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

After a noteworthy second-quarter earnings season for Canadian telecommunications giants, National Bank Financial analyst Adam Shine thinks investor focus now centres on whether “wireless discipline will persist through back-to-school.”

“It was a busy period with 1) changing narratives for BCE and Rogers or at least some improvements in relative investor perceptions of each and recoveries from their multi-year lows set early in April, 2) muted necessitated adjustments to 2Q estimates for the Big 3 in contrast to more material revisions required in previews over the prior several quarters, 3) deal news covered Sovereign AI initiatives, new partnerships, and closings of key transactions initiated in 2024, 4) wireless saw more discipline exhibited at the end of June and so far in 3Q, and 5) Ottawa passed on overturning CRTC decisions on TPIA (Third-Party Internet Access) to the disappointment of all in the sector ex-Telus,” he said.

In a research report released Tuesday, Mr. Shine made a pair of rating revisions, upgrading Quebecor Inc. (QBR.B-T) to “outperform” from “sector perform” and downgraded Cogeco Communications Inc. (CCA-T) to “sector perform” from “outperform” previously.

“Why the rating changes? Since our downgrade of Quebecor, we raised our target from a prior $38 which got breached in early April and prompted the rating change then,” said Mr. Shine. “The stock pulled back as expected heading into and after 2Q reporting. With more industry discipline now in wireless and a recent renewal of its NCIB which should remain active, we think momentum can return to the stock as it continues to make progress with its strategy outside of Quebec.

“As for Cogeco, growth is proving a struggle. U.S. cable peers saw multiples compress post-2Q and this warranted a contraction in our Breezeline multiple. Ottawa’s decision not to change the CRTC’s mutated TPIA regime allows Telus to push a bundle in Central Canada which may not only undermine Cogeco’s return on network expansion investments already made in Quebec and ongoing in Ontario, but also creates implications for its MVNO launch in its cable footprint which will face added competition from Telus that wasn’t previously contemplated. To reflect this, we opted to trim the Canadian multiple in Cogeco’s NAV. In our DCF, we also reduced the terminal growth rate.”

The analyst dropped his target for Cogeco Communications shares to $69 from $80. The average target on the Street is $75.10, according to LSEG data.

His Quebecor target remains $42. The average is $42.33.

His ratings and targets for other stocks in the sector are:

BCE Inc. (BCE-T) with an “outperform” rating and $35 target. Average: $34.47.Rogers Communications Inc. (RCI.B-T) with an “outperform” rating and $59 target. Average: $54.50.Telus Corp. (T-T) with a “sector perform” rating and $23 target. Average: $22.89.

=====

Following Monday’s release of better-than-expected second-quarter production and sales volumes alongside lower-than-expected cash costs driven by optimization initiatives, National Bank Financial analyst Mohamed Sidibé raised his recommendation for Lithium Argentina AG (LAR-N, LAR-T) to “outperform” from “sector perform” previously, seeing continuing to “deliver strong operational performance” during the ramp-up phase at its Caucharí-Olaroz project.

TSX-listed shares of the company, which moved its corporate headquarters to Switzerland from Vancouver in January, soared 30.9 per cent after it earnings per share loss of 3 US cents, a penny better than the Street’s expectation, alongside stronger-than-anticipated production results, higher-than-expected realized pricing and an operating cost reduction of 8 per cent from the first quarter and 14 per cent year-over-year.

Lithium Argentinas also benefited come a sector-wide surge on Monday after Chinese battery giant Contemporary Amperex Technology (CATL) halted output at a major mine, raising hopes it would erode the oversupply in a market grappling with soft demand.

“These improvements suggest that the asset is tracking ahead of expectations on cost control, thus moving forward the expectation of profitability vs. prior estimates,” said Mr. Sidibé. “In this tightening market, LAR offers the highest leverage to lithium prices within our coverage universe (excluding American Lithium), with an asset that is delivering production at costs of $6,700 per ton LCE, well below spot prices currently at $10,500/t – a key catalyst we were looking for prior to revisiting our thesis.

“Despite the realized pricing still impacted by taxes and additional processing costs of $2,000/t, LAR is now well positioned to deliver positive FCF in H2/25 and 2026 at Caucharí-Olaroz at these current spot prices which have rallied on the back of supply curtailments in China.”

With updates to his financial projections, including lower cash costs, Mr. Sidibé hiked his target for the company’s U.S.-listed shares to US$4.50 from US$2.90. The average target on the Street is US$4.14.

“Given the recent rally in lithium equities prices, we are also updating our equity financing pricing assumption for LAR to $3.50 per share from $1.95 per share to reflect current levels,” he added. “This drives the bulk of our NAV increase of 26 per cent to $5.00 per share with the remainder driven by better costs modelled at Caucharí-Olaroz over the medium and long term. We increase our NAV target multiple on the company to 1.00 times NAV from 0.80 times NAV as the company continues to derisk its ramp-up with solid operating results. Additional upside is expected to be delineated via the regional development plan with its partner Ganfeng Lithium.”

=====

TD Cowen analyst Derick Ma thinks the M&A pipeline for Franco-Nevada Corp. (FNV-N, FNV-T) “remains strong” with the miner “well-positioned from a liquidity and cash-flow standpoint to continue to be acquisitive and add GEOs growth in the current deal environment.”

He also sees the Toronto-based company trending toward the higher end of its guidance following stronger-than-anticipated second-quarter results. Its TSX-listed shares rose 2.6 per cent on Monday after it reported quarterly adjusted earnings per share of $1.24, exceeding Mr. Ma’s estimate by 7 cents and the consensus projection on the Street by 13 cents.

“Management stated on its conference call that there are no capital constraints on the organization when assessing new deals,” he said. “For new opportunities, FNV is focused on long life, precious metal assets in the current commodity price environment and stated there is a ‘very healthy pipeline’ of producing and development opportunities. In spite of recent deal execution success, we believe that FNV is well-positioned in terms of liquidity and cash flow generation to support further growth.

“$1.1-billion of available liquidity at quarter end. As at June 30, FNV had $160-million in cash and its $1-billion revolving credit facility (RCF) was completely undrawn (less $48-million of standby letter of credits to the CRA). After the quarter, FNV withdrew $175-million from the RCF to fund the acquisition of the 1.0-per-cent NSR royalty on Arthur. As at August 11, the available balance on the RCF was $776.6-milllion. We estimate FNV could generate operating cash flows in the range of $300-$350-million per quarter at current commodity prices.”

After “modest” adjustments to his forecast, Mr. Ma raised his target for Franco-Nevada shares to US$184 from US$182 with a “hold” rating.

“Franco-Nevada’s management team has a proven track record of success and its asset portfolio offers moderate GEOs organic growth over the medium term; however, the long-term growth outlook remains modest. Uncertainties over the potential restart and timing of Cobre Panama continue to overhang FNV’s cornerstone asset,” he concluded.

Elsewhere, Scotia’s Tanya Jakusconek raised her target to US$184 from US$182 with a “sector perform” rating.

=====

In a client report titled Fighting the good fight, Desjardins Securities’ Alexander Leon thinks the nearly 32-per-cent drop in the price of Dream Impact Trust (MPCT.UN-T) units since it reported largely in-line second-quarter results on Aug. 5 is “unwarranted.”

However, while noting the 88-per-cent discount to its net asset value appears “attractive,” the equity warned: “(1) the multifamily portfolio has yet to reach a stabilized level that is sufficient to support headwinds from the commercial segment and its elevated leverage profile; and (2) we fail to see any material near-term catalysts that would move the stock higher.”

After reducing his earnings expectations through 2026, Mr. Leon cut his target for units of the Toronto-based REIT, which focuses on multi-family rental housing, to $3.75 from $5.25 with a “hold” rating to reflect a lower valuation multiple.

=====

Desjardins Securities analyst Brent Stadler sees Hydro One Ltd. (H-T) as a “set and forget” investment option, calling it a “top defensive pick with strong growth outlook” ahead of Wednesday’s release of its second-quarter financial results.

“Along with 2Q results, we will look for an update on the nine transmission projects, additional growth opportunities from Ontario’s recent IEP and potential benefits from the federal government’s goal of turning Canada into an energy superpower,” he said. “We continue to believe H is a high-quality defensive play, with best-in-class growth and strong visibility to longer-term opportunities that investors should be willing to pay a premium for.”

In a note released before the bell, Mr. Stadler raised his quarterly earnings per share forecast by 4 cents to 53 cents, exceeding the consensus projection of 51 cents, to “better reflect organic rate base growth and strong peak power demand.”

“We have also recalibrated our 2H25 estimates for seasonality, including sharing of over-earnings with rate payers in 4Q25,” he said.

“What to watch for in 2Q25. (1) An update on the nine transmission lines that H plans to bring online through 2032, including updates on nearer-term projects such as the $472-million St. Clair and $1.2-billion Waasigan transmission lines. (2) Incremental transmission projects that H could be awarded from the Ministry of Energy’s integrated energy plan (IEP), providing an outlook to 2050; this includes the Greenstone and Bowmanville-toGTA transmission line projects, both of which could be in service in the early 2030s and could be additive to JRAP 2028. (3) Potential transmission opportunities based on the federal government’s desire to turn Canada into an energy superpower. (4) Updates or commentary on progress related to the OEB’s generic rate filing process and the possible effect on H’s equity thickness and ROE (the OEB’s decision to increase OPG’s equity thickness to 45 per cent has a positive readthrough, in our view). Recall we expect H to file JRAP 2028 in fall 2026, with resolution in 1H27.”

While he also raised his full-year earnings expectation, Mr. Stadler maintained a $58 target and “buy” rating for Hydro One shares. The average is $49.82.

=====

In other analyst actions:

* In a report released Tuesday titled Strategic positioning in the uranium renaissance, Stifel’s Madison Tapscott initiated coverage of IsoEnergy Ltd. (ISO-T) with a “buy” rating and $22 target, exceeding the $21.31 average on the Street.

“We view IsoEnergy as a differentiated uranium company that offers investors a rare combination of near-term U.S. production and high-grade Canadian exploration upside. With strategic infrastructure in place and fully permitted, the Tony M mine in Utah represents, in our view, a low capex, near-term production opportunity well positioned to capitalize on favourable U.S. policy tailwinds. Additionally, IsoEnergy’s Hurricane deposit, which is one of the highest-grade published indicated undeveloped uranium deposits in the Athabasca Basin, has strategic proximity to existing mills and infrastructure and is increasingly important amid regional consolidation pressure. We believe de-risking of near-term production potential in the U.S., U.S. policy tailwinds related to uranium, regional consolidation pressure in the Athabasca and exploration opportunities are key elements that make IsoEnergy poised for a valuation re-rate.”

* Jefferies’ Samad Samana downgraded Open Text Corp. (OTEX-Q, OTEX-T) to “hold” from “buy” and reduced his target to US$33 from US$35. The average target on the Street is US$34.37.

* JP Morgan’s Michael Cyprys raised his Brookfield Corp. (BN-N, BN-T) target to US$73 from US$70 with an “overweight” rating. The average is US$71.86.

* National Bank’s Matt Kornack raised his target for Dream Office REIT (D.UN-T) to $17 from $16.50 with a “sector perform” rating, while Scotia’s Mario Saric increased his target to $18 from $17.50 with a “sector perform” rating. The average is $17.17. The average is $17.17.

“There were some puts and takes in Q2 for Dream Office as the REIT saw committed occupancy increase as it aggressively targets new and renewal leasing in a competitive office environment with long leasing lead times,” said Mr. Kornack. “In-place figures, however, declined, so the benefit of recent success won’t be felt for a few quarters. Rent spreads were also muted across the portfolio with elevated leasing costs, which will impact the potential for growth. For the remainder of the year, the REIT’s sole U.S. property could have an impact on leasing and earnings but is subject to a dual process of leasing / sale. While office fundamentals are stabilizing, the current situation remains challenging, which is pressuring valuations with D’s leverage remaining on the high side.”

* Mr. Kornack trimmed his SmartStop Self Storage REIT (SMA-N) target to US$40 from US$40.50 with an “outperform” rating. The average is US$40.30.

“Aside from some IPO related noise, Q2 results were a bit light on NOI (ops were finicky in the quarter with some months tracking well and others underperforming expectations). Nonetheless, this was neutralized by better than forecast contributions from the managed REIT platform and lower G&A (after adjusting for one-time costs) with in-line net interest expense. Guidance on revenues and NOI was tightened but on average maintained with a slight improvement on the mid-point for FFO/unit. Performance so far in Q3 has been encouraging, with easier prior year comps from an SP standpoint for H2/25,” said Mr. Kornack.

* Scotia’s Mario Saric trimmed his Killam Apartment REIT (KMP.UN-T) target to $20.50 from $20.75 with a “sector outperform” rating. The average is $21.73.

“Our SO rating is intact as recent unit price pressure = our modest estimate revisions , maintaining our NTM [next 12-month] total return at 19 per cent (from 19 per cent at our May 27th upgrade),” said Mr. Saric. “KMP initially responded absolutely and relatively quite well to the IIP privatization news but has since given back both absolute and relative gains, mostly on broader weakening apartment sentiment, in our view. While there were some positives (beat, solid revenue growth KPIs) and negatives during Q2 (ironically, the biggest -ve surprise likely had to do with Office WFH) and CAD Apartment sentiment seems to have stalled, our intact SO rating is grounded in the following: 1) we think KMP ranks #1 on CAD Apartment blended rent growth and new lease spreads, 2) KMP still offers a good avg. PEG Ratio (2.7 vs. 2.9 for peers and Sector) at a relatively good Apartment balance sheet, 3) KMP still looks discounted vs. pre-COVID valuation despite most other KPIs looking better and 4) to the extent the CAD economy weakens materially, we think KMP offers the best Apartment REIT defence in our universe (i.e., Atlantic Canada posted +ve July job growth last Friday.”

* Mr. Saric raised his SmartCentres REIT (SRU.UN-T) target to $27.50 from $26.75 with a “sector perform” rating. The average is $27.28.

“We maintain our SP rating but possess a more constructive outlook on SRU for the following reasons: (1) Our positive 2026 estimated FFOPU/AFFOPU revisions imply back-to-back years of solid AFFOPU growth (expected lack thereof historically has been a concern of ours); resulting in a better PEG ratio of 2.9; (2) Asset dispositions seem more realistic and imminent (i.e., accretive de-levering); (3) SRU should be more immune to any CAD economic underperformance; and (4) #1 above may further shift the narrative away from concerns over distribution sustainability to questions over potential distribution growth, which the current 7.1-per-cent distribution yield (6th-highest in our universe; Nnot on investor radars today (not that we would recommend distribution growth, but that’s besides the point). Lastly, if and when the Toronto land market turns around (granted, not anytime soon), we think SRU is likely one of the biggest beneficiaries in our universe. All-in-all, combined with a solid valuation (12.9 times 2026E AFFO and 6.8-per-cent implied cap), we see more upside in SRU than previously (i.e., no longer just a distribution yield play),” he said.

* Scotia’s Tanya Jakusconek raised her Wheaton Precious Metals Corp. (WPM-N, WPM-T) target to US$109 from US$108 with a “sector outperform” rating. The average is US$108.07.