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

The friendly deal that will see Cenovus Energy Inc. (CVE-T) take over MEG Energy Corp. (MEG-T) is a “strategic masterstroke” when it comes to how it will consolidate the Christina Lake oil operations, said Chris MacCulloch of Desjardins Securities.

Mr. MacCulloch reiterated Cenovus as a top pick while increasing his price target on the stock to C$29 from C$27.50.

“We view Friday’s overwhelmingly positive market response to the proposed transaction as confirmation of what the investment community already knew—consolidating Christina Lake is a slam dunk for CVE. Simply put, there isn’t another operator that could have offered the operational synergies that CVE can given proximity to its existing assets at Christina Lake and its technical expertise in thermal oil sands development. These factors support its impressive development plan that would deliver incremental growth at highly attractive capital efficiencies of ~C$13,000/bbl/d, among the most competitive we have seen for long-life, low-decline oil sands production,” Mr. MacCulloch said in a note to clients.

“The transaction is even more impressive considering the modest price tag and 75% cash funding, which should enable CVE to consolidate Christina Lake without significant dilution to equity holders. Although it still has some work to do right-sizing debt levels, we are confident this can be achieved through non-core asset dispositions,” he added.

Cenovus Energy announced on Friday it will acquire MEG Energy in a C$7.9 billion cash-and-stock deal. The deal topped Strathcona’s C$6 billion takeover offer, which was rejected by MEG’s board in June.

The analyst said it’s possible Strathcona Resources would reenter the fray by raising its initial bid for the company. But it’s highly unlikely to sway the MEG board or shareholders given the poor liquidity of its shares and the break fee that is now involved, he said. “That said, we would not rule out the potential for CVE to offer a modest sweetener prior to MEG’s shareholder vote in October, which it has left itself ample room to fund at C$27.25/share,” Mr. MacCulloch said.

As for MEG Energy, Mr. MacCulloch moved his recommendation to a tender from a “hold”, with a price target of C$28.

“In our view, the proposed deal represents fair value despite the modest take-under vs Thursday’s (August 21) closing price given the cash component of the bid and the equity component, which enables MEG shareholders to participate in the synergies of the combined entity,” the Desjardins analyst said.

Elsewhere, ATB Capital Markets analyst Patrick O’Rourke raised his price target on Cenovus Energy to C$28 from C$25 while reiterating an “outperform” rating. “The strategic rationale is underpinned by a logical asset fit, consolidating adjacent and highly complementary assets at Christina Lake, with CVE identifying ~$150mm in immediate annual synergies and an additional ~$280mm in long-term optimizations achievable by 2028,” he commented.

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Desjardins Securities analyst Alexander Leon lowered his price target on Inovalis Real Estate Investment Trust (INO-UN-T) to 85 cents from C$1 following weaker-than-expected second quarter results.

“Total portfolio occupancy was unchanged sequentially at 58.9%, and 18,000sf of previously vacant space is committed for occupancy in 3Q25. However, tenants in default of rent at Gaia (~21,500sf), the upcoming departure of Lorenz Bahlsen at Trio (~86,500sf; INO’s second largest tenant contributing 9% of total revenue), and higher capex and leasing costs represent significant operational headwinds through early 2026,” Mr. Leon said.

He reiterated a “hold” rating.

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Canaccord Genuity analyst Doug Taylor initiated coverage on Tiny Ltd. (TINY-X) with a “speculative buy” rating and C$1.75 price target.

Victoria-based Tiny is a consolidator of businesses across a wide array of industries including product design, ad agencies, ecommerce solutions and internet products.

Recent quarterly results from the company included the initial impact of its recent acquisition of Serato Audio Research Limited, a global DJ software company, noted Mr. Taylor.

“With this significant, highly profitable asset in the fold, Tiny is resuming its deleveraging profile at an accelerated rate. Our positive thesis is based on several catalysts: 1) Improved organic growth profile through Serato inclusion and in lapping easier comps for the Creative Platform segment; 2) Accelerated deleveraging with improving FCF and one-time licensing fee capture; 3) Realization of latent value in the company’s Tiny Fund I investments,” the analyst said.

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Raymond James analyst Brad Sturges trimmed his price target on Nexliving Communities Inc. (NXLV-X) to C$2.30 from C$2.50 following the company’s second-quarter results. He is maintaining an “outperform” rating.

NexLiving’s 2Q25 funds from operations was about 5 cents a share, below Mr. Sturges’ 6 cents estimate, due to higher-than-forecasted General and Administrative expenses costs. But this was up 26% from a year earlier.

“While we have trimmed our FFO/share and AFFO/share estimates to reflect 2Q25 results, we forecast NexLiving to generate robust 2025E adjusted funds from operations (AFFO)/share growth of +33% YoY, driven by its recent Devcore MFR portfolio acquisition last year. We believe NexLiving could deliver relatively stronger AFFO/share growth YoY in 2H25, based on an expected reduction in average occupancy rate headwinds due to the company’s leasing efforts in New Brunswick, and lower expected G&A cost inflation YoY in the back of the year following completion of non-recurring strategic investments implemented by Nexliving as well as due to the timing of stock incentive compensation in 1H25,” Mr. Sturges said in a note to clients.

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More to come