Inside the Market’s roundup of some of today’s key analyst actions
Expecting Aritzia Inc. (ATZ-T) to deliver “strong” third-quarter fiscal 2026 financial results on Thursday after the bell, Stifel analyst Martin Landry acknowledges the clothing retailer’s shares “already reflect high expectations,” however he remains “comfortable” with its valuation until “momentum abates.”
“Aritzia has significant momentum currently as its products are well received by customers, the company has ample inventory to support heightened demand and digital marketing investments are paying off,” he said. “Comparable sales have grown at a pace of more than 18 per cent in the last three quarters, and we expect the momentum to accelerate for Q3FY26.”
“In October 2022, at the company’s investor day, management established a four-year plan, which called for revenues to reach $3.5- to $3.9-billion by FY27 and for EBITDA margin to stand at 19 per cent. Given the missteps that occurred in FY24, investors became skeptical on the company’s ability to hit the targets discussed at the investor day. However, with the recent sales performance and margin recovery, these targets now appear more realistic and attainable. As we get more visibility on these targets, earnings estimates should increase.”
Mr. Landry raised his quarterly earnings per share projection by 20 cent to $1.02, exceeding the Street’s expectation of 86 cents driven by comparable sales growth of 23.9 per cent (versus the consensus of 18.7 per cent). That’s an earnings gain of 43-per-cent year-over-year, driven by sales and margins expansion.
“Aritzia has had an exceptional fall with the long awaited launch of its first ever mobile app,” he said. “This launch in early November stimulated sales and resulted in observed sales by Bloomberg Second Measure in the United-States to double year-over-year. While strong revenues are already expected in-light of the available credit/debit card data, earnings could surprise to the upside.”
In a client note released before the bell, Mr. Landry said Aritzia shares may have further room for growth after gaining 103 per cent over the last 12 months, noting “some investors wonder if they missed the boat.”
His bullish thesis centred on four factors.
* An “impressive” operational performance
Analyst: “ATZ’s performance improved significantly in the last year with year-over-year sales growth increasing 3 times on a trailing twelve months basis from 10 per cent a year ago to 33 per cent expected with the Q3FY26 results. According to Bloomberg, Aritzia is among the top three fastest growing apparel retailers in North America currently. It is difficult to assess how long Aritzia can stay amongst the fastest growing retailers, but momentum could last given the classic nature of products sold and still rising brand awareness.”
* “While valuation appears rich, FY27 consensus is too low.”
Analyst: “Valuation has expanded in the last year, from 22 times forward P/E [price-to-earnings] to 32 times currently based on consensus estimates. However, given ATZ’s rapid growth, estimates need to play catch-up to reflect current trends and we believe that consensus is too low for FY27 at $3.57. Our FY27 EPS estimate stands at $4.01.”
3. Its growing market capitalization is “opening a broader pool of investors.”
Analyst: “Aritzia’s market capitalization has more than doubled from $6-billion a year ago to $13.5-billion currently. With this larger market capitalization, Aritzia has graduated into the large capitalizations in Canada and globally which increases the pool of investors that can invest in the company.”
4. An “improving” balance sheet.
Analyst: “We forecast that Aritzia’s cash balance will reach $360 million in Q3FY26, up from $124 million a year ago. The company does not have any bank debt providing management with flexibility to return capital to shareholders or to accelerate investments.”
With his higher estimates, Mr. Landry hiked his 12-month target for the company’s shares to $132 from $100 also believing it “appears to have performed well leading up to Christmas.” The average target on the Street is $120.09, according to LSEG data.
RBC Dominion Securities analyst Darko Mihelic has a positive outlook for Canadian banks in 2026, seeing “potential upside to earnings power and valuation for the group in an improved economic environment as trade negotiations conclude, which could result in higher loan growth, credit normalization, and continued strength in capital markets and wealth.”
“In a lower interest rate environment in 2026 versus 2025, the large Canadian banks we cover expect muted GDP growth and elevated unemployment in Canada – but with constructive equity/capital markets we see solid earnings growth. RBC Economics forecasts suggest the Bank of Canada (BoC) will maintain rates while the U.S. Federal Reserve will cut rates in 2026 – we see net interest margin (NIM) stability / increases with a potential for higher loan growth in H2/26,” he added.
“We believe mortgage renewal shock will be modest and therefore supportive to bank NIMs as renewal rates will likely hover in the 90-per-cent range for the group . We believe mortgage payment shock risks have somewhat subsided as the BoC policy rate has fallen to 2.25 per cent today versus the most recent peak of 5.00 per cent, and average monthly payment shocks for 2026 of $106-200 per month were down from the peak of $800 for our covered Canadian banks that have disclosed this information.”
In a report previewing the firm’s annual Canadian Bank CEO Conference on Tuesday, Mr. Mihelic said he is modelling lower pre-provision pre-tax (PPPT) growth in 2026 mainly “due to lower (more conservative) revenue/loan growth and smaller NIM expansion for the large Canadian banks relative to 2025.”
“We expect median core EPS growth of about 10 per cent for the large Canadian lifecos we cover in 2025, in line with actual results for the large Canadian banks in our coverage,” he said. “The large Canadian lifecos have also performed well with a median share price return of 23 per cent year-to-date in calendar year 2025. We believe an improved economic environment will also benefit the lifecos as strong equity markets performance typically leads to assets under management (AUM) growth, increased investment earnings, and higher earnings on surplus, which could support core earnings upside for the group.”
Mr. Mihelic made a pair of target changes to stocks in his coverage universe:
Canadian Imperial Bank of Commerce (CM-T) to $134 from $131 with an “outperform” rating. The average target is $127.23.Toronto-Dominion Bank (TD-T) to $133 from $128 with an “outperform” rating. Average: $125.91.
“We see more potential core earnings / valuation upside for CM (lower risk profile, solid organic RWA generation and RORWA) and TD (highest capital return but remains well-capitalized) versus the rest of the bank group unless there is a meaningful change / shift in paradigm,” he explained.
His other ratings and targets are:
Bank of Montreal (BMO-T) with a “sector perform” rating with a $178 target. Average: $184.21.Bank of Nova Scotia (BNS-T) with a “sector perform” rating with a $97 target. Average: $100.89.EQB Inc. (EQB-T) with an “outperform” rating with a $111 target. Average: $99.79.Great-West Lifeco Inc. (GWO-T) with a “sector perform” rating with a $60 target. Average: $61.67.IA Financial Corp. Inc. (IAG-T) with a “sector perform” rating with a $167 target. Average: $168.40.Laurentian Bank of Canada (LB-T) with a “sector perform” rating with a $40 target. Average: $40.37.Manulife Financial Corp. (MFC-T) with an “outperform” rating with a $52 target. Average: $55.03.National Bank of Canada (NA-T) with a “sector perform” rating with a $163 target. Average: $169.50.Sagicor Financial Co. Ltd. (SFC-T) with an “outperform” rating with a $10 target. Average: $11.19.Sun Life Financial Inc. (SLF-T) with a “sector perform” rating and $84 target. Average: $91.28.
“Our top stock picks are CM and TD for the large Canadian banks, MFC for the Canadian lifecos, and EQB overall,” said Mr. Mihelic.
RBC Dominion Securities analyst Bart Dziarski thinks ECN Capital Corp.’s (ECN-T) deal to be acquired by an investor group led by private equity fund Warburg Pincus LLC in an all-cash transaction valuing the common shares at $3.10 “appropriately reflects [its] asset-light business model and scale.”
“With shareholder support in place and expected closing in H1/26, we expect shares to trade tightly around the deal value pending completion,” he added.
The deal to be taken private in an all-cash transaction was announced on Nov. 13 and represented a 13-per-cent premium to the unaffected close and a 12-per-cent premium to ECN’s 10-day volume-weighted average price (VWAP). It has been unanimously approved by the Board and Special Committee.
Mr. Dziarski thinks the buyers were “attracted to ECN’s asset-light platform with durable funding partner relationships (e.g. Blackstone, Carlyle, NY Life, JPM Investment Management)” and sees the transaction as an “attractive shareholder outcome supported by strong execution track record.”
“Management highlighted that the transaction caps a multi-year transformation toward an asset-light, capital-efficient business model and follows a history of value creation since the 2016 separation from Element Financial, including the successful acquisition and monetization of Service Finance,” he explained. “The transaction implies more than 200-per-cent total shareholder return since the spin-out and allows shareholders to crystallize value amid a more uncertain macro and funding backdrop for specialty finance.
“Fairness opinion supports valuation and our target multiple. In support of the transaction, CIBC delivered a fairness opinion based on precedent transaction and DCF analysis. For precedent transactions, CIBC reviewed elected North American credit origination M&A transactions and applied a 9.5-11.5 times LTM P/E [last 12-month price-to-earnings] range for ECN, concluding that the $3.10 consideration is fair. The implied multiple is aligned with our target multiple.”
Maintaining his “sector perform” recommendation, Mr. Dziarski lowered his target to $3.10 from $3.25. The average is currently $3.12.
“We rate ECN Sector Perform as we believe current valuation appropriately reflects the company’s growth outlook. ECN has largely completed its simplification efforts which began in 2017 and has now simplified its business down to two operating verticals: i) Manufactured Housing and ii) RV/Marine. Despite strong origination growth in both verticals in 2025, we are cautious around consumer demand in 2026 and beyond,” he said.
Desjardins Securities analyst Amanda Lewis sees Champion Iron Ltd.’s (CIA-T) planned US$289-million acquisition of Norwegian iron ore producer Rana Gruber ASA providing “production growth in a top-tier jurisdiction that aligns with its focus on high-quality iron ore production to decarbonize steel making.”
“The acquisition is well-timed to provide near-term growth and an opportunity for another DR-quality upgrade project at Rana Gruber as the Bloom Lake DRPF project wraps up and Kami progresses through studies and permitting requiring minimal investment,” she said. “Rana Gruber has been producing iron ore since the 1960s and supplying iron ore to European steel mills. We expect Champion to benefit from Rana Gruber’s established customer relationships as Champion looks to increase its sales volume in Europe, North Africa and the Middle East—all high-growth jurisdictions for the DRI/EAF market. Both Bloom Lake and Rana Gruber’s operations have low carbon intensities, benefiting from access to hydropower, which positions the operations well as the EU’s Carbon Border Adjustment Mechanism comes into full effect in 2026.”
After updating her model for the Montreal-based company to reflect the deal, which was announced on Dec. 21 and expected to close in the second quarter, as well as sales assumptions for Bloom Lake mining complex in the Labrador Trough, Ms. Lewis’s net asset value per share estimate increased 10 per cent to $5.19 (from $4.70), while her EBITDA projection for the next 12 months increased 5 per cent to $940-million (from $894-million).
“We have now updated our model to include Rana Gruber’s operation and added the cash, equity and debt financing,” she added. “Our model assumptions for Rana Gruber are outlined on the following page and result in an NAV value for Rana Gruber’s operation of $437-million (80 cents per share). The transaction will be financed with US$39-million cash, a US$100-million private placement with La Caisse de dépôt and a US$150-million term loan. The deal is accretive, based on our estimates, boosting our NAVPS and EPS from 2026 onward.”
Reaffirming her “buy” rating for Champion shares, the analyst bumped her target to $7 from $6, exceeding the $5.97 average.
National Bank Financial analyst Mohamed Sidibé sees an increased to Denison Mines Corp.’s (DML-T) capital expenditure budget for 2026 largely covered by its current balance as it appears poised to make a final investment decision and begin construction on its 95-per-cent owned Phoenix in-situ recovery (ISU) project at Wheeler River in Northern Saskatchewan.
On Friday, Toronto-based Denison increased its post-FID initial capital cost estimate for Phoenix to $600-million, which is 43 per cent above the prior estimate of $419-million. The company said Phoenix is ready to become the first new large-scale uranium mine built in Canada since Cigar Lake, with first production expected by mid-2028.
“This sums up to a total remaining spend of $653-million from November 30, 2025 vs. our prior remaining spend of $412-million, or a 58-per-cent increase,” said Mr. Sidibé. “Including other corporate cash needs and the latest capital cost update, we now estimate a total cash outflow from Q4/25 to H1/28 of $771-million (100-per-cent basis) which compares to our prior remaining spend of $530-million or a 45-per-cent increase. Inflationary adjustments represented approximately 45 per cent of the $181-million increase, with project refinements (larger diameter wells) and improved estimation precision representing the remainder. No further adjustments to the project capex are expected prior to commencement of construction, with significant progress made on long-lead procurement and advanced negotiations on key construction packages. First production remains targeted for mid-2028, assuming approvals are received in Q1/26 in line with our current model.”
The analyst reduced his net asset value assumption for Denison by 4 per cent to $3.47 per share from $3.61 with our Phoenix ISR project discounted cash flow analysis using an 8-per-cent discount rate (DCF8%) decreasing to $1.66-billion from $1.81-billion at our price deck.
“Using a base uranium price of US$86/lb, we calculate an after-tax DCF8% of $1.72-billion ($1.84-billion prior) below the company’s estimate of $1.94-billion on a 100-per-cent basis largely driven by our higher operating costs (already previously modelled) vs. the 2023 FS [feasibility study],” he added.
“Overall, we view the update as a positive step towards the start of construction at Phoenix following the completion of the CNSC hearings in December 2025.”
Keeping his “outperform” rating for Denison shares, Mr. Sidibé trimmed his target to $4.85 from $5.00 to reflect the higher capital cost and a $42-million funding gap tied to other corporate needs that we expect to be addressed via a $50-million equity raise. The average on the Street is $4.48.
RBC Dominion Securities analyst Nelson Ng increased his earnings expectations for Methanex Corp. (MEOH-Q, MX-T) through fiscal 2027, reaffirming his forecast for “robust cash flows driven by the run-rate contribution from the OCI asset acquisition at current methanol prices, with upside potential should prices move higher.”
“We continue to believe the company should make sufficient progress on deleveraging to enable share buybacks beginning in H2/26,” he added.
In a client report, Mr. Ng moved his adjusted earnings per share projections for 2026 and 2027 to US$2.92 and US$4.27, respectively, from US$2.18 and US$3.48 after updating his model to incorporate several recent developments including a potential one-month outage at its Chilean facilities following a Dec. 19 pipeline fire at ENAP’s Posesión natural gas plant in
Magallanes, Chile, which could lead its facilities in the country offline through the middle of January, as well as its recently released reference prices and Chemical Markets Analytics’ updated outlook forecasting higher methanol prices through 2028.”
“Methanex recently released its monthly non-discounted methanol reference prices for January, increasing its North America and China reference prices to $851 per metric ton (up 6 per cent) and $330/MT (up 3 per cent), respectively, while keeping its Asian reference price unchanged at $360/MT. Methanex also released its European non-discounted methanol reference price for Q1/26 at €535/MT, which was unchanged from Q4/25.
“CMA forecasts higher methanol prices. CMA forecast tightening near-term supply and strengthening long-term demand fundamentals. On the supply side, there has been some near-term natural gas curtailments in Trinidad (mid-80-per-cent operating rates), Iran (90 per cent of units shut down due to seasonal restrictions), and Southwest China (through Q1/26) are constraining global production and export availability. There is also a Chilean production
disruption that is tightening regional supply. On the demand side, CMA projects improvement starting in late 2026 and accelerating through 2027-2028, driven by significant MTO unit ramp-ups in Asia, inventory restocking in the Americas, and a construction sector recovery supported by their anticipation for further Federal Reserve rate cuts.”
Despite his estimate increases, Mr. Ng reiterated a US$50 target with his “outperform” rating. The average on the Street is US$49.67.
“We maintain our Outperform rating, supported by our forecast of robust cash flows driven by the run-rate contribution from the OCI asset acquisition at current methanol prices, with upside potential should prices move higher,” he said.
In other analyst actions:
* CIBC’s Ty Collin raised his targets for Linamar Corp. (LNR-T) to $99 from $88 with an “outperformer” rating and Magna International Inc. (MGA-N, MG-T) to US$56 from US$50 with a “neutral” rating. He lowered his target on AutoCanada Inc. (ACQ-T) to $30 from $33 with an “outperformer” recommendation. The averages on the Street are $85.50, US$52.45 and $33, respectively.
“2026 is setting up to be another choppy year for the auto sector, but hopefully one in which some important questions will be answered as USMCA negotiations unfold,” Mr. Collin said.
“Production is expected to decline modestly, per S&P Global, making growth more challenging,” he added. “However, the suppliers enter 2026 in good shape fundamentally, and we believe they are well positioned to navigate near-term volatility and benefit from emerging opportunities.”
“Bigger picture, the group continues to trade at reasonable valuations on cyclically low earnings, and we see additional upside when industry conditions normalize.”