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

RBC Capital Markets analyst Tom Narayan is “constructive” on North American auto parts suppliers, including Canada’s Magna International Inc. (MGA-N, MG-T), following second-quarter earnings season.

“Q2 saw mostly beats and ’25 guidance raises for U.S. suppliers in our coverage,“ he said. ”On average, suppliers are up 12.5 per cent since reporting results and we remain buyers on strength. OEMs have been absorbing tariffs thus far and production forecasts have been going higher. The EV slowdown currently underway benefits U.S. OEMs as does a potential USMCA deal which could be more favorable to ones struck with the EU, Korea and Japan. We expect U.S. suppliers to benefit the most from these dynamics.”

In a research report released Friday, Mr. Narayan called European parts manufacturers a “mixed bag” and he’s taking a much more “cautious” view on pure-play electric vehicle manufacturers.

“Both Rivian and Lucid cut their ’25 guidance on macro issues,” he noted. “For Rivian specifically, regulatory credits are coming in below initial company expectations. Additionally, as we discussed (see report), we are increasingly more cautious on BEV sales in the US near term, especially considering the price spread between new and used BEVs vs new and used ICEs. Moreover, with consumer incentives expiring in September and loosening emissions regulations in the US more of a certainty, regulatory credit revenues are less certain. Finally, legacy OEMs are increasing their competitive positioning in the space. Notably, Ford recently announced (see report) it will be debuting an affordable, 4-door mid-size electric pickup priced at $30K in 2027. Legacy OEMs can utilize their ICE businesses to subsidize EV loss-making production. This could be a competitive problem for pure-play EV makers who need to reach volume levels to become profitable.”

For Aurora, Ont.-based Magna, Mr. Narayan thinks its scaled “provides advantage in vehicle electrification” and emphasized the benefits of its “complete systems approach.”

“Magna is one of the largest automotive suppliers globally and offers a wider range of components, systems, and complete vehicles than peers,” he said. “The company’s size and complete systems approach is more capital-efficient, allows it to be quicker to market, and provides a greater knowledge base across the vehicle, which we think should help the company in the transition to EVs.

“Magna has product capabilities that include body, chassis, exterior, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors, lighting, and roof systems. We think the company leads in breadth of product offering and this enables it to provide unique complete vehicle solutions that are unmatched by peers.”

Also touting its total addressable market and a portfolio that is “largely agnostic to propulsion system,” he raised his target for its shares to US$45 from US$38, keeping a “sector perform” rating. The average target on the Street is US$45.76, according to LSEG data.

“Magna raised its ’25 Adj. EBIT guidance to $2.226-billion (mid-point) from $2.185-billion (midpt) and Revenue to $41.2-billion (midpt) vs prior $40.8-billion (midpt),” he said. “Q2 margins came in at 5.5 per cent, well above our prior 4.7 per cent and Q1’s 3.5 per cent. Full year guidance is for 5.2-5.6 per cent, which implies an H2 margin uplift. Magna’s H2 segment margin guidance implies Seating at 4.9 per cent at the midpt vs 0.4 per cent in H1 and 6.8 per cent in H2 for P&V vs 3.8 per cent in H1. On the call, mgmt noted better commercial recoveries as a key reason for this upswing. We model to the lower end of the guidance range given the significant upshift needed to reach the guide midpt. The strong Q2 beat and ’25 raise causes us to raise our ‘25/’26 EBITDA estimates to $3.7-billion/$4.0-billion from $3.5-billion/$3.8-billion. As such, our PT moves up.”

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National Bank Financial analyst Mohamed Sidibé thinks “some of the nuclear ‘hype’ has been priced into the stock” of Cameco Corp. (CCO-T), however he thinks the full upside from its stake in Westinghouse Electric Co. is “not yet fully reflected” and sees “plenty of upside left.”

In November of 2023, Cameco and Brookfield Asset Management (BAM-T) completed the acquisition of Pennsylvania-based Westinghouse. Cameco now owns a 49-per-cent interest and Brookfield owns the remaining 51 per cent in Westinghouse, one of the world’s largest nuclear services businesses.

“Given the recent run-up in CCO’s share price following a positive guidance update at Westinghouse, which unearthed hidden potential that was underappreciated by both the street and ourselves, we are revisiting our valuation of the segment,“ said Mr. Sidibé. ”Recent media coverage around the settlement between Westinghouse and Korea also creates a timely opportunity to reassess what Westinghouse could be worth inside the portfolio.”

It has been reported South Korea’s state-run Korea Hydro & Nuclear Power Co. (KHNP) is in talks with Westinghouse to form a joint venture in the United States. That comes after KHNP secured a US$18.6-billion contract in June to build a pair nuclear power reactors in the Czech Republic, following the end of a lengthy dispute with KHNP and Korea Electric Power Corporation (KEPCO) over nuclear technology rights with Westinghouse.

“The partnership between Westinghouse, KEPCO and KHNP is truly remarkable specifically given its potential impact on near-term EBITDA (45-per-cent guidance increase in 2025),” said the analyst. “However, in line with our prior thinking, it remains the cherry on top with it representing 7 per cent of future new build segment revenue based on our assumptions (10 per cent in the upside case scenario).

“But it is important to caveat that our model only captures 35 per cent of the anticipated Korean opportunity set with no upside from future core business services synergies and opportunities that would arise from the partnership. Notably, we only model a total involvement in 20 reactors by KHNP, while recent Bloomberg articles highlighted that Korea was bidding on as much as 43 per cent of the 400 planned reactors. Our base case assumes a much lower total addressable market and no participation from Korean entities in the U.S. or Poland where we view as Westinghouse as the preferred option.”

Mr. Sidibé estimates the partnership could add almost $5 to Cameco’s share price by increasing his core services revenue growth assumption from 3 per cent to 5 per cent and a 14-per-cent rise in Westinghouse’s cash flow.

“Ultimately, we expect the partnership between the two entities to remain intact as it is beneficial to both parties despite recent media articles,” he added. “We view an ex-Korea case as unlikely at this time.”

Maintaining his “outperform” recommendation for Cameco shares, he raised his target to $115 from $110. The average target is $111.29.

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National Bank Financial analyst Vishal Shreedhar is expecting to see a moderation in food same-store growth for Empire Co. Ltd. (EMP.A-T) when it reports first-quarter 2026 financial results on Sept. 11 “reflecting the cycling of a boycott of Loblaw in May 2024.”

“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.

Mr. Shreedhar is currently projecting earnings per share for the quarter of 85 cents, down 6.2 per cent year-over-year (90 cents) and 7 cents below the consensus forecast, which he attributes to ” lower aggregate share of earnings from investments and Other income, higher SG&A (excluding D&A), higher D&A, higher interest expense and a higher tax rate, partly offset by positive Food Retailing (FR) sssg, new store openings and a higher gross margin rate.”

“We expect Q1/F26 FR sssg (excl. fuel) to moderate sequentially in part reflecting the cycling of a boycott of Loblaw in May 2024 (transient impact),” he added. “Beyond the quarter, we expect stronger sssg partly reflecting less pressure with cycling a boycott. Also, EMP first commented on improving basket size and declining promotional penetration in Q3/F25.

“Statistics Canada data until July 2025 suggests an average food store inflation rate of 3.2 per cent during Q1/F26 versus 2.0 per cent last year and 3.3 per cent in Q4/F25.”

Mr. Shreedhar added peer commentary “points to a continuation of themes from prior quarters,” noting: “Our review of peer commentary suggests: (i) An ongoing consumer focus on value, (ii) The Buy Canadian movement remains resilient, albeit there are suggestions that momentum is slowing, and (iii) Some indications that the impact of tariffs is becoming more pronounced.”

After modest adjustments to his forecast for the next two fiscal years, he reiterated his “sector perform” rating and $59 target for Empire shares. The average is $56.63.

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Following institutional investment meetings with Savaria Corp. (SIS-T) chief executive Sebastien Bourassa, Stifel analyst Justin Keywood sees its shares poise to re-rate higher, pointing to margin improvements and M&A potential.

“The company is near successfully complete Savaria One, a pursuit to improve EBITDA margins from approximately 15 per cent to 20 per cent, among other goals over two years,” he said. “Q2 EBITDA margins were 20.6 per cent, as guided and $925-million 2025 sales is close to the $1-billion goal. Savaria has a history of meeting ambitious goals and sets up well for Savaria 2.0, where further margin expansion and scale is expected to be conveyed in 1H/2026. An active M&A pipeline was also described, where good assets in the assisted lift sector could benefit from the operational excellence and automation, demonstrated with Savaria One, leading to wide synergies. Savaria’s balance sheet helps support M&A (1.3 times leverage) as FCF should torque up, with one-time fees dropping off in 26’.”

Mr. Keywood thinks the Laval, Que.-based accessibility solutions provider is “evaluating several targets in the assisted lift sector.”

“There are dealer/distributor assets in lifting direct sales and capturing additional margin in doing so,” he said. “This area of M&A is a balancing act and more of the tuck-in variety to not disrupt the broader 1k partner dealer network. Savaria is also pursuing assets where it has product gaps. E.g. commercial elevators for 3–6 floors, where it has products for 1–2 floors currently. There are also good assets that are perhaps family run but could benefit greatly from Savaria’s operational excellence, automation and global reach. There is attention to integration as well in reducing this period to 12–18 months vs. +3 years prior. We see M&A as a valuable pursuit in supporting new scale, organic growth and margin expansion. Savaria’s balance sheet (about 1.3 times leverage) with $275-million of available capacity helps support M&A with a target leverage ratio, below 2.5 times.”

Maintaining his “buy” rating, Mr. Keywood bumped his target to $25 from $24. The average is $25.79.

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In a research note titled Getting ready to ride the wave, Desjardins Securities analyst Benoit Poirier said he’s “increasingly confident” of a more battery contract wins for Kraken Robotics Inc. (PNG-X), predicting another order from U.S. defence technology company Anduril Industries is likely “the earliest candidate.”

“Kraken has a six-month window before 4Q results (March–April 2026), leaving ample time for incremental contract wins,” he said. “These awards should help offset any negative reaction to a potential guidance-related miss as investors are likely to stay focused on its longer-term potential rather than short-term timing issues. We thus see limited downside risk from a timing-driven guidance miss.”

Shares of the St. John’s-based company finished 3.5 per cent higher on Thursday despite concern over its decision to maintain its full-year guidance alongside the release of its quarterly results before the bell.

“With Singapore off the table, the year hinges on a few late-4Q KATFISH deliveries (lumpy profile as the complete KATFISH system typically sells for approximately $7-million),” said Mr. Poirier. “To remain prudent, we have trimmed our expectations as these Navy awards are historically prone to delays—we now forecast revenue of $118-million (was $124-million) and EBITDA of $27-million (was $30-million) in 2025.

“We are not overly concerned as batteries/Anduril remain the most important driver of the story, and these KATFISH deliveries should end up contributing in 2026–27. Kraken’s battery business grew by 26 per cent year-over-year in 2Q, representing its strongest quarter yet (likely from Anduril/Australia—a positive indication of the ramp-up of the Ghost Shark program). Management also noted: (1) that more XL AUV wins are expected in 2025; (2) the launch of a higher-energy battery later this year; and (3) a new subsea energy storage partner using Kraken batteries.”

While he reduced his revenue and earnings projections for both fiscal 2025 and 2026, Mr. Poirier raised his target for Kraken shares by $1 to $5, keeping a “buy” rating. The average is $4.25.

“We have updated our valuation to reflect 2027 projections, which we believe better capture Kraken’s true earnings potential,” he explained. “The new Dartmouth facility is expected to be fully ramped up by that time, bringing the battery business closer to its full capacity. That said, we remain conservative and are forecasting battery revenue of only $118-million in 2027—well below Kraken’s estimated total combined battery manufacturing capacity of $200–250-million.”

Elsewhere, Raymond James’ Steven Li bumped his target to $4 from $3.50 with an “outperform” rating.

“Defence spending signals remain very positive for PNG ($150-billion Defence Boost/ Reconciliation Bill + talks about NATO allies upping their defence spending target). With some extra juice on the battery side and Services doing better than expected (up 27-per-cent core organic, 3D up 20-per-cent organic), our confidence level in F2025 estimates is higher. Our model and target are tweaked higher as a result,” said Mr. Li.

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In other analyst actions:

* CIBC’s Stephanie Price raised her BCE Inc. (BCE-T) target to $36 from $35, exceeding the $34.93 average on the Street, with a “neutral” rating.