expected to mark a return to SSSG,” he said. “CDA appears on track, as did USA until snow storms hit the south. Forex swings and higher D&A also push USD-reported EPS lower, but this is mostly offset by favourable conversion back to CAD-target price. Consensus EPS started to come down this week — we are a bit above others’ revised estimates which we assume reflects varying fuel margin assumptions.”
In a research report previewing the mid-March release of its third-quarter 2025 financial results, Mr. Van Aelst reduced his adjusted earnings per share projection by 11 cents to 68 cents, pointing to lower U.S. profits, “unfavourable” foreign exchange movements and higher costs tied to new store openings. That result would represent a 5-per-cent year-over-year (from 65 cents) driven by 13-per-cent higher EBITDA. The consensus estimate on the Street is currently 72 cents.
“Despite continued macro-related consumer weakness on low-income consumers (tied to high interest rates and effects from past inflation) and continued tobacco weakness, U.S. SSSG had turned modestly positive early in Q3 amid the launch of its $3, $4 and $5 meal deals in October and an expanding loyalty program,” he said. “That momentum had a setback in January when severe snow storms in the south kept people from leaving home for several days.
“As such, we now expect flat U.S. SSS for the Q (previously 1.0 per cent), but still a 160 basis point sequential improvement. 7-Eleven/Murphy USA reported negative 0.6 per cent/positive 1.5 per cent in CQ4. CDA is expected to fare better with SSSG of 3.0 per cent, fueled by new rules allowing c-stores to sell alcohol in some Ontario stores. In EUR & Other we see negative 1.5-per-cent SSSG as solid SSS in EUR are being more than offset by the negative impact of tobacco in HK (which continues through Q4).”
Maintaining his “buy” recommendation, Mr. Van Aelst lowered his target for Couche-Tard shares by $1 to $89. The average target is $89.33, according to LSEG data.
“ATD has a long track record of creating exceptional shareholder value, and, despite a brief pause caused by consumer weakness, we see that strong performance resuming in C2025 as comps get easier, new U.S. food programs and data analytics capabilities deliver results, and tobacco turns from a headwind in HK to a tailwind in Belgium/Netherlands,” he said. “The company generates a significant amount of free cash flow after dividends ($2-billion/year) that we now assume will be retained (i.e., the NCIB will be paused) until the company has better visibility into whether its non-binding bid to purchase 7&i will come to fruition — a transformative deal with substantial synergy and accretion potential that would roughly double ATD’s size and deliver 30-per-cent-plus EPS accretion, by our estimates. Short-term, however, investors appear shy to build positions considering the sizable equity issue that could be necessary to complete such a monumental deal.”
Elsewhere, National Bank’s Vishal Shreedhar is expecting a “muted” performance, pointing to unfavourable weather and the impact of U.S. fuel margins. He cut his target by $1 to $88 with an “outperform” rating.
“We view the c-store backdrop as challenged; however, we expect ATD to deliver better average performance in the coming quarters versus other large capitalization staple stocks in our coverage universe, assuming normalized fuel margins,” said Mr. Shreedhar.
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While acknowledging earnings expectations for Canadian banks in the approaching first-quarter earnings season are “modest,” Canaccord Genuity analyst Matthew Lee thinks investors will be “keen to ensure that the banks are progressing towards their objectives, particularly given the current view that H2 will demonstrate accelerating industry-level earnings growth.”
In a report released Tuesday, Mr. Lee called the quarter a bellwether for the full fiscal year ahead, seeing provisions for credit losses (PCLs) being “top of mind ... , especially for BMO, which we opine is finally getting credit for its forecasted downswing in impaired provisions.”
“An improving rate environment spurred better-than-expected mortgage book growth in Q4 across the industry,” he added. “For Q1, we expect that regulatory reform will add fuel to the fire, driving a further acceleration ahead of the historically active spring season. While the entire group should benefit, we would expect to see TD and RBC lead the pack on share given their Canadian retail footprints and existing customer bases. TD, in particular, has stressed the importance of its multi-channel strategy initiatives, which should pay dividends as volumes increase.”
“We expect that equity market oscillations through the quarter will help the Canadian banks deliver strong markets growth, which will be particularly beneficial to National Bank given its earnings exposure to trading. For Corporate and Investment Banking, the Canadian market remains very much in the early innings and, while we forecast revenue growth, we are hesitant to model Herculean improvements. We note, however, that RY, BMO, and TD are likely to see outsized growth as they benefit from exposure to a more constructive US environment.”
Seeing valuations remaining on the high-end of the historical range, Mr. Lee made these target adjustments:
- Bank of Montreal (BMO-T, “buy”) to $154 from $148. Average: $146.06.
- Bank of Nova Scotia (BNS-T, “buy”) to $82 from $84. Average: $60.13.
- Canadian Imperial Bank of Commerce (CM-T, “hold”) to $96 from $99. Average: $95.68.
- National Bank of Canada (NA-T, “hold”) to $136 from $142. Average: $140.23.
- Toronto-Dominion Bank (TD-T, “buy”) to $95 from $89. Average: $87.18.
He maintained a $191 target and “buy” rating for Royal Bank of Canada (RY-T). The average is $177.39.
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CIBC World Markets analyst Paul Holden expects first-quarter bank results to show positive earnings momentum, but he warns the outlook for the remainder of 2025 “will be clouded by U.S. tariff risk.”
“Our thesis for positive EPS revisions is put on hold until we have better clarity on where U.S. tariffs will land,” he said. “We maintain our Outperformer ratings on BMO and TD as these are the two Canadian banks that provide the best hedge against tariff risk (i.e., the most USD exposure.”
“The wildcard this quarter will be each bank’s outlook, considering tariff risk and the associated build in performing provisions. Otherwise, FQ1 is shaping up to be a positive quarter with strong capital markets growth, good net interest income (NII) growth, strong wealth management results and a modest uptick in impaired credit provisions. We expect all banks to add to performing provisions due to the potential implementation of U.S. tariffs. It is reasonable to expect the banks will revise base economic forecasts to some degree and/or revise downside scenario assumptions to capture the possibility of tariffs. We expect those banks with higher U.S. loan exposure (BMO and TD) to be most insulated from tariff risk, which we expect will be a key talking point on conference calls. We assume a modest build in performing provisions, 5 bps, on average.”
In a report released Tuesday, Mr. Holden downgraded Bank of Nova Scotia (BNS-T) to “neutral” from “outperformer” and cut his target to $81 from $84. The average on the Street is $80.13.
“We generally prefer not to change ratings this quickly (upgraded September 2024), but the macro environment has changed significantly,” he said. “We are still positive on bottom-up fundamentals based on our expectations for NIM expansion, realization of operating efficiencies and capital optimization. That does not change. What changes is the top-down call and our view on credit risk, as BNS could be more significantly impacted than peers in a tariff scenario. We could return to a more positive call if Mexico and Canada are able to negotiate relatively harmless tariffs. Until that happens, we think it will be hard for the stock to be a relative outperformer.”
Mr. Holden also made these target changes:
- Bank of Montreal (BMO-T, “outperformer”) to $154 from $150. Average: $146.06.
- National Bank of Canada (NA-T, “neutral”) to $135 from $141. Average: $140.23.
- Royal Bank of Canada (RY-T, “neutral”) to $175 from $176. Average: $177.39.
- Toronto-Dominion Bank (TD-T, “outperformer”) to $94 from $90. Average: $87.18.
“Expect BMO and TD to improve on a relative basis: Largely premised on preferred geographic exposure to the U.S. We also believe the market should continue to recognize positive and more shareholder-friendly actions taken by TD’s leadership,” said the analyst. “We assume TD’s discount improves to 1% relative to the group from a former assumption of 5%. We assume BMO’s premium improves to 4 per cent relative to the group from a former assumption of 1 per cent (U.S. banks are seeing more multiple expansion than Canadian banks).
“BNS and NA become less favourable: Primarily based on exposure to geographic areas that carry higher tariff risk, we view these two names as less favourable. We decrease NA’s assumed premium to 2 per cent relative to the group, from a prior assumption of 7 per cent. We increase our discount assumption for BNS to 10 per cent relative to the group, from a former assumption of 8 per cent.”
Elsewhere, Jefferies’ John Aiken downgraded TD shares to “hold” from “buy” with a $99 target, rising from $90.
He also reduced his targets accordingly: BMO to $140 from $146 with a “hold” rating; CIBC (CM-T) to $103 from $104 with a “buy” rating, National Bank to $149 from $153 with a “buy” rating, RBC to $192 from $197 with a “buy” rating and Scotiabank to $77 from $81 with a “hold” rating.
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RBC Dominion Securities analyst Maurice Choy thinks “tangible signs of favourable energy demand growth continue to emerge” across Fortis Inc.’s (FTS-T) “diverse” portfolio, predicting higher utilization and potential new investments will follow.
“Having introduced a new capex plan in September 2024 that saw Fortis’s five-year rate base CAGR [compound annual growth rate] rise to around 6.5 per cent (from around 6 per cent previously), the company shared updates as part of its quarterly results release that support the expansion and extension of growth beyond its base plan,” he said. “For instance, in Arizona, its utilities are seeing ‘significant’ service requests to support potential retail load growth, including over 300 MW of load by 2027 (representing about 20 per cent of current retail sales), and a further 600 MW of load beginning in 2030. Also, Fortis expects meaningful new customer interconnections ahead to support not only the 1.6 GW of load via the Big Cedar Load Expansion Project, but also roughly 5.0 GW of load if a number of proposed data center and economic development projects that are currently in preliminary stages move forward.”
In a research note titled Some of the fizz, none of the calories, Mr. Choy said the St. John’s-based utility released another set of quarterly and annual results before the bell on Friday that “showcased the growth and predictability” of its earnings.
“We believe investors can look forward Fortis benefiting from a number of favourable themes this year including: (1) the elevated North American energy demand landscape, including in Arizona and at ITC; (2) the lowering of regulatory lag in Arizona via formula rate plans; and (3) the delivery of its $26 billion capex plan that supports a roughly 6.5-per-cent rate base CAGR, and its 4–6-per-cent annual dividend growth guidance through 2029,” he said.
After raising his full-year earnings expectation, the analyst increased his target for Fortis shares to $69 from $65 with a “sector perform” rating. The average is $63.18.
Elsewhere, other changes include:
* Raymond James’ Theo Genzebu to $62.50 from $61 with a “market perform” rating.
“Our constructive stance on Fortis is primarily a function of the company’s highly diversified regulated utility footprint and durable longer-term investment themes,” he said. “However, we acknowledge that these are longer-term opportunities and note that with recent strong share price performance, the stock currently trades at 19.0 times 2025 P/E, which is close to the midpoint of the historical 15.0–23.0 times trading range and within shooting distance of 52-week highs.”
* CIBC’s Mark Jarvi to $69 from $65 with a “neutral” rating.
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Following “positive” third-quarter results that exceeded his expectations, National Bank Financial analyst Cameron Doerksen continues to expect CAE Inc. to “enjoy a multi-year period of growth supported by positive end market backdrops” for both its Civil and Defence segments.
After the bell on Thursday, the Montreal-based pilot training company reported quarterly revenue of $1.223-billion, up 12 per cent and above both the analyst’s $1.158-billion estimate and the Street’s expectation of $1.171-billion. Adjusted earnings per share of 29 cents was in line with the consensus projection and 3 cents ahead of Mr. Doerksen’s forecast.
He said he was “encouraged” by the report, pointing civil headwinds proving to be “less of a drag” than expected, Defence segment margins trending ahead of forecast, and Board changes providing “greater confidence” in the CEO transition process.
“For F2025, CAE was guiding to Civil EBIT growth of 10 per cent, and we were anticipating a reduction in guidance with our prior forecast for 6.5-per-cent EBIT growth,” said Mr. Doerksen. “However, Civil EBIT in Q3 was better than expected and now management is guiding for F2025 growth modestly below the prior 10-per-cent growth expectation which is not as much of a reduction as we had anticipated. The Civil pilot training headwinds will persist through F2026, but with Boeing ramping up new aircraft deliveries and the Airbus aircraft groundings expected to progressively improve, we see a more normalized training demand environment for CAE by F2027.
“In November, CAE announced a CEO transition plan that will see the current CEO’s replacement in place by CAE’s AGM in August 2025. We believe CAE shareholders would like to see the next CEO have a strong track record of effective capital allocation, and we further believe that the share price resurgence for CAE in recent months partly reflects market optimism around a future CEO. As we detail below, CAE’s Board changes increase our confidence that the company will select a candidate that investors will view positively, although we still caution that the new leader and their priorities for the company remain a key uncertainty.”
Seeing its current valuation as “fair,” Mr. Doerksen kept a “sector perform” recommendation while raising his target to $40 from $38. The average on the Street is $37.92.
“We have trimmed our Q4/25 estimates to reflect CAE’s updated guidance, but have modestly increased our F2026 estimates to reflect stronger Civil revenue growth and an assumed faster pace of Defense margin improvement,” he added.
Elsewhere, others making changes include:
* RBC’s James McGarragle to $43 from $38 with an “outperform” rating.
“The key takeaway from FQ3 results was continued improvement in Defence margins, which are up meaningfully the last three quarters under the leadership of Nick Leontidis,” he said. “The progress during the past year has been extremely impressive in our view and significantly increases our confidence in the team’s ability to continue to execute going forward. Better Defence margins, when combined with higher revenues (guidance increased and B2B robust), provide a platform for meaningful operating leverage looking ahead. We also came away positive on FCF in the quarter and see Civil as well positioned for when pilot hiring normalizes.”
* Desjardins Securities’ Benoit Poirier to $45 from $40 with a “buy” rating.
“We have increased our multiples to account for investor confidence and reduced risk following the board changes. Browning’s involvement in the CEO search is a clear signal that the story has reached an inflection point (open line of communication between investors and the board). Given CAE’s moat, recent transaction proof points and the potential divestiture of Defence (re-rating catalyst), we believe the case can be made for multiple expansion above historical averages,” said Mr. Poirier.
* Scotia’s Konark Gupta to $40 from $32.50 with a “sector perform” rating.
“Our more positive view on CAE primarily reflects faster-than-expected Defense margin recovery and solid board appointments (including Calin Rovinescu, former Air Canada CEO, as the new Chair) that could bring changes to support our aboveconsensus estimates. While FQ3 results were mixed vs. our expectations, with EBIT ahead but EPS below, we are most encouraged to see further momentum in Defense margins, even without an R&D tax credit noise. Management’s guidance changes, including Defense higher and Civil modestly lower among others, drive a net increase in our F2025 EBIT and FCF outlook, although our EPS estimate came down due to adjustments to below-the-line items (interest and taxes). The stock is up 65 per cent over the past six months, riding on Defense execution improvement and high expectations from a new board/management (pending CEO and CFO changes),” he said.
* Canaccord Genuity’s Matthew Lee to $40 from $30 with a “hold” rating.
“Our key takeaway from the quarter was the firm’s improved outlook on Defence, which outperformed our expectations on margins and is expected to experience a meaningful strengthening in revenue. While margins will likely soften in Q4, we view the quarter as a crucial step towards the 10-per-cent SOI margin mark and note that the impact of the firm’s legacy contracts appears to be dissipating. Along with the quarter, CAE announced an update to its board of directors, with industry veteran, Calin Rovinescu, being appointed the chair of the board. Despite remaining without a CEO, we believe the addition of Mr. Rovinescu should add a level of capital prudence to the firm, which we expect will translate into improving cash flow generation over the medium term. While there remain potential risks to the CAE story in the near term related to aircraft delivery delays, we believe the medium-term opportunity is very much in focus, which leads us to increase our F26 estimates,” said Mr. Lee.
* TD Cowen’s Tim James to $39 from $35 with a “hold” rating.
“We view Q3 as providing a selection of positive data points and developments for investors to cheer. These include strong Civil revenue, Defense margin momentum, Board initiatives, book-to-bill ratios and FCF/deleveraging. We believe valuation appropriately reflects significant progress on many fronts since mid-2024,” said Mr. James.
* CIBC’s Kevin Chiang raised his target to $39 from $37 with a “neutral” rating.
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Ahead of the Feb. 28 release of its fourth-quarter 2024 financial results, TD Cowen analyst David Kwan sees Lumin Group Inc.’s (LMN-X) recent share price weakness as creating a good entry point for investors.
Also believing the Toronto-based spin-off of Constellation Software Inc. (CSU-T) is poised to continue to “generate superior growth and margins, he raised his recommendation to “buy” from “hold” previously.
“Our $178.3-million revenue estimate implies 25-per-cent year-over-year growth,” said Mr. Kwan. We expect increased contributions from Motive and Axyom. However, both businesses are likely to remain a drag on organic growth (we forecast negative 5 per cent). Although much smaller than Motive, we believe there is significant growth ahead at Axyom, as anchor customer Verizon continues to ramp-up purchase orders and other customers follow suit, now that the business is in financially stable hands.
“Our $60.6-million EBITDA estimate implies margins of 34 per cent, a solid improvement from 30.5 per cent last year, when margins were negatively impacted by the Synchronoss carve-out deal. We expect margins to still be a bit volatile in the near term, as LMN continues to restructure and strengthen Motive, with our Q4/24 EBITDA margin modestly down from Q3/24 (35.6 per cent).”
Mr. Kwan also thinks the return of CEO David Nyland from a leave of absence, which was announced Friday, should help reaccelerate M&A activity.
“We believe the share-price weakness/underperformance in recent months is at least partially due to the slowdown in M&A activity, as well as Mr. Nyland’s leave of absence, which could have slowed M&A activity further, given his critical role,” he said. " However, LMN announced the Vidispine carve-out deal in late January during Mr. Nyland’s absence, and now with LMN’s M&A engine back at full power and its robust pipeline, we believe LMN is poised to have another strong year on the M&A front, likely with more (lucrative) carve-out deals ahead.”
His target for Lumine shares jumped to $47 from $41. The average is $45.50.
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Seeing a valuation reset creating more enticing entry points for investors, CIBC World Markets analyst Mark Jarvi upgraded Capital Power Corp. (CPX-T) and TransAlta Corp. (TA-T) to “outperformer” from “neutral” previously.
“Our updated price targets for CPX ($64) and TA ($19.50) imply potential total returns of 27 per cent and 32 per cent, respectively, from current share prices, following 18-per-cent and 27-per-cent year-to-date drawdowns,” he said. “In our view, the pullback in the share prices was largely driven by the DeepSeek news that brought into question future power demand from GenAI. However, U.S. power peers have snapped back, and we think CPX and TA now offer more interesting relative value and can play catch-up as both firms should benefit from tightening power markets, including potential data centre-driven load growth in Alberta. While TA arguably offers more torque and valuation upside, we favour CPX, as we believe it offers more potential catalysts and is more insulated from potential Alberta power price softness.
His target for Capital Power slid to $64 from $68, remaining above the $63.50 average on the Street.
His TransAlta target dropped to $19.50 from $23, topping the $18.83 average.
“In our view, CPX is better positioned on potential M&A given it opportunistically cashed up in December,” Mr. Jarvi added. “Given its track record, we have more conviction CPX can deliver a solid U.S. acquisition (and TA has less dry powder for M&A). Further, we like CPX’s multiple recontracting options in the U.S. and believe its Genesee asset is well positioned to secure a data centre-related deal. CPX is more insulated against any Alberta power price weakness (given hedges/asset mix) and has more to gain if carbon pricing in Alberta moderates; TA has more to gain if Alberta power prices rise. Given soft pricing year-to-date, we believe TA may provide conservative 2025 guidance on Feb. 20.
“Our new targets reflect a combination of estimate changes including modestly lower Alberta power prices for the next two years and moderation in valuation parameters as we dial back assumed upside from data centres and the re-rating potential. CPX and TA currently trade at FY2 (2025) consensus FCF yields of 12 per cent and EV/EBITDA multiples of 8.5 times and 8.1 times (1 times lower than one month ago), which are attractive on a relative/absolute basis.”
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In other analyst actions:
* CIBC’s Cosmos Chiu downgraded Fortuna Mining Corp. (FVI-T) to “underperformer” from “neutral” with a $7 target, down from $8. The average is $8.23.
“With Fortuna Mining’s share price approaching our price target, we have taken this opportunity to revisit our model, as well as our investment thesis for the story,” he said. “FVI’s transition from a silver company into a West African producer began with the acquisition of Roxgold in 2020, and is now substantially complete with the announcement of the sale of the San Jose mine in Mexico on January 15, 2025 (expected closing by Q1/25). Our analysis shows that silver’s contribution to the company has decreased from 50 per cent in 2019 to a projected 3 per cent in 2025. Despite the transition, FVI shares continue to trade more like a silver company, up 94 per cent in the past year, in line with silver peers up 100 per cent but significantly outperforming the West African names in our coverage universe up on average 30 per cent. From one perspective, we can understand why FVI shares could still be trading like a silver company, given its continued inclusion in some indices including the Global X Silver Miners ETF (SIL); however, looking ahead, in substance and in name, Fortuna Mining is now a West African-focused producer, especially after the company completed its name change from Fortuna Silver to Fortuna Mining on June 20, 2024. Using West African peer group target multiples, we lower our price target for FVI from $8 to $7, and effective February 17, we downgrade shares to Underperformer. Near-term, for Q4/24, our $0.12 EPS estimate is below the $0.19 consensus, driven by a higher quarterly AISC of $1,702/oz and FX losses from a weakened euro. For silver exposure, we recommend VZLA, and for West African exposure, we recommend ORE.”
* CIBC’s Kevin Chiang cut his target for Air Canada (AC-T) shares to $24 from $28 with an “outperformer” rating. Other changes include: Stifel’s Daryl Young to $26 from $28 with a “buy” rating., ATB Capital Markets’ Chris Murray to $32 from $31 with an “outperform” rating, Scotia’s Konark Gupta to $25 from $23 with a “sector outperform” rating and RBC’s James McGarragle to $20 from $23 with a “sector perform” rating. The average is $26.19.
“Q4 results were solid with management flagging strong revenue trends in Q4 continued into January,” said Mr. McGarragle. “Moreover, management reiterated 2025 guidance and highlighted encouraging booking and yield signals for Q2 and into Q3. However, guidance does not include any potential impact from tariffs, and we continue to see risk from FX. While we believe Air Canada’s global network allows it to shift capacity away from transborder in the event of sustained tariffs, we note the domestic environment is over supplied (as we have been flagging) and pacific lanes are facing yield pressure, thereby limiting alternatives.”
* RBC’s Nelson Ng cut his Algonquin Power & Utilities Corp. (AQN-N, AQN-T) target to US$5.50 from US$6 with a “sector perform” rating. The average is US$5.64.
“In the last three months, AQN closed asset sales, transitioning largely to a regulated utility pure-play. The recently announced CEO transition and CFO departure provide the company a fresh start, and the incoming CEO (Rod West) will have the opportunity to develop a strategy for long-term growth that builds investor confidence,” said Mr. Ng. “We modestly reduce our price target ... to reflect our view that it will take time for investor sentiment to improve.”
* CIBC’s Dean Wilkinson lowered his CAP REIT (CAR.UN-T) target to $50 from $55, below the $53.19 average, with a “neutral” rating. Other changes include: RBC’s Jimmy Shan to $55 from $57 with an “outperform” rating and TD Cowen’s Jonathan Kelcher to $53 from $52 with a “buy” rating.
“We can see why investors would shy away from the CDN apartment sector as it is undoubtedly coming off peak conditions. It is much easier to talk about how much higher rents can go than how low occupancy can get,” said Mr. Shan. “However, all indications thus far, including management commentary, point to a return to ‘normal’ conditions. What’s normal? For CAP, 3-4-per-cent SP NOI growth – that’s where we think it’ll land in 2025. In the meantime, its capital allocation activities have resulted in a high-graded portfolio with lower leverage priced at 20% discount to NAV.”
* National Bank’s Jaeme Gloyn moved his Definity Financial Corp. (DFY-T) target to $70 from $68 with an “outperform” rating. Other changes include: Raymond James’ Stephen Boland to $62 from $55 with a “market perform” rating, Scotia’s Phil Hardie to $61 from $60 with a “sector perform” rating, Desjardins Securities’ Doug Young to $64 from $58 with a “hold” rating an CIBC’s Paul Holden to $66 from $59 with a “neutral” rating. The average is $63.70.
“We were pleased with Definity’s fourth quarter results that saw operating earnings coming 7 per cent ahead of Street expectations on the back of strongerthan-expected underwriting profitability,” said Mr. Hardie. “Core earnings were clean and key operating metrics were at or above expectations and book value per share grew by upper single digits, benefiting from a favourable adjustment to the balance sheet and solid earnings. Management noted that its digital platform Sonnet contributed positively to profitability in the quarter, positioning the portfolio to break even or better in 2025. Despite record industry-wide insurance losses due to severe weather events, Definity met or exceeded its financial targets for 2024, generating an ROE of 10.5 per cent, a combined ratio of 94.5 per cent, and double-digit top-line growth. We think this speaks volumes about the company’s successful transformation over the years, and the resilience of its business model. Despite the solid results and encouraging operational momentum, Definity stock traded down marginally. With little else to be concerned with, we think current valuation levels are the key hold back for investors.”
* Mr. Gloyn also increased his Goeasy Ltd. (GSY-T) target to $255 from $245 with an “outperform” rating, while Raymond James’ Stephen Boland moved his target to $245 from $230 with an “outperform” rating.. The average is $238.78.
“This was a strong quarter,” said Mr. Gloyn. “GSY delivered a solid quarter of growth, profit and sequential charge-off improvement that should calm investor concerns regarding the credit picture and uncertainty regarding tariffs. The conference call added confidence in this view. Accordingly, our estimates and price target ticked higher. Trading at approximately 8 times consensus 2025 suggests a favourable risk-reward setup given our high-teen EPS growth and mid-20s ROE forecasts.”
* RBC’s Maurice Choy raised his Enbridge Inc. (ENB-T) target to $67 from $63 with an “outperform” rating. Other changes include: Raymond James’ Justin Jenkins to $67 from $65 with an “outperform” rating and TD’s Aaron MacNeil to $67 from $66 with a “buy” rating.. The average is $63.37.
“With news flow being understandably light heading into Enbridge Day on March 4, we believe the event will offer the market a much-needed refresher on how the company’s four core franchises can capture long-term growth in North America’s rising energy demand environment and position it to extend its growth rate through the end of the decade,” said Mr. Choy. “To reinforce its cornerstone position in many energy- and income-focused investment portfolios, investors should expect an uncompromising discipline on capital allocation to preserve balance sheet strength and deliver sustainable return of capital to shareholders.”
* RBC’s Scott Heleniak raised his Fairfax Financial Holdings Ltd. (FFH-T) target to US$1,750 from US$1,600 with an “outperform” rating, while Cormark Securities’ Jeff Fenwick increased his target to $2,250 from $2,125 with a “buy” rating.. The average is $2,401.08 (Canadian).
“Overall Fairfax continues to produce solid overall combined ratios with a sub-90 combined ratio in Q4 even with hurricane impacts. Underwriting results have remained healthy in recent quarters and the Q4 reserve release run rate was above peers and evident across all segments,” he said. “Premium growth was up double digits although the company is being more selective in targeting growth given market conditions. Share buybacks continued at a notable pace. Q1 California wildfire loss guidance was notable given its reinsurance exposure to the event. We remain constructive on the shares at the current valuation given strong execution.”
*Scotia’s Mario Saric bumped his H&R REIT (HR.UN-T) target to $12, above the $11.38 average, from $11.75 with a “sector perform” rating.
* Mr. Saric lowered his Killam Apartment REIT (KMP.UN-T) target by 25 cents to $20.50 with a “sector perform” rating. The average is $21.85.
* CIBC’s Hamir Patel cut his Interfor Corp. (IFP-T) target to $20 from $22, below the $22.83 average, with a “neutral” rating.
“We are maintaining our Neutral rating on Interfor, while moderating our price target ... reflecting lower SYP volume assumptions and tariff uncertainty,” said Mr. Patel. “While lumber industry valuations remain attractive in a historical context, we continue to favor larger cap names with more diversified product mixes given duty headwinds for lumber (in addition to potential tariffs) and continued uncertainty on when housing turnover will pick up again in the U.S. (key to fueling an R&R recovery).”
* CIBC’s Krista Friesen lowered her target for Magna International Inc. (MGA-N, MG-T) to US$44 from US$48 with a “neutral” rating. Other changes include: TD’s Brian Morrison to US$47 from US$50 with a “buy” rating, RBC’s Tom Narayan to US$51 from US$52 with an “outperform” rating and Raymond James’ Michael Glen to US$50 from US$53 with a “market perform” rating. The average is US$48.68.
“While we would acknowledge that Magna’s 4Q results tracked largely ahead of expectations, guidance for 2025 was underwhelming and is prompting some sizeable downward revisions with our forecast. Overall, we would regard Magna’s 2025 guide as a conservative start to the year. That said, the biggest risk to the numbers remains trade and tariff related, which the company has yet to factor in given the unknowns that still exist on this particular item. During the conference call, management did acknowledge that the level of tariffs being proposed would be extremely disruptive to the auto industry as a whole, commenting that it would be unrealistic for a supplier to absorb such cost escalation. Until clarity on trade is established, this will remain the single biggest overhang for Magna stock and the auto parts sector as a whole,” said Mr. Glen.
* National Bank’s Vishal Shreedhar cut his target for MTY Food Group Inc. (MTY-T) to $54, below the $56 average, from $57 with an “outperform” rating.
* RBC’s Michael Harvey cut his Paramount Resources Ltd. (POU-T) target to $19 from $34 with a “sector perform” rating. The average is $37.06.
* National Bank’s Matt Kornack bumped his target for Primaris REIT (PMZ.UN-T) to $17.25 from $17 with a “sector perform” rating. The average is $18.31.
“PMZ ended the year off on a strong note as operating stats progressed, with occupancy moving higher and recoveries normalizing,” said Mr. Kornack. “2025 guidance was in line with expectations and is a reasonable bridge to longer-term 2027 figures (we remain above guidance on FFO). The main drivers for the next two years are gradual occupancy gains and normalizing recoveries (percent rent in lieu of base rent is dissipating as a driver). Our lone concern is that heightened economic uncertainty has the potential to derail progress and hamper discretionary spending. This hasn’t yet materialized, but we’re not sure enough time has passed to gauge the impact of U.S. politics or slowing Canadian population growth. Longer-term capital needs are also difficult to predict although modernization investments have recently been made.”
* Mr. Kornack also increased his SmartCentres REIT (SRU.UN-T) target by $1 to $26 with a “sector perform” rating. The average is $26.94.
“SRU’s Q4 print was ahead of our expectations, and driven by its operations which were positively affect by higher CAM recoveries while also comping softer year-over-year results,” he said. “Apart from the solid operational performance, there were two notable developments. Costco will lease a vacant Rona box (550k sf) at the REITs Meadowvale property and is scheduled for a fall opening. Secondly, an additional three storage sites are now under active construction (six total), which has aided NOI growth during lease-up. Organic growth has been positively impacted by the inclusion of assets under lease-up (storage + apartments), whereas the stabilized portfolio continues to see low-single-digit performance. On this basis, management expects SPNOI growth to come in at the lower bound of its 3-5-per-cent range provided last quarter.”
* TD Cowen’s Michael Tupholme raised his Russel Metals Inc. (RUS-T) target to $52 from $50 with a “buy” rating. The average is $54.33.
* Jefferies’ raised his Shopify Inc. (SHOP-N, SHOP-T) target to US$130 from US$110 with a “hold” rating. The average is US$132.77.
* National Bank’s Adam Shine increased his target for Stingray Group Inc. (RAY.A-T) to $11.50 from $10 with an “outperform” rating. The average is $11.50.
“We marketed RAY last week,” he said. “While guidance wasn’t necessarily a topic, investors do struggle to gauge the durability of RAY’s growth vectors. During its 3Q conference call, management made reference 8 times to ‘momentum’, ‘growth’ or ‘good position’ post-f2025, let alone over next 3-4 years. If that’s the case, 3-year CAGRs for revs/EBITDA/FCF (NBF 4.6 per cent/5.4 per cent/8.2 per cent) would prove beneficial or even f2028 expectations that may include possible M&A. We’d like to think we’re reasonably conservative and low in possible ranges.”
* RBC’s Maurice Choy increased his TC Energy Corp. (TRP-T) target to $74, exceeding the $72.67 average, from $71 with an “outperform” rating.
“While the weaker-than-expected 2025 EPS guidance and the lack of new growth announcements likely weighed on the stock’s sentiment following the release of TC Energy’s Q4/24 results, investors can look forward to favourable updates in the coming quarters that not only should position the company to extend its 5-7-per-cent EBITDA CAGR beyond 2027, but also derisk the company’s business,” said Mr. Choy. “Importantly, with gas and electricity opportunities seemingly abundant, we like that TC Energy is steadfast on deleveraging towards its 4.75 times debt/EBITDA target and is laser focused on maximizing the spread between its earned returns and its cost of capital.”
* Scotia’s Phil Hardie cut his Trisura Group Ltd. (TSU-T) target to $52 from $59 with a “sector outperform” rating, while Raymond James’ Stephen Boland reduced his target to $57 from $64 with an “outperform” rating.. The average is $51.25.
“Trisura’s stock price significantly underperformed its peers since reporting its Q3/24 earnings in November,” said Mr. Hardie. “We think the stock’s significant rally following what we view as a mixed quarter provides solid evidence that the stock is washed out and oversold. We have de-risked our outlook and taken a more conservative view on valuation by slashing our target by 12 per cent but still see solid upside potential and would recommend investors buy into recent weakness.
“Despite a significant upside surprise on operating EPS, we view the quarter as a mixed result given a sizeable reserve taken for the U.S. platform that is treated as non-operating earnings and weaker operating earnings from that platform. The reserve intended to ringfence a group of U.S. programs that Trisura had previously non-renewed and also to align its U.S. reserving practices with those of its Canadian platform. Although taking a large reserve has been a near-term negative, we expect it to lead to much cleaner results going forward. We expect a clean set of results characterized by robust earnings growth to drive solid investor returns over the coming 12 months.”
* CIBC’s Hamir Patel cut his West Fraser Timber Co. Ltd. (WFG-T) target to $170 from $171 with an “outperformer” rating, while Scotia’s Ben Isaacson lowered his target to US$100 from US$109 with a “sector outperform” rating. The average is $163.81.
* Desjardins Securities’ Benoit Poirier raised his WSP Global Inc. (WSP-T) target to $302 from $299 with a “buy” rating. Other changes include: Stifel’s Ian Gillies to $310 from $295 with a “buy” rating and CIBC’s Krista Friesen to $293 from $278 with an “outperformer” rating. The average is $285.43.
“We expect investors to embrace WSP’s broadened M&A ambitions given the company’s favourable valuation (multiple arbitrage opportunities at play), increased scale, strong balance sheet and impressive M&A/quick integration track record. Moreover, most of the professional services/consultancy firms mentioned in its presentation are not publicly traded, which makes WSP one of the only avenues for equity investors to gain exposure to this growing sector and could lead to further multiple re-rating,” said Mr. Poirier.