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

Five years after the emergence of COVID-19, Canada’s real estate industry is continuing to struggle to rebound, according to National Bank analysts Matt Kornack and Giuliano Thornhill, emphasizing “the shadow the pandemic has cast is long with winners during that time still feeling the impacts of supply launched in a zero interest rate environment while losers are rebounding off pandemic induced weakness.”

“The REIT index is up slightly year-to-date (approximately 1 per cnet vs. expected earnings growth of 5 per cent for our coverage) having posted fairly flat performance over the last two years but still well off 2020-2022 peak levels when the interest rate environment was more supportive and fundamentals (driven in part by strong demographic growth) were healthy,” they said.

In a research report released Monday, the analysts predict 2026 and 2027 are “still likely to be transition years” across the industry with investors expected to be “focused on signs of an inflection (positive or negative).”

“For apartments this may materialize as improving new leasing spreads, industrial a stabilization of market rent levels whereas on the other end of the spectrum for seniors it will hinge on whether rent can move higher as an offset to stabilizing occupancy and margin levels,” they said. “Retail, for what its worth, looks to have entered a period of longer-term modest growth while the office workout will stretch beyond our forecast period.

“At this point we don’t see 2026 as representing a material departure from 2025 from an operations standpoint albeit the macro remains far from certain (trade, politics, interest rates) and related sector allocations/funds flows will probably be bigger drivers of trading given relative ops stability.”

The analysts think investors will show a preference for companies and real estate investment trusts that deliver “the best near-term ops with less attention being paid to valuations (M&A has the potential to reverse this trend but to date has disappointed volume wise),” give the “absence of broader generalist capital allocation to REITs.

“By total return we favor diversified retail/storage (23-25 per cent) followed by industrial/apartments (20-21 per cent) and Seniors (17 per cent) with office (10 per cent) and diversified (7 per cent) still trailing. The aggregate total return across our coverage universe is currently at 19 per cent as trading levels remain relatively depressed vs. our view on NAVs, where spreads to financing cost are consistent. We think the potential exists for some slight multiple expansion, off trough levels (0.7x contributing 8 per cent to total return), on stable ops in an unstable world supporting forecasted FFO growth in the mid single digits (6 per cent) combined with a distribution yield on average of 5 per cent.

“Aggregate valuations continue to look reasonable. We tend to use the spread between implied cap rates vs. underlying financing costs (10-year CMHC rates for apartments and BBB bond yields for other commercial asset types) as a proxy for relative pricing. On average this spread today is 220 bps (note that 10-year bonds saw a fairly dramatic one-day move on better employment figures on Friday – we didn’t re-jig our views on this basis so it’s something to watch going forward), which is below the pre-pandemic but post-financial crisis average of 285 bps and just a tad above the 2018-2019 period average (217 bps).”

The analysts made modest revisions to their forecasts, expecting retail fundamental tailwinds to persist while apartment markets continue to normalize.

“The in-place and forecast interest rates, looking out over 2026/2027, speaks to a perceived period of stability,” they added. “We still expect a 1.5-per-cent drag on earnings next year but a declining impact in 2027 as REITs move past Covid era loan exposure.”

Citing an “attractive” current trading level with “2026 likely to focus on portfolio refinement over growth,” Mr. Kornack upgraded Primaris REIT (PMZ-UN-T) to an “outperform” recommendation from “sector perform” previously.

“Primaris has done heavy lifting on the portfolio expansion front, adding highly productive malls in attractive/growing markets,” he said. “In doing so the REIT also grew its unit count and took on vacancy (and will continue to contend with HBC). Nonetheless, the acquisitions were accretive and at current trading levels PMZ offers the highest implied cap rate in our coverage universe.

“Low rents on exiting HBC exposure represent an opportunity with a leasing profile that will be modestly capex intensive but well within the REIT’s means given expected asset sales. In recent discussions management highlighted that roughly a third of their exposure to HBC could be taken by single tenants requiring minimal landlord work, the remainder will be split between a couple of large format tenants and more intensive CRU expansion. Nonetheless, interest is strong and returns on investment potentially significant. In order to fund re-tenanting while remaining within target leverage levels, dispositions are likely to be more prominent than acquisitions in 2026 with excess capital going to buybacks.”

His target for Primaris units rose to $18, matching the current average on the Street from $16.

“Consumers have been more resilient than expected and in Canada, in-person shopping remains the preferred format,“ he added. “When we moved to Sector Perform our key concern was the impact of a weaker economy on discretionary spending. This hasn’t yet materialized and recent jobs data is encouraging. Meanwhile, stronger discretionary retail brands continue to scale their footprints playing catch-up to demographic growth.

“Capex cycle scares us on malls, but PMZ has been purchasing assets where work was recently completed. Outside the expected outlay on HBC, PMZ’s capex profile has been modest (especially when stripping out Northland which underwent a significant repositioning and is slated to for an imminent sale). The balance sheet is conservative and with regards to EBITDA there are still significant embedded NOI growth from improved recoveries / rents and occupancy gains.”

Mr. Kornack and Mr. Thornhill also made these other target revisions:

Boardwalk REIT (BEI.UN-T, “outperform”) to $80 from $85. The average on the Street is $79.98, according to LSEG data.Canadian Apartment Properties REIT (CAR.UN-T, “outperform”) to $45 from $48.50. Average: $48.50.Dream Office REIT (D.UN-T, “sector perform”) to $19 from $20. Average: $19.75.First Capital REIT (FCR.UN-T, “outperform”) to $23 from $22.50. Average: $21.94.Killam Apartment REIT (KMP.UN-T, “outperform”) to $19.50 from $21. Average: $21.33.Granite REIT (GRT.UN-T, “outperform”) to $94 from $90. Average: $88.75.RioCan REIT (REI.UN-T, “outperform”) to $22.50 from $21.50. Average: $20.50.Sienna Senior Living Inc. (SIA-T, “sector perform”) to $22.50 from $21. Average: $22.38.

“Constrained funds flow keeps investors focused on what is working,“ they noted. ”While it continues to bother us the degree to which the REIT sector has focused primarily on short-term themes, in a sector that requires management teams to make capital allocation decisions that won’t fully be appreciated for years, it is hard to fight this trend in a capital starved segment. We chalk this up to limited funds flow into institutional long-only real estate (or income) dedicated vehicles and a greater predominance of hedge funds/momentum investors. As a result, REITs have seen stable five-year trading price trends but with significant interim volatility (money can be made on trading peaks and troughs). Recommendations wise, we are trying to capture this through playing names that are currently working but reasonably valued, those that are nearing an inflection in operating performance and good quality companies with attractive valuations. As we have learned, the sector tends to move slowly and expected inflections have materialized later than most thought. This has been particularly notable south of the border where trends usually materialize quicker, which we expect may be a cautionary tale for the timelines in Canada as well (albeit we expect the downside potential to be blunted by structural supply constraints that prevent developers from dramatically overshooting on delivery volumes).

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Following recent channel checks, TD Cowen analyst Vince Valentini thinks Black Friday discount pricing across the industry “did not disrupt favorable momentum” for Quebecor Inc.’s (QBR.B-T) Freedom Mobile.

He now expects the fourth quarter of fiscal 2025 to bring both “strong” wireless subscription additions, raising his estimate to 85,000 from 75,000 previously, and a return to positive average revenue per user growth (up 1 per cent year-over-year from a 0.6-per-cent projection previously).

“Not everything was perfect in the industry during BF, but it ended up better than prior years in our view,” said Mr. Valentini. “Thus, we remain confident that QBR remains on track for strong wireless results in Q4/25, with wireless revenue growth more than offsetting continued slight declines in cable. It should be noted that Rogers has been somewhat aggressive with fixed wireless internet (FWA) in Quebec, which seems to have caused a retaliation by Freedom with FWA at $24/month in Ontario. Furthermore, we continue to see certain prepaid brands at only $29 for a decent bucket of mobile data. We would be even more bullish about 2026 estimates and share price appreciation if not for these activities.”

After raising his earnings estimates through 2027, Mr. Valentini bumped his target for Quebecor shares to a Street high of $58 from $55, reaffirming a “buy” rating. The average is currently $51.94.

“QBR.B has meaningfully outperformed peers YTD (up 62 per cent, versus RCI.B up 19 per cent and BCE/T both slightly negative) and LTM [last 12 months] (up 54 per cent, versus RCI.B up 5 per cent and BCE/T both down mid-teens), so that it has now swung to being the most expensive name in the group on an EV/EBITDA basis,” he said. “We cannot at this time justify higher target multiples (we are already using 9.5 times on wireless EBITDA at QBR, versus 7.9 times EBITDA for Rogers/BCE/TELUS), but increased estimates and the passage of time have allowed us to push our target price up.”

“Quebecor continues to effectively manage both capex and FCF, as it expands both revenue and EBITDA as a result of its acquisition of Freedom. In time, we are confident that QBR will accentuate Freedom’s quality with marketing initiatives, as opposed to relying on pricing. Meanwhile, Quebecor can continue to expand through a potential MVNO offering, its Fizz wireless brand, and bundling opportunities. In other countries, we have seen the newer entrant and faster growing wireless carrier trade at a meaningful premium to incumbents (notably TMobile in the U.S.), consistent with what we are currently seeing with QBR. As such, we reiterate our BUY rating.”

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RBC Dominion Securities analyst Darko Mihelic views Laurentian Bank of Canada’s (LB-T) agreement to be taken over by Fairstone Bank of Canada in an all-cash deal valued at $1.9-billion “positively as the transaction represents 72 per cent of LB’s Q4/25 tangible book value.”

“LB noted that the bank had assessed multiple approaches for its retail and SME banking services in recent years but substantial investments would be needed to sustain a competitive position in the Canadian banking landscape, along with evolving regulatory requirements and rising customer expectations it was increasingly difficult to compete effectively,” he said in a client note.

“At $40.50 per share in cash (20-per-cent premium over the $33.76 closing price of LB on December 1, 2025 and 22-per-cent premium over the 20-day volume-weighted average trading price for the period ended on the same day), we believe the purchase price by Fairstone is attractive and unlocks value for shareholders, especially as LB has been aiming to improve efficiency over time. There will be no restrictions on dividend payments until closing although LB will not be able to increase the dividend going forward.”

Given that positive view, Mr. Mihelic upgraded Laurentian to a “sector perform” recommendation from “underperform” previously.

The changes came despite Friday’s release of fourth-quarter 2025 financial results that fell short of his expectations with adjusted earnings per share of 73 cents missing his estimate by 3 cents as well as the consensus projection on the Street by 6 per cent.

“Weaker-than-expected results were primarily driven by higher-than-anticipated stage 3 (impaired) provision for credit losses (PCLs) and lower-than-expected net interest income,” he said.

“We update our model to mostly reflect lower net interest income (lower net interest margin), slightly higher impaired PCLs, lower non-interest revenues and slightly higher non-interest expense to account for seasonally higher Q1 salary and employee benefits expenses. Our estimates decrease to $2.62 (was $3.17) in 2026 and $2.81 (was $3.50) in 2027.”

Mr. Mihelic raised his target for Laurentian shares to $40 from $25 to reflect the acquisition price. The average is $40.34.

Elsewhere, others making rating revisions include:

* Desjardins’ Doug Young to “tender” from “sell” with a $40.50 target, up from $30.

“This was an in-line quarter. In our opinion, LB’s stock will now be mostly driven by the pending sale to NA and Fairstone (see our note). Management feels good about obtaining necessary regulatory approvals and is focused on ensuring a smooth transition of retail and SME customers to NA,” he said.

* Raymond James’ Stephen Boland to “underperform” from “market perform” with a $40.50 target.

“Since the announcement, the stock has moved closer to the acquisition price. At this point, we do not believe there is sufficient return to maintain a position in the stock. Although minimal, there remains a risk that the transaction may not be completed due to unforeseen factors. Consequently, we recommend shareholders attain price certainty at this time. We are lowering our rating to Underperform,” said Mr. Boland.

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In separate reports wrapping up fourth-quarter earnings season for Canadian banks, Mr. Mihelic made these target adjustments:

* Bank of Montreal (BMO-T, “sector perform”) to $178 from $163. The average is $182.69.

“BMO’s Q4/25 core EPS was above our estimate mainly driven by lower than expected Corporate losses and higher than anticipated Capital Markets results. The bank’s 2026 impaired PCL ratio guidance of mid-40 bps was relatively in line with the 46 bps experienced this year. We were hoping for more positivity on credit (from all banks). We still see signs of weaker credit quality in Canada (everywhere). We see BMO’s U.S. and overall ROE moving in the right direction though we still model them shy of target by 2027,” he said.

* Canadian Imperial Bank of Commerce (CM-T, “outperform”) to $131 from $114. Average: $124.25.

“CM’s results were better than expected across most segments except Canada Personal and Business Banking. Impaired PCLs were lower than we expected while CM built performing PCLs that exceeded our estimates which we view as prudent. This bank continues to report solid earnings, good B/S growth with few issues to quibble over, an outsized dividend increase is also welcomed. We see PCLs as stable into 2026 but see solid revenue growth (NIM expansion tailwinds/ execution), modest operating leverage, and buybacks all leading to EPS estimate increases and a higher target multiple, we increase our PT,” he said.

* EQB Inc. (EQB-T, “outperform”) to $110 from $106. Average: $99.01.

“Q4/25 was weaker than expected. We expect PCLs to remain elevated (but below 2025 levels) and we do not believe the Canadian housing market is robust in H1/26 versus EQB’s mid-single-digit on balance sheet growth and high single digit to low double digits LUM growth guidance in 2026. We view its announced acquisition of PC bank positively as it brings credit cards and insurance to its product shelf and is accretive to earnings in the first year after close and likely has material upside beyond our forecast period,” he said.

* Toronto-Dominion Bank (TD-T, “outperform”) to $128 from $120. Average: $122.84.

“TD had a strong quarter across most operating segments and impaired PCLs were lower than expected. It appears that the bank is well underway to its U.S. BSA / AML milestones and benefits from balance sheet/investment portfolio repositioning and restructuring efforts have begun to show through. We view the slightly better PCL guidance for 2025 versus 2026 and outsized buybacks favourably and believe its solid targets can be achieved with disciplined execution,” he said.

Elsewhere, Raymond James’ Stephen Boland increased his BMO target by $1 to $183 with a “market perform” rating.

“This was a solid quarter marked by continued improvement in credit and NIM. That said, we remain cautious on the growth outlook for the U.S. (challenging market conditions, execution on BoW synergies). And with the stock trading at 13.1x 2026E EPS (near historical peak), BMO’s valuation appears fair given the near-term ROE and EPS growth potential beyond 2026. We maintain our Market Perform rating for BMO while our target moves to $183,” said Mr. Boland.

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Desjardins Securities analyst Chris Li is expecting Dollarama Inc. (DOL-T) to report “another quarter of solid results” on Thursday, emphasizing his recent pricing survey “continues to show compelling value.”

For its third quarter of fiscal 2026, he’s projecting diluted earnings per share of $1.10, matching the consensus forecast on the Street and up 12 cents from the same period a year ago. That stems largely from same-store sales growth of 4.8 per cent, “driven by solid traffic, consumables demand and four key Halloween selling days in 3Q FY26.” It’s an increase of 1.5 per cent year-over-year.

“Our latest pricing survey shows competition remains rational, with DOL maintaining its strong value proposition,” said Mr. Li. “On a price-per-unit basis, we estimate DOL is 30–50 per cent lower vs WMT and AMZN. We believe DOL’s premium valuation is supported by investors’ preference for safety and visible earnings growth, with longer-term upside from International expansion.”

After raising his earnings forecast through fiscal 2027, Mr. Li increased his target for Dollarama shares to $218 from $205 based on a 10-per-cent increase in his valuation for its international business, “driven by higher confidence in the growth and replicability of DOL’s model.” The average on the Street is $214.50.

He reaffirmed a “buy” rating.

In a separate report, Mr. Li hiked his target for Groupe Dynamite Inc. (GRGD-T) to $83 from $53 with a “buy” rating ahead of its earnings release on Tuesday.

“We expect continued strong SSSG supported by a resilient consumer and successful execution of growth initiatives (real estate optimization, product innovation, enhanced customer engagement through loyalty/digital),” he said. “GRGD’s premium valuation (approximately 37 times FY26 EPS) reflects another ‘beat and raise’, which we believe is possible. For LT investors, our positive view is supported by double-digit percentage EPS growth, solid FCF and a healthy balance sheet supporting a higher capital return.”

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National Bank Financial analyst Alex Terentiew thinks Endeavour Silver Corp. (EDR-T) now sits in a “very strong” cash position following last week’s announcement of its US$350-million offering of unsecured convertible senior notes due 2031, (Q4/25EUS$256mln), seeing it well funded to complete the development of its Pitarrilla project in Mexico using future free cash flows.

“We continue to view Endeavour Silver as our Top Pick within the silver coverage universe due to its relatively discounted valuation, peer-leading growth profile, and expected transition to a state of positive FCF through the ramp-up of Terronera,” he added. “With the start-up of Terronera now largely in the rearview mirror, we believe management will turn its focus to FCF harvesting, potential capital return programs, and the development of Pitarrilla, which has the potential to be the company’s largest operation.”

Mr. Terentiew upgraded his model for the Vancouver-based company for the US$350-million convertible senior notes, assuming it company will repay the entirety of its outstanding revolving credit facility balance and loans for its acquisition of Minera Kolpa in the fourth quarter of the current years. He also removed the Bolanitos mine from his estimates following the announcement of its sale to Guanajuato Silver Co. (GSVR-X) in a deal worth up to $50-million.

Maintaining his “outperform” rating, he cut his Street-high target by $1 to $18. The average is $14.81.

“With a stronger balance sheet and improved remaining asset quality, we continue to view EDR as a top pick within the silver sector and maintain our Outperform rating,” he concluded.

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In other analyst actions:

* Citing valuation concerns and a potential delay to the ramp up of its Tucumã operation in Brazil, Jefferies’ Fahad Tariq downgraded Ero Copper Corp. (ERO-T) to “hold” from “buy” with a $40 target, rising from $37. The average on the Street is $34.86.

* Seeing limited upside potential following recent share price appreciation and expressing concern about its ability to meet 2026 guidance, Mr. Tariq also lowered Ivanhoe Mines Ltd. (IVN-T) to “hold” from “buy” with a $16 target, down from $18 and below the $17.85 average.