Inside the Market\u2019s roundup of some of today\u2019s key analyst actions<\/p>\n
National Bank Financial analyst Jaeme Gloyn remains \u201cconstructive\u201d on the outlook for Canadian property and casualty insurers heading into third-quarter earnings season \u201cdespite some segments of the market easing after several years of hard-market conditions and rotation into Canadian banks have weighed on shares in H2\/25.<\/p>\n
\u201cSeveral themes inform our still favourable view: i) continued firm conditions in personal lines, ii) little exposure in our coverage to areas experiencing more material softening in commercial lines, iii) healthy underwriting margins with rate increases exceeding loss-cost trends, iv) moderating claims inflation and improvements in key cost drivers, and v) readthroughs from U.S. commercial peers that point to sustainable profitability,\u201d he said. \u201cFurther, recent share price weakness has re-opened an attractive entry point on valuations that remain reasonable relative to ROE expectations.\u201d<\/p>\n
In a research report released Monday before the bell, Mr. Gloyn updated his estimates for companies across his Diversified Financials coverage universe, including insurance providers. That led to a series of target price revisions.<\/p>\n
For P&C companies, his changes are:<\/p>\n
Fairfax Financial Holdings Ltd. (FFH-T<\/a>, \u201coutperform\u201d) to $3,200 from $3,000. Average: $2,921.82.Intact Financial Corp. (IFC-T<\/a>, \u201coutperform\u201d) to $358 from $352. Average: $319.77.<\/p>\n His other changes are:<\/p>\n Brookfield Asset Management Ltd. (BAM-N<\/a>\/BAM-T<\/a>, \u201coutperform\u201d) to US$69 from US$71. Average: US$64.35.Brookfield Corp. (BN-N<\/a>\/BN-T<\/a>, \u201coutperform\u201d) to US$56 from US$82. Average: $50.56.Element Fleet Management Corp. (EFN-T<\/a>, \u201coutperform\u201d) to $48 from $47. Average: $43.26.IGM Financial Inc. (IGM-T<\/a>, \u201coutperform\u201d) to $60 from $58. Average: $55.33.Power Corp. of Canada (POW-T<\/a>, \u201csector perform\u201d) to $64 from $58. Average: $61.57.<\/p>\n \u201cOur quality picks with valuation upside, EFN and FFH, have continued to perform well year-to-date, up 30 per cent and 16 per cent respectively,\u201d he noted. \u201cWe expect another quarter of solid results to continue that trend. Our bargain risk-on picks (ECN, GSY and BBU) are delivering mixed performance. BBU is up 50 per cent year-to-date following the company\u2019s plans to eliminate the dual LP and Corporation structure supported by strong underlying operating results. GSY was up 29 per cent through mid-September before a short report erased all of those gains. We expect management will deliver a robust rebuttal with Q3-25 in addition to stable results that restores investor confidence in the near and long-term outlook for the business. <\/p>\n \u201cOur Top Pick ECN [\u2019outperform\u2019 and $5 target] did not deliver the event-drive upside of a take-out we anticipated and the fundamentals have taken a little longer to inflect higher. The shares are down 6 per cent year-to-date. However, we remain positive on the outlook for the company given improving fundamentals in both the Manufactured Home and RV-Marine finance platforms. We expect potential 2026 guidance with Q3 results to give investors a window into that fundamental upside.\u201d<\/p>\n =====<\/p>\n Responding to Friday\u2019s report from Bloomberg<\/a> that Newmont Corp. (NEM-N<\/a>) is interested in Barrick Mining Corp.\u2019s (B-N<\/a>, ABX-T<\/a>) gold assets in Nevada, RBC\u2019s Head of Global Metals & Mining Research Josh Wolfson thinks a selective acquisition of the portfolio will be \u201cchallenging,\u201d however he thinks a deal for the entire company would \u201cseem more likely and opportunistic.\u201d<\/p>\n \u201cB\u2019s overlapping assets with NEM represent a total 61 per cent of its NAV, including 37 per cent for NGM, 14 per cent for Fourmile, and 10 per cent for PV in the Dominican Republic,\u201d he said. \u201cAbsent B pursuing its own break-up, or NEM finding a joint suitor for the entirety of B, we believe it would be challenging for NEM to selectively acquire this portfolio, given its disproportionate value share and strategic importance. For NEM, these overlapping interests total 22 per cent of NAV (i.e. 16 per cent for NGM, plus 6 per cent for PV).\u201d<\/p>\n \u201cBeyond the logic and synergies of combining the two companies\u2019 assets, we think NEM is motivated to accelerate M&A, given (1) B\u2019s interim CEO position vacancy that reduces social challenges, and (2) expected growth of Fourmile over time that will complicate NEM\u2019s pro-rata acquisition. Fourmile will be incorporated into the NGM JV upon a bankable feasibility study, projected in 2029. NEM maintains the option to dilute its interest, in our view with material valuation consequences, or purchase.\u201d<\/p>\n In a client note, Mr. Wolfson argues \u201chistory provides further credibility to the idea of a pursuit by NEM\u201d and thinks a deal for Barrick \u201ccould be positive, but M&A remains uncertain.\u201d<\/p>\n \u201cNEM has historically pursued larger-scale M&A, including its 2019 Goldcorp acquisition and its 2023 Newcrest (NCM) acquisition,\u201d he noted. \u201cNEM\u2019s initial NCM overture was also made during a period of CEO vacancy and was reported in the media prior to formal discussions, mirroring B\u2019s circumstances today. Aside, we note NEM\u2019s successful 2024-25 asset disposition process could provide the company with credibility for any M&A plans for B.\u201d<\/p>\n \u201cWe highlight significant valuation differences between NEM (1.15 times P\/NAV at spot) and B (0.73 times) that could provide NEM with flexibility to pay a larger premium (i.e. up to 35 per cent), plus still maintain accretion from a transaction. We also note B shares still trade at a slight discount to its worst-case break up value, while its non-Nevada\/PV assets trade at an implied less than 0.4 times NAV.\u201d <\/p>\n Keeping an \u201coutperform\u201d rating for Barrick shares, the analyst raised his target to US$40 from US$38. The average is US$39.76.<\/p>\n =====<\/p>\n While the third-quarter results from Hammond Power Solutions Inc. (HPS.A-T<\/a>) came in \u201cmixed\u201d versus the Street\u2019s expectations, National Bank Financial analyst Baltej Sidhu sees \u201ctransformative tailwinds\u201d for the transformer manufacturer, emphasizing its backlog growth \u201canchors top-line growth.\u201d<\/p>\n \u201cQ3\/25 marked a strong rebound in backlog, providing clear support for its forward outlook and which should materialize into sales over the next 1.5 years,\u201d he said. \u201cBacklog rose 17.6 per cent quarter-over-quarter (vs. Q2 contracting down 8 per cent quarter-over-quarter), driven by a surge in quoting activity to fill capacity at the new Monterrey 4 facility. Post-quarter orders already account for more than 50 per cent of Q3\u2019s backlog, highlighting continued momentum in data centre orders.\u201d<\/p>\n Shares of the Guelph, Ont.-based company surged 27.5 per cent on Friday after it released its quarter report, which included revenue of $218-million, up 13.7 per cent year-over-year but down 2.7 per cent sequentially and falling in line with Mr. Sidhu\u2019s $219-million estimate and the Street\u2019s projection of $217-million, driven by \u201crobust U.S. demand across data centres, switchgear, motor control, and mining.\u201d Adjusted EBITDA of $30.3-million also matched the analyst\u2019s forecast ($30.6-million) but fell short of the $32.4-million consensus \u201cpressured by margin compression and higher selling\/distribution costs, partially offset by lower G&A.\u201d <\/p>\n \u201cAll in all, its results reflected the combined impact of volume growth, margin pressures, and cost dynamics,\u201d he noted.<\/p>\n \u201cDespite margin compression in Q3, early signs of a positive inflection are emerging. Section 232 tariffs on certain steel and aluminum derivatives impacted profitability; however, we should have better line of sight to margin recovery beginning in Q4\/25E. This outlook is supported by recent pricing actions taking full effect and increased facility utilization. As such, Q3 is likely the trough in profitability, with recovery expected to gain momentum from Q4E onward\u2014driven by incremental margin insulation from pricing adjustments, improved capacity utilization, accelerated backlog conversion and richer product mix.”<\/p>\n In response to the release, Mr. Sidhu said his revised forecast \u201cconservatively excludes additional contract wins through year-end, aside from the booked backlog growth, which we risk.\u201d <\/p>\n \u201cWith the announced $100-million capacity expansion, primarily directed towards its Line 4 facility, HPS should be well-positioned to capture incremental demand,\u201d he said. \u201cUnder a set of prudent assumptions outlined within, a risk-adjusted scenario could see shares reaching $250\/sh\u2014or 30\u201340-per-cent upside from current levels.<\/p>\n Reaffirming his \u201coutperform\u201d rating for Hammond shares, Mr. Sidhu hiked his target to $195 from $150. The average target is $179.<\/p>\n \u201cWith a record backlog, firm commitments from data centre contracts, and expanded capacity, HPS is strongly positioned for sustained growth \u2014 emerging as a strategic lever in North America\u2019s electrification and digital infrastructure boom,\u201c he explained. \u201dConcurrent with our revised \u201927E, we are raising our target to $195\/share (was $150\/sh), which reflects stronger growth expectations and is underpinned by a 12.5 times EV\/EBITDA multiple on \u201927E (was 12 times on \u201926E) and backed by our DCF with an 8.8-per-cent discount rate (was 9.3 per cent).\u201d<\/p>\n Elsewhere, Canaccord Genuity\u2019s Matthew Lee raised his target to $211 from $154, keeping a \u201cbuy\u201d rating.<\/p>\n =====<\/p>\n TD Cowen Michael Tupholme is forecasting an acceleration in year-over-year in organic growth for most of the Canadian engineering and construction companies in his coverage universe in the third quarter versus the first half of the year, seeing outlooks \u201csupported by robust backlogs and favorable demand trends in key end-markets.\u201c<\/p>\n \u201cOverall, we remain constructive on the outlook for our covered E&C names, supported by robust backlogs and what we see as continued healthy activity within key end-markets (infrastructure, water, power, defence, and mission-critical facilities),\u201d he said.<\/p>\n \u201cOur Q3\/25 forecast calls for a pick-up in y\/y engineering\/construction organic revenue growth at four of five names vs. H1\/25 (we expect ARE and ATRL\u2019s Nuclear segment to see strong y\/y revenue growth, but we forecast some moderation vs. H1\/25\u2019s very robust year-over-year gains). While we do not expect it to weigh meaningfully on performance, the engineering names are likely to see less U.S. emergency response activity vs. the prior year. Further, we will be looking for any outlook commentary on how the U.S. government shutdown may affect Q4\/25 performance (seen as having limited direct impact, but uncertainty likely affecting some customer decisions).\u201d<\/p>\n In a client note released Monday, Mr. Tupholme made modest forecast adjustments for four of his five covered names, noting his 2025\/2026 estimates are little changed.<\/p>\n \u201cRegarding EBITDA, we expect each of ATRL, STN and WSP to report healthy year-over-year gains (up 15.5 per cent on average),\u201d he said. \u201cAs ARE and BDT face difficult prior year comps, we expect EBITDA to be down year-over-year (but forecast year-over-year growth to reemerge in Q4\/25 and carry on in 2026). Our Q3\/25 EBITDA estimates are largely in line with consensus\u201d<\/p>\n \u201cWe see ongoing momentum in nuclear, additional Canadian nation-building project developments, and possible M&A as potential positive catalysts for the group,\u201d he added. \u201cATRL-T remains our top pick. <\/p>\n The analyst made these target adjustments:<\/p>\n Aecon Group Inc. (ARE-T<\/a>, \u201cbuy\u201d) to $34 from $23. The average is $25.55.Bird Construction Inc. (BDT-T<\/a>, \u201cbuy\u201d) to $36 from $32. Average: $35.94.Stantec Inc. (STN-T<\/a>, \u201cbuy\u201d) to $183 from $176. Average: $164.64.WSP Global Inc. (WSP-T<\/a>, \u201cbuy\u201d) to $330 from $328. Average: $315.86.<\/p>\n For top pick AtkinsR\u00e9alis Group Inc. (ATRL-T<\/a>, \u201cbuy\u201d), he kept his Street-high $124 target. The average is $112.77.<\/p>\n \u201cWe see upside to its already strong 2025 Nuclear revenue guidance, believe its strong balance sheet (net cash) positions it well for M&A, and view its valuation as attractive,\u201d he said.<\/p>\n =====<\/p>\n RBC Dominion Securities analyst Ryland Conrad sees Gildan Activewear Inc. (GIL-N<\/a>, GIL-T<\/a>) \u201cleaning on scale to drive steady value creation.\u201d <\/p>\n \u201cWe believe Gildan is well positioned to capture share over the medium-term (particularly within national accounts), supported by: (i) incremental program wins amidst a narrowing competitive landscape; (ii) a solid pipeline of differentiated product innovation; and (iii) its low-cost manufacturing platform with capacity to capitalize on near-shoring trends,\u201d he said. \u201cIn our view, the acquisition of Hanes further strengthens Gildan\u2019s ability to drive share gains and at a 2026 P\/E of 13.1 times, we continue to see value in the shares with an attractive 2026-2028 outlook supporting steady value creation.\u201d<\/p>\n Mr. Conrad said recent discussions on investors about the Montreal-based clothing manufacturer\u2019s third-quarter results, which are scheduled to be released on Wednesday before the bell, have been \u201cunsurprisingly\u201d overshadowed by its pending US$4.4-billion acquisition<\/a> of Hanesbrands Inc. (HBI-N<\/a>). However, he remains uncertain about the deal\u2019s impact on Gildan\u2019s guidance for the next fiscal year.<\/p>\n \u201cWhile the acquisition came as a surprise to most, feedback on the acquisition (expanded on within) has been broadly constructive with sentiment shifting more positively as confidence builds around the strategic merits and outlook,\u201d he said. \u201cAt a high level, most investors: (i) questioned the timing despite understanding the strategic rationale; (ii) are aligned with our view that visibility on the $200-million cost synergy target is high (potential for additional synergies has been a key debate); and (iii) were focused on whether Hanes can return to sustainable growth.\u201d<\/p>\n \u201cAgainst the backdrop of a still uncertain macro environment, we expect commentary around POS and demand trends through Q4\/25 and the extent of any changes to 2025 guidance to be in focus with management previously indicating that: (i) the market is expected to decline low-single digits in 2025, albeit with slight improvement as the year progresses due in part to easier year-over-year comps; (ii) 75 per cent of expected revenue growth for 2025 will be driven by new programs, the bulk of which are launching in H2\/25 including a large fleece program with a national account; and (iii) innerwear revenue growth is expected to improve sequentially (versus down 23.3 per cent in Q2\/25) as delayed program and product resets ramp up throughout the year.\u201d<\/p>\n Expecting the company to \u201cdeliver\u201d on its guidance for the third quarter, Mr. Conrad raised his target for Gildan shares to US$71 from US$68 with an \u201coutperform\u201d rating following estimate and valuation revisions. The average on the Street is US$71.20.<\/p>\n Elsewhere, Desjardins Securities\u2019 Chris Li raised his target to $95 (Canadian) from $80 with a \u201cbuy\u201d rating.<\/p>\n \u201cWe expect 3Q results to reflect continuing market share gains by GIL (product innovation, new brands, attractive price points etc) amid persistent macro pressures weighing on demand (industry down low single digits),\u201d said Mr. Li. \u201cWe do not expect 3Q results to be a catalyst but maintain our positive view, predicated on attractive earnings growth from the acquisition of HBI. At only 13.5 times pro forma P\/E, further multiple expansion is possible, supported by a more than 20-per-cent EPS CAGR (2026\u201328) and strong FCF conversion.\u201d<\/p>\n =====<\/p>\n Desjardins Securities analyst Gary Ho now thinks a recovery in North American farm conditions will \u201clikely be pushed out further into FY26 and FY27, although Brazil remains a key standout, highlighted by securing a meaningful commercial contract.\u201d <\/p>\n Ahead of the third-quarter results for Ag Growth International Inc. (AFN-T)<\/a>, which are scheduled to be released on Nov. 30, he lowered his earnings estimates through fiscal 2027, while also noting \u201cwe see upside on an Ag cycle recovery and potential U.S. government relief program for farmers.\u201d<\/p>\n \u201cNorth American farm markets remain soft with no clear signs of improvement,\u201c he said. \u201dRecent September Ag barometer (CME Group) readings point to similar trends, although farmers have increased expectations that a program similar to 2019\u2019s MFP will provide some relief. Tariff impacts, trade dynamics and commodity prices continue to weigh on capital equipment purchase decisions. AFN has been looking to pass on some tariff costs on portable equipment, similar to peers, with surcharges ranging from 4\u20136 per cent.\u201d<\/p>\n \u201cBrazil momentum continuing. The sizeable Brazil commercial order noted previously has been fully secured. It represents the largest project in AFN history (materializes in 2026). AFN saw positive corn\/ethanol market development, port infrastructure expansion and general infrastructure build-out. We expect AFN\u2019s order book to be up year-over-year in 3Q25, supported by a healthy international pipeline, with Brazil leading the charge.\u201d<\/p>\n Maintaining his \u201cbuy\u201d rating for the Winnipeg-based company\u2019s shares, Mr. Ho cut his target to $47 from $49. The average is $52.50.<\/p>\n \u201cOur positive investment thesis is predicated on: (1) strong growth in the Commercial and International businesses; (2) margin resiliency through operational excellence; (3) deleveraging; and (4) organic growth through product transfers and other initiatives (offset by weakness in North American farm),\u201d he explained.<\/p>\n =====<\/p>\n In other analyst actions: <\/p>\n * In response to the latest pre-feasibility study for its Cactus project, Scotia\u2019s Eric Winmill raised his Arizona Sonoran Copper Company Inc. (ASCU-T<\/a>) target to $5 from $4 with a \u201csector outperform\u201d rating. The average is $4.93.<\/p>\n * Stifel\u2019s Ian Gillies raised his Badger Infrastructure Solutions Ltd. (BDGI-T<\/a>) target to a Street-high $86 from $70 with a \u201cbuy\u201d rating. The average is $65.16.<\/p>\n \u201cWe recently toured BDGI\u2019s manufacturing facility in Red Deer, AB, which helped reaffirm our view that it is a strategically valuable asset, and that it is additive to the company\u2019s growth initiatives and return profile. In a fun with numbers exercise, we estimate the value to be ~US$950 mm if it were a standalone manufacturing facility (50% of EV). The company\u2019s growth trajectory remains robust with its data center and utility exposure already solid, and set to increase in 2026E. Separately, we outline why BDGI deserves a higher multiple than the 10-year average,\u201d said Mr. Gillies.<\/p>\n * Stifel\u2019s Daryl Young cut his FirstService Corp. (FSV-Q<\/a>, FSV-T<\/a>) target to US$215 from US$230 with a \u201cbuy\u201d rating, while Raymond James\u2019 Frederic Bastien reduced his target to US$215 from US$225 with an \u201coutperform\u201d rating. The average is US$203.<\/p>\n \u201cQ3 earnings were mostly fine, but the Q4\/25 outlook was disappointing. The roofing business continues to see the deferral of large projects (new construction and repair\/replace jobs), and the restoration platform has been stymied by a dearth of major storms and daily weather events. The weather impacts are disappointing, and we haven\u2019t seen a year like this since 2019 when FSV acquired GRH. However, weather is normal course and clearly transitory, setting up for easy comps in 2026. We are slightly more cautious on the roofing side as it could take several quarters for CRE new construction to improve, and in the meantime, competition for repair\/replace jobs may intensify. That said, bid activity remains solid and given the non-discretionary nature of roofing, conversion rates should inevitably improve. With the stock down 10 per cent [Thursday] (compared with less than a 1-per-cent increase in the NASDAQ), we think the bad news is priced in and would be buyers,\u201d said Mr. Young. <\/p>\n * TD Cowen\u2019s Derek Lessard raised his Premium Brands Holdings Corp. (PBH-T<\/a>) target to $145 from $140 with a \u201cbuy\u201d rating ahead of the release of its third-quarter results on Nov. 19. The average is $112.17.<\/p>\n \u201cBeef\/Pork prices are up 25 per cent\/17 per cent year-over-year but jumped 10 per cent\/13 per cent compared to Q2\/25,\u201d he said. \u201cThe good news is that prices are well off their peaks, and we expect pricing to catch-up in the coming quarters. Longer-term, we think the current valuation of 9.9 times forward consensus EBITDA is compelling given the impressive sales pipeline, sizable contribution margins, imminent FCF uplift, and consequently, meaningful deleveraging.\u201d<\/p>\n