Thursday’s analyst upgrades and downgrades

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

Citing legal, safety and environmental concerns at its wholly owned Grota do Cirilo operation in Brazil, BMO Nesbitt Burns analyst Joel Jackson downgraded Toronto-based Sigma Lithium Corp. (SGML-Q, SGML-X) to “market perform” from “outperform” with a US$10 target.

On Thursday, Brazil’s mining regulator ANM ordered Sigma Lithium to halt ⁠mining activities ​in part of its mine, citing an unspecified “imminent risk,” according to ​a document seen ‌by Reuters.

The agency ordered immediate corrective work to begin on the eastern slope ‌of the ​mine’s ‌north pit, where it ​said there was a “ruptured section.” It also demanded several measures be taken to mitigate ⁠risks at the mine, adding that it “will take appropriate measures in the event of non-compliance.”

“We move to the sidelines pending greater clarity on a number of legal, safety, and environmental challenges facing the company,” said Mr. Jackson. “While we recognize the political backdrop in Brazil remains complex, the timing of a return to normalized operations remains uncertain. We also expect SG&A expenses to increase meaningfully as Sigma addresses and contests these issues.

“Combined with a more challenging lithium market backdrop in recent weeks, we believe a more cautious stance is warranted.”

In a client report titled A Well-Defined Roadmap in the wake of the third-quarter results from WildBrain Ltd. (WILD-T) , RBC Dominion Securities analyst Drew McReynolds said he’s “awaiting greater visibility on the adjusted EBITDA bridge to F2029.”

“Management is targeting adjusted EBITDA to roughly double (approximately $60-million) by the end of F2029 from the mid-point of F2027 guidance ($30-million) driven by the scaling of owned-brand licensing, content and advertising monetization and operating leverage,” he explained.

“As we await greater visibility around this trajectory, we remain supportive of the company’s more profitable, capital-light and FCF-generative business model following the sale of Peanuts and closure of Television with management taking a disciplined approach to content production. In addition, we believe a revenue mix absent legacy media exposure, a debt-free balance sheet and management’s commitment to return excess capital to shareholders (NCIB, newly-announced SIB) meaningfully lower the risk profile of the stock.”

Mr. McReynolds thinks the Toronto-based media, animation studio, production, and brand licensing company now possesses “a well-defined strategic, operating and capital allocation roadmap.”

“We believe the company’s strategy (building long-term franchise value by activating IP across consumer products, content and digital audiences), operational plan (new reporting segments, $30-million of investment in F2027) and capital allocation (investment, selective acquisitions, share repurchases) in aggregate is a well-defined roadmap that now puts the focus on execution,” he added. “Management expects continued Franchise & Global Licensing growth in owned-brands (Strawberry Shortcake, Teletubbies) and third-party IP and a F2027 rebound in production/ green-lits across live action and animation within Content, and sees opportunity to recapture advertising demand within WildBrain Network. The $30-million of incremental investments in F2027 includes opex, capex and reorganization costs that are intended to support greater operating scale, lower corporate costs over time and drive top-line growth.”

With management’s guidance, including 44-per-cent year-over-year growth in adjusted EBITDA (to $28-32-million) as well as and the introduction of new reporting segments and a fiscal 2029 adjusted EBITDA target, the analyst updated his forecast, leading him to reduce his target for WildBrain shares to $1.50 from $2, keeping a “sector perform” rating. The average on the Street is $1.82.

“Management is targeting adjusted EBITDA to roughly double ($60-million) by the end of F2029 from the mid-point of F2027 guidance ($30-million) driven by the scaling of owned-brand licensing, content and advertising monetization and operating leverage,” said Mr. McReynolds. “As we await greater visibility around this trajectory, we remain supportive of the company’s more profitable, capital-light and FCF-generative business model following the sale of Peanuts and closure of Television with management taking a disciplined approach to content production. In addition, we believe a revenue mix absent legacy media exposure, a debt-free balance sheet and management’s commitment to return excess capital to shareholders (NCIB, newly-announced SIB) meaningfully lower the risk profile of the stock.”

While warning Brookfield Renewable Partners L.P.’s (BEP-N, BEP.UN-T) near-term earnings remain exposed to “weather-related variability,” National Bank Financial analyst Baltej Sidhu remains “constructive” on its long-term outlook ahead of the release of its third-quarter results early next month.

“BEP maintains significant financial flexibility, with $5.1-billion of liquidity and an active asset recycling program,” he said. “The upcoming combination of BEP and BEPC into a single publicly traded corporation should improve liquidity and investor accessibility over time, while simplifying the corporate structure and potentially broadening the shareholder base.”

In a client report released before the bell, Mr. Sidhu upgraded his estimates for Brookfield Renewable to reflect “weaker-than expected-resource conditions” across its portfolio, which he said is partially offset by higher hydro pricing and stronger asset recycling activity.

“We now forecast total proportionate generation of 7,192 GWh [gigawatt hours], 82 per cent of LTA [long-term average] (was 8,908 GWh). Hydro was the primary source of weakness, and we now anticipate proportionate hydro generation of 3,696 GWh (was 4,872 GWh), or approximately 76 per cent of LTA (was 100 per cent, last year 82 per cent),” he explained. “Our data analysis suggest weak conditions in Ontario, New England, PJM and New York, while Québec was close to LTA and B.C. was modestly below LTA. Colombia was particularly weak at 70 per cent of LTA, as poor inflows were compounded by the government’s temporary reliability measures that require greater thermal dispatch and restrict hydro releases to conserve reservoir water for the anticipated dry period (Super El Niño), limiting the usual offset from higher power prices.

“We now anticipate proportionate adj. EBITDA of $737-million for Q3E (was $782-million, cons. $731-million). FFO forecast declines to $348-million from $377-million, or $0.51/unit (was 0.55/unit, cons. $0.53/unit). The FFO revision is primarily attributable to lower hydro, wind and solar contributions, partly offset by higher other income and corporate/other.”

Despite the reduction, Mr. Sidhu emphasized the company’s growth prospects “continue to benefit from its expanding scale and capital recycling strategy,” which he thinks “underpins long-term growth.”

“The completed acquisition of Boralex adds a largely contracted renewable platform and 8 GW development opportunities, while creating further scope for asset optimization and strengthening Brookfield’s positioning in Québec and future Canadian opportunities through its partnership with La Caisse,” he saod. “The Aypa Power acquisition announced in Q3 should further expand BEP’s North American storage platform, adding1 GW of operating, under construction and contracted capacity and over 3 GW of development projects net to BEP. Westinghouse provides longer-term upside, with a potential US$50bln IPO valuation implying US$7–8/unit of potential value for BEP vs. our current US$5–6/unit estimate. Price discovery could crystallize an incremental more than US$1.50–2.00/unit, validating Brookfield’s nuclear strategy, although we do not assume any IPO benefit in our current estimates.”

He maintained his “outperform” rating and US$38 target for Brookfield Renewable’s U.S.-listed shares. The average on the Street is US$38.14,

TD Cowen analyst Steven Green thinks SSR Mining Inc.’s (SSRM-T) $275-million deal for the Cripple Creek & Victor (CC&V) gold mine from Newmont Corp. early in 2025 has “already proven to be a highly accretive, well timed acquisition.”

“The acquisition CC&V has generated more than $345-million of FCF, has been a reliable performer, and has the potential for a long mine life (pushing off the closure obligations),” he said. “The current 2.7 Moz reserve supports a 12-year mine life, with significant resources, likely to extend the mine life. We value CC&V at $1.46-billion NAV5-per-cent, representing 28 per cent of our total project NAV.

“Next challenge is repeat this success: With over $1.8-billion in cash on the balance sheet, SSR’s stated goal is to acquire another project within the Americas (with the U.S. being the highest priority). Management did indicate that they intend to be patient on this however, prioritizing expected returns over doing something quickly.”

Following a visit to the Colorado project, Mr. Green said CC&V’s resource base appears to point to a long potential mine life.

“Beyond the 2.7 Moz reserve, CC&V hosts a total of 4.2 Moz in M&I and inferred resources, providing a sizeable base to extend the operation beyond the current plan,” he said. “The key constraint is permitting and additional leach-pad capacity which is done in a stepwise fashion through ongoing Amendments.

“Currently working on Amendment 14: This expansion would add 171 Mt of leach capacity across VLF1/VLF2, with approval expected by YE27 following a 12–18 month process (started by NEM). Current leach-pad capacity supports operations to ~2032/33, while Amendment 14 will extend mining to 2035 and leach capacity to 2038/39. We also heard from a county commissioner, who indicated that he was supportive of the operation, which has good local support.”

In a client note, Mr. Green also emphasizing “extensive drilling provides a head start on conversion.”

“C&V has seen 2.8 million drilled metres across 17,627 historical holes,” the analyst said. “This extensive dataset should reduce geological risk as SSR evaluates future resource-to-reserve conversion.”

“Management note in Denver that they expect Q3 production to remain relatively flat to Q2 before a significantly stronger Q4 (from Marigold and Seabee), which is expected to account for 60 per cent of H2 production.”

He reaffirmed his “buy” rating and $52 target for SSRM shares. The current average is $47.50.

“Looking ahead, the Amendment 14 expansion is a key catalyst, with approval expected by YE27 bringing additional leach capacity supporting a mine life into the late 2030s, while providing another step toward unlocking the 6.8 Moz total resource base,” said Mr. Green.

Elsewhere, ATB Cormark’s Richard Gray raised his target to $64 from $59 with an “outperform” rating.

“SSR hosted a site visit on Wednesday to its Cripple Creek & Victor (CC&V) mine in Colorado that is one of SSR’s two producing mines in the U.S. along with Marigold. We came away impressed with the operation, particularly the mine life upside that is not limited by drilling or gold price, but infrastructure and permitting. We believe CC&V will produce for much longer than the currently modelled 12 years and will anchor SSR’s U.S.-based production profile for decades,” said Mr. Gray.

Desjardins Securities’ Kyle Stanley thinks last week’s analyst tour of PRO Real Estate Investment Trust’s (PRV.UN-T) Halifax assets supports his positive outlook, pointing to its “dominant positioning” in the Nova Scotia capital as well as “the near- and long-term benefits expected for industrial real estate in that market owing to significant fiscal spending, with a focus on defence.”

“With 20 per cent of PRV’s portfolio located in Halifax, the bulk of which sits in Burnside Industrial Park (50/50 JV with Crestpoint), it is the only public market avenue to play the Halifax defence and infrastructure spending theme, which could translate into more than $100-billion in investment over the coming decades,” he said..

“While the portfolio vintage is generally older (1980s construction), limited new supply in PRV’s submarkets, combined with proximity to the airport and maritime infrastructure, and small- to mid-bay formats catering to the SMEs most likely to underpin the defence buildout, offer solid long-term demand drivers. Lastly, Amazon’s 1.2-million-square-foot development in Halifax represents a major expansion into Atlantic Canada, one that in other markets has been a precursor to higher e-commerce penetration and warehouse demand.”

While he lowered his funds from operations projections through the end of 2028, Mr. Stanley said PRO REIT’s earnings growth is “inflecting.”

“Limited new industrial supply combined with the early benefits of fiscal spending demand has translated into substantial asking rent growth in Halifax (83-per-cent T5Y vs 46-per-cent average across other markets),” he explained. “This offers a 20-per-cent average MtM opportunity for PRV as leases mature — 400 ksf of renewals across the portfolio (55-per-cent spread) are set to begin contributing in 4Q, including a 110 ksf lease to Sysco in Halifax at a 103-per-cent spread. Moreover, enhanced business activity in Halifax should translate into improving occupancy over time (PRV’s Halifax industrial occupancy is 93.5 per cent), as most existing vacancy relates to ancillary office space. The combination of these factors drives 10-per-cent FFOPU growth in 2027 from -2 per cent in 2026, the best in the industrial space and the most aggressive year-over-year growth inflection vs peers.”

He reiterated a “buy” rating and $7.50 target for the REIT’s units. The average is $7.40.

In other analyst actions:

* BMO’s Étienne Ricard initiated coverage of Onex Corp. (ONEX-T) with an “outperform” rating and $160 price target, exceeding the $153.60 average on the Street.

“Onex’s capital allocation strategy is at a pivotal moment, with the firm focused on becoming a financial-services compounder rather than a traditional private equity holding company,” he said. “This bears positive implications for easing capital intensity, asset management synergies, and reduced valuation complexity. Further, the acquisition of Convex offers a new value-creation pillar that should be supportive of low double-digit investing capital per share growth (vs. +8% over the past decade).

“Layering in a margin of safety valuation-wise, the risk-reward appears upside-skewed.”

*ATB Cormark’s Tim Monachello cut his Ag Growth International Inc. (AFN-T) target to $11 from $18 with a “sector perform” rating. The average is $23.56.

“In our view, the path forward for AFN to successfully refinance its $304-million of debt maturities by year-end 2027 is far from certain. The most optimistic scenarios we envision would avoid dilution but could lead to meaningful increases in AFN’s interest burden and divestitures of key cash-flow-generating assets (India for instance). The least optimistic scenarios lead to significant equity dilution. Given the high level of uncertainty and risk of dilution we reduce our price target from $18.00 to $11.00 and maintain our Sector Perform rating. Given the uncertainty in AFN’s path forward we make no changes to our estimates at this time,” said Mr. Monachello.

* Barclays’ Michael Lonegan lowered his target on Algonquin Power & Utilities Corp. (AQN-N, AQN-T) to US$6 from US$7 with an “overweight” rating. The average on the Street is US$6.75.

* Ahead of the release of its second-quarter 2027 results on Oct. 8, Canaccord Genuity’s Luke Hannan lowered his target for Aritzia Inc. (ATZ-T) to $189 from $193 with a “buy” rating. The average is $182.63.

“At approximately 13 times FY2 EBITDA, ATZ trades at a multiple in line with NKE, and slightly ahead of ITX, which we view as unwarranted given ATZ’s higher comparable sales growth (even when facing significantly tougher comps) and expanding ROIC,” he said. “We’ve rolled forward our target multiple to F2028 to reflect the passage of time, though we still believe Aritzia should trade at a premium to its peer set given its superior fundamentals. As such, our updated target multiple of 18.0 times FY2 EBITDA represents a 5-times premium to peers.”

“In our view, given Aritzia’s generation of robust comparable sales growth, its healthy pipeline of new selling square footage coming online, and its clean balance sheet that supports growth and margin enhancement initiatives, we believe Aritzia deserves of a premium valuation.”

* Pointing to pressure on telecom valuations, National Bank’s Adam Shine lowered his target for BCE Inc. (BCE-T) shares to $36 from $38, keeping an “outperform” rating, ahead of the release of its quarterly results on Nov. 5, emphasizing “more telecom discipline and [a] focus on evolving Bell AI Fabric opportunity.” The average is $37.76.

* Predicting volatility ahead for shares of Dye & Durham Ltd. (DND-T), Raymond James’ Stephen Boland dropped his target to $1.75 from $4, keeping a “market perform” rating. The average is $4.25.

“While shares reacted sharply to a better-than-feared 4Q26, we caution against extrapolating one quarter of improved fundamentals. DND now appears to have a credible path to remaining a going concern, but the margin for error remains slim, and each quarter will need to demonstrate revenue stability, cost discipline and cash generation,” he said. “Under our estimates, stable to low-single-digit top-line growth supports sufficient liquidity and deleveraging, with net debt/EBITDA declining to 5.1 times by FYE27 from 6.4 times currently.

”This would provide meaningful breathing room ahead of the next refinancing wall, beginning with the $160-million convertible debentures due November 2028 followed by the US $509-million Senior Secured Notes in April 2029. Improved operating performance also provides additional time to pursue a sale of Canadian Financial Services, which could accelerate deleveraging. We believe solvency will remain the central question surrounding DND absent a sale at a favorable valuation.”

With a file from Reuters