Inside the Market’s roundup of some of today’s key analyst actions

Calling it “a well-entrenched growth story,” National Bank Financial analyst Michael Doumet initiated coverage of Badger Infrastructure Solutions Ltd. (BDGI-T) with an “outperform” recommendation on Thursday, seeing its current rally toward an all-time high as “warranted.”

“Badger Infrastructure Solutions Ltd. is the largest (10 times the next largest) provider of hydrovac excavating services in North America,” he said. “Despite its extensive track record of organic growth (and in part due to its challenged periods; 2015-16 and 2020-21), we believe BDGI is the best version of itself today: (i) it is more diversified across geographies, end-markets, and customers, (ii) it should benefit from multi-year tailwinds across infrastructure and non-residential construction, supported by the IIJA, IRA, CHIPS, LNG, electrification, mega projects, and data centers, and (iii) it is positioned to leverage its ‘scalability’ to structurally enhance its margin performance. With a North American market share of approximately 25 per cent, BDGI is targeting double-digit top-line (organic) growth. In fact, excluding periods of earnings recoveries, we expect BDGI to achieve faster earnings growth in the NTM [next 12 months] than it has in over a decade (approximately 15-per-cent EBITDA growth).”

In a client report released before the bell titled More Trucks, More Bucks, Mr. Doumet emphasized the Calgary-based company’s growth has “gives it scale. Scale makes it better.”

“Similar to rental companies, there are notable positives to being a Bigger-Badger: for its customers, size improves truck availability and operating flexibility; for itself, size allows for better overhead absorption and lower capital cost,” he said. “We believe BDGI’s operating platform/SG&A can support a much larger truck fleet; as such, we think BDGI’s next leg of growth will drive more structural gains. For context, from 2019 to 2024, BDGI implemented several platform-enhancing initiatives that added costs (and weighed on margins) but should provide it with several years to enhance operating leverage – i.e., ‘scalability’.

“Now, with roughly 1,700 trucks, we think (through-the-cycle) EBITDA margins of 25-per-cent-plus are achievable; with 2,000 and 2,500 trucks, we believe BDGI can structurally raise its EBITDA margins to 27.5 per cent and 30.0 per cent, respectively (before considering upside from its operational excellence program). Each incremental truck has a 2.5 times EV/EBITDA payback. To top it all off, we believe the current wave of truck retirements peaked in 2025 (and eases in 2027), combining its margin expansion potential with a lighter need for capex.”

Saying he views Badger as a “a cyclical company in structural growth-mode,” Mr. Doumet set a target for its shares of $84 with an estimated total return of 19.4 per cent. The current average on the Street is $76.44, according to LSEG data.

“Given cyclical growth enables structural growth (more demand = more trucks = more structural operating leverage), BDGI’s ‘bursts’ of share price appreciation over the last decade have coincided with periods of concurrent cyclical and structural growth,” he concluded. “We argue that the growth ‘cycle’ that began post-pandemic and may extend to be decade-long is giving investors heightened visibility on the ‘Bigger-Badger’ potential (bigger and higher margin). The 30-per-cent-plus increase in the Dodge Momentum Index (leads construction spend by 12 to 18 months), suggests potentially meaningful growth through early-2027. We based our TP on a 9.0 times EV/EBITDA multiple on our 2027E (1.0 times premium versus historical), equivalent to a 20.3 times P/E multiple (0.3 times). To us, high-single-digit fleet growth, price and utilization enhancements, and an incremental margin expansion opportunity (altogether combining for a potential EBITDA CAGR of 15 per cent) substantiates its premium valuation and continued upside potential.”

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Following a group of investor meetings with Telus Corp. (T-T) executives this week, TD Cowen analyst Vince Valentini expects to see a recovery in its share price “over the next few months.”

“We believe management is highly motivated to deliver on asset sales, which in turn will lower interest costs, so FCF should be covering 100 per cent of the cash dividend by the end of 2027, even with only modest EBITDA growth,” he said in a client report. “When investors realize that this is not a repeat of the lead up to the dividend cut at BCE (the post-lease payout ratio is nowhere near as high at Telus; much larger percentage of household passings already migrated to fibre from copper, which means capex can decline; and Telus has a revenue mix with more organic growth potential), then we expect a meaningful recovery in the share price. Even a 7-per-cent dividend yield (30 per cent above BCE’s yield and almost double Rogers) would put T shares at $24.”

Andrew Willis: Telus needs to kick its addiction to dividend hikes

Mr. Valentini emphasized he remains “optimistic” about the growth prospects and potential valuation for its Health division moving forward.

“Not much has changed in our forecasts or outlook for TH since our deep dive report in June, but we were impressed with the execution plan laid out by President Mohamed El-Demerdash,” he said. “Telus is already one of the largest scale providers of EAP solutions globally, but it has only about 6-8-per-cent market share, which leaves lots of room for growth in our view

“At its core, TH aims to use technology to help lower overall healthcare costs and improve the quality of life. As opposed to the expense of acute care once someone is sick, TH is looking to help employers and governments prevent or delay people from coming to the hospital for health complications. Preventative health and wellbeing is a big and growing TAM in our view, and we believe Telus is well positioned to gain share.”

The analyst reaffirmed his “buy” rating and Street-high $26 target for Telus shares. The average on the Street is $21.56.

“Recent weakness has narrowed the valuation gap for T versus peers, so we are moving it up to number two in our pecking order,” he said. “Narratives regarding weak EBITDA growth, and dividend cut risk, are overblown in our view.

“As we move through H1/26, we see visible catalysts that should increase investor confidence in debt reduction targets, which in turn should support a lower dividend payout ratio and removal of the dilutive discount DRIP. Our EBITDA estimates and target price remain unchanged, but we added some interest costs to lower what had been a street high estimate for FCF in 2026 (this also impacts EPS). We continue to believe our 2026 estimates will be near the guidance ranges provided by management in February.”

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While National Bank Financial’s Vishal Shreedhar expects to see an acceleration in same-store sales growth from Empire Co. Ltd. (EMP.A-T) when it reports second-quarter fiscal 2026 results on Dec. 11, however he warns earnings are likely to fall as gains from investments dwindle.

The equity analyst is currently forecasting consolidated earnings per share of 69 cents from the Stellarton, N.S.-based grocer, which operates banners such as Sobeys, Safeway, IGA, Farm Boy and discounter FreshCo. That estimate falls below the Street’s expectation of 73 cents, which was also the result a year ago. That comes despite a food sssg of 2.1 per cent versus 1.8 per cent in fiscal 2025.

“We expect Q2/F26 EPS to be lower by 5.0 per cent year-over-year, primarily reflecting lower aggregate share of earnings from Investments and Other income (timing), higher SG&A (excluding D&A; in part due to a distribution centre disruption), D&A, and interest expense, partly offset by positive food sssg, new store openings, share repurchases, and a higher gross margin rate,” he said. “We expect earnings from Investments & Other income to be lower by 67 per cent year-over-year. The year-over-year delta in earnings from Investments & Other income impacts EPS by $0.11.”

“We consider FR [Food Retail] segment results (excluding the contribution from Other income) to be more meaningful than total company results for the purposes of evaluating recurring earnings power. For reference, we model FR excluding Other income EPS of $0.64, higher by 11 per cent year-over-year.”

Mr. Shreedhar said the sales growth reflects several factors, including: “(i) management comments that Q2/F26 started ahead of Q1/F26 trends, (ii) continued benefits to e-commerce sales growth from, among other factors, partnerships with Uber Eats and Instacart (announced October 2024) as well as strong growth at Voilà, (iii) accelerating food store inflation (notwithstanding management comments in Q1/F26 that internal inflation was materially lower than the industry), and (iv) a frozen DC shutdown in Ontario at Metro (started September 15, 2025; service to stores resumed on November 18, 2025, with normal operations expected by end of December 2025).”

“Peer commentary suggests a continuation of themes from prior quarters,” he added. “Our review of peer commentary suggests: (i) An ongoing consumer focus on value (including higher private label penetration; elevated, albeit sequentially stable promotion penetration; discount sssg outpacing conventional, the gap being stable, etc.), (ii) The Buy Canadian momentum is slowing, and (iii) Internal targets related to new stores are being met.”

Maintaining his “sector perform” rating for Empire shares, Mr. Shreedhar reduced his target by $1 to $58, matching the current average on the Street.

“We remain on the sidelines as we evaluate EMP’s ability to deliver consistent growth; the valuation discount versus peers, in part, compensates investors for a long-term fluctuating earnings track record,” he said.

Elsewhere, Scotia’s John Zamparo reduced his target to $57 from $58 with a “sector outperform” rating.

“We have reduced our SSS and EPS estimates into Empire’s second fiscal quarter, owing to greater industry competition, a moderation of Buy Canada sentiment from consumers, and generally lower SSS across the Canadian grocers over the last few earnings releases. As well, the duration of Empire’s lockout at its Rocky View DC probably shaves 3 cents off this quarter’s EPS, in our view,” Mr. Zamparo said.

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Desjardins Securities analyst Benoit Poirier sees “momentum returning for Calian Group Ltd. (CGY-T) and likes its setup for 2026 with “achievable base expectations and upside potential from increased Canadian defence spend.”

“Near-term momentum should persist as CGY transitions to two cleaner segments, divests non-core units, hosts an investor day in the spring and adds two new board members,” he added. “Recent newsflow indicates the Canadian military plans to materially expand reserves from 28,000 to 400,000 as part of its mobilization strategy — a positive tailwind given 30 per cent of CGY’s revenue is tied to CAF health and training.”

Shares of the Ottawa-based company surged 12 per cent on Wednesday after it reported it swung to a profit in its fourth quarter as revenue rose 12 per cent year-over-year to $203.2-million. Adjusted earnings per share grew by 14 per cent to $1.01.

From Nov. 11: Calian enters agreement with Plantro to shake up board, sell ‘non-core’ assets

“Outlook provided on the call points to constructive FY26 setup. Management stated that it is targeting double-digit growth in both revenue and EBITDA in FY26,“ the analyst said. ”This will be driven by mid-single-digit organic growth, supplemented by contributions from recent acquisitions AMS (was already in our numbers) and InField (added to our numbers this quarter but not sizable; revenue of less than $5-million). “This points to an attractive base case vs our previous forecasts for FY26 (revenue of $837-million and EBITDA of $83-million), with potential upside coming from any new contracts that come from the increased Canadian defence budget. For these reasons, after accounting for the acquisition of InField, we have increased our FY26 estimates to revenue of $850-million and EBITDA of $87-million.”

“GY continues to review non-core assets outside its primary verticals (defence, space, healthcare and energy) and expects activity in early 2026, with an update likely alongside 1Q results in mid-February. Non-defence ITCS-related commercial units (eg Computex) remain our top divestment candidates, along with other smaller businesses (noted as less than 10 per cent of revenue). Within ITCS, CGY took decisive action in 4Q to refocus on core markets and reduce resources/ costs, positioning for positive EBITDA in FY26. From a balance sheet perspective, CGY is well-placed, with leverage forecast to end FY26 at only 1.0 times — well below its 2.5 times target —providing ample capacity for M&A.”

Maintaining a “buy” rating for Calian shares, Mr. Poirier increased his target to $66 from $59. The current average is $60.

Elsewhere, others making target adjustments include:

* Ventum Financial’s Rob Goff to $62 from $58 with a “buy” rating.

“The better-than-expected Q4/F25 results and ongoing backlog growth suggest upside to our F2026 EBITDA,” said Mr. Goff. “We believe the strength and sustainability of opportunity for Calian from increased military spending domestically and across NATO are discounted in current forecasts and valuations.

“We believe Calian’s Q4/F25 marks an inflection point in the business following two underperforming quarters.

* Canaccord Genuity’s Doug Taylor to $63 from $60 with a “buy” rating.

“Calian reported a Q4 beat as its defence exposure powers a return to organic growth. Given the expectation of the Canadian government accelerating its procurement decisions, as previewed by the recent $81.8-billion defence budget increase, we see a strong backdrop for the coming years. To that end, management provided an initial FY26 outlook for double-digit revenue and EBITDA growth, as it laps easier ITCS comps, benefits from recent M&A, and allows the groundswell of defence spending to shine through. With better visibility to overall growth, we reaffirm our BUY recommendation, raise our TP,” said Mr. Taylor.

* RBC’s Paul Treiber to $66 from $58 with an “outperform” rating.

“Q4 adj. EBITDA exceeded RBC/consensus, as organic growth returned positive and profitability improved. Calian’s FY26 outlook is conservative (excludes new defence wins and unannounced M&A), but still calls for double-digit revenue and adj. EBITDA growth. Maintain Outperform, given the stock’s discounted valuation, Calian’s track record of compounding capital and the potential for stronger organic growth due to increased defence spending,” said Mr. Treiber.

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After hosting investor meetings with a pair of its executives in Montreal on Wednesday, RBC Dominion Securities analyst Irene Nattel sees a “rosier” outlook for Maple Leaf Foods Inc. (MFI-T) with it “emerging from period of significant capital investment, peak leverage, and dislocated pork markets.”

“With the spin-off of CPKR in the rearview mirror, focus now squarely on growing/leveraging branded CPG business, re-accelerating margin expansion, and leaning into balance sheet optionality/return of capital to shareholders,” she said. “The road from here to there is inevitably bumpy, but we reiterate our view that MFI is emerging as a more agile, purpose-driven company. In our view key to valuation re-rating remains improving/more consistent earnings growth/accelerating return of capital.”

Ms. Nattel said Toronto-based Maple Leaf reached “a critical positive inflection point” in free cash flow generation in 2024 with an acceleration in 2025.

“Looking ahead through 2026/27, post the Canada Packers spin, we see improving FCF driven by a combination of i) rising EBITDA, ii) moderating capex, and iii) optimized capital structure, which should provide support to the valuation,” she added.

“Following the spin-off of Canada Packers, MFI has emerged as a focused, purpose-driven company dedicated to executing its growth strategy in value-added and branded product portfolio. With a clear vision to become the Most Sustainable Protein Company on Earth, MFI appears uniquely positioned to meet the growing global demand for sustainably produced protein. This enhanced focus enables MFI to dedicate its resources and expertise to driving innovation, profitability, and shared value creation for its stakeholders.”

Ms. Nattel has an “outperform” rating and $33 target for Maple Leaf shares. The average is $36.79.

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In other analyst actions:

* ATB Capital Markets’ Tim Monachello raised his CES Energy Solutions Corp. (CEU-T) target to $14, exceeding the $12.70 average, from $12 with an “outperform” rating.

“On November 26, 2025, ATB Capital Markets hosted Ken Zinger, President & CEO, and Anthony (Tony) Aulicino, CFO, for a desk presentation. The conversation highlighted the significance of the growth opportunities CEU is tracking for 2026 and beyond,” said Mr. Monachello. “Most notably, we believe CEU’s recent success in the offshore Gulf of Mexico production chemicals market has provided entry to previously unavailable opportunities in both the Gulf and in high-margin onshore production chemicals applications in the Canadian heavy/thermal oil market and scale opportunities in the US onshore production chemicals market, including a recent RFP win (announced with Q3/25 results) that management expected to contribute up to roughly 10% y/y EBITDA growth in 2026. In addition, CEU highlighted significant market share gains in U.S. gas basins in 2025 where drilling fluids revenue intensity is meaningfully higher than in oil basins, with visibility to additional gains through year-end and into 2026. Overall, management believes it is facing among the most optimistic growth outlooks in company history.”

“We maintain our Outperform rating, and continue to believe CEU is well positioned for meaningful growth over the coming years as it penetrates new markets and expands margins.”

* In response to better-than-anticipated third-quarter results, Ventum Financial’s Rob Goff raised his target for Happy Belly Food Group Inc. (HBFG-CN) to $2.40 from $2.25 with a “buy” rating, believing outperformance “reflected strong execution as pipeline commitments move to deployments and financial contribution.”

“Results support continued execution strength and financial momentum,” he added. “Baseline forecasts are modestly upgraded with the quarterly beat. The double-digit SSR growth is particularly important.

“With HBFG’s recent announcement of its first U.S.-based Rosie’s Burgers in Texas, it is working with the same multi-unit franchise partners who recently secured Heal Wellness’s first U.S. location. Establishing a successful launch into the U.S. market would increase the prospects for a recalibration of our baseline forecasts, and a potentially redefining opportunity – one that would warrant a positive revaluation.”

* In a report released Thursday titled What Defence-Tech Looks Like, Stifel’s Greg MacDonald initiated coverage of Toronto-based Volatus Aerospace Inc. (FLT-X) with a “buy” rating and 85-cent target.

“Our macro thesis defines defence-tech as industry disruption enabled by Silicon Valley best-practices, driving operational leverage at scale and pace,” he said. “In our view, Volatus Aerospace meets this definition. Our investment thesis for FLT is informed by three points: (1) progressive Canadian drone regulation allowed FLT to gain early/scarce expertise in beyond visual line of sight (BVLOS) piloting; (2) FLT’s operations center, FLYTE software and AI-driven client solutions enable a highly scalable ‘drone-in-a-box’ operating model – a global competitive advantage; and (3) FLT’s strengths are strategically positioned within a 14-per-cent CAGR TAM [compound annual growth rate total addressable market]. FLT’s $647 million backlog demonstrates the commercial proof point of its product offering and de-risks the stock as investors are inclined to fund growth in hand. We are initiating coverage of Volatus Aerospace (FLT) with a BUY rating and $0.85 target price – we believe FLT should be a core holding for the NATO+ defence spending theme.”