Inside the Market\u2019s roundup of some of today\u2019s key analyst actions<\/p>\n
Following its highly anticipated Investor Day event<\/a>, TD Cowen analyst Sean Steuart thinks Northland Power Inc.\u2019s (NPI-T<\/a>) slower relative growth outlook than the Street expected supports a valuation discount, leading him to downgrade his recommendation for its shares to \u201chold\u201d from \u201cbuy\u201d previously.<\/p>\n \u201cTarget 6-per-cent free cash flow per share CAGR [compound annual growth rate] over the next five years – from a low starting point – is below both prior consensus expectations and the target growth rates of peers,\u201d he said. \u201cBeyond current construction projects, NPI is taking a measured approach to organic expansion, reflecting higher IRR hurdles.\u201d<\/p>\n The event came in the wake of a surprise 40-per-cent cut in its dividend announced in tandem with third-quarter results<\/a> last week. That has led to a drop in share price of almost 30 per cent. <\/p>\n \u201cWe initially attributed most of the rationale for the cut in dividend to providing more funding flexibility, but [Thursday\u2019s] presentation made it clear that the sell-side, including us, had overly optimistic growth forecasts through 2027.\u201d<\/p>\n \u201cThe 40-per-cent dividend cut and relatively modest midterm FCF\/share growth rate guidance (6 per cent through 2030) were negative surprises. We believe that management is sending appropriate signals regarding a measured approach to expansion, beyond the current construction pipeline, but a relatively conservative organic growth path corresponds with an appropriate valuation discount, in our view. Management remains focused on asset-base expansion, but we believe that starting a share buyback program would send a positive message to investors that value is not exclusive to development projects.\u201d<\/p>\n Mr. Steuart lowered his free cash flow per share estimates for 2026 and 2027 (adjusted for asset contributions\/ timing and higher interest\/corporate costs). That led him to cut his target for Northland shares to $19 from $22. The average is $24.25.<\/p>\n \u201cAfter Thursday\u2019s decline [of 2.1 per cent], NPI is trading at 8.4 times 2027E TEV\/EBITDA vs. an average of 9.7 times for its Canadian and international IPP peers,\u201d he added. \u201cWe believe that NPI\u2019s discount is warranted by tempered organic growth prospects. Although not factored into our target price, we cannot rule out the possibility of strategic players showing interest in NPI at current valuation levels.\u201d<\/p>\n Elsewhere, other analysts making target revisions include: <\/p>\n * Scotia Capital\u2019s Robert Hope to $23 from $24 with a \u201csector perform\u201d rating. <\/p>\n \u201cThe presentation highlighted how increasing electricity demand is requiring new capacity to be constructed, which is presenting opportunities for Northland,\u201d said Mr. Hope. \u201cThe management team added clarity on their key areas (geography, technology) of focus for capital allocation over the next few years. Additional clarity was provided on the recent 40-per-cent dividend cut and how the lower levels better position the company to grow. While our EBITDA estimates are largely unchanged, we have re-calibrated our distributable cash flow estimates lower. The lower cash flow reduces our target price by $1 to $23. Northland is currently trading at 7.7 times 2027 estimated EV\/EBITDA (based on recent trading), well below our target multiple of 9.1 times. This implies a healthy amount of valuation expansion and share price returns, though we believe the shares could be range-bound until there is greater visibility on the offshore wind projects entering service in H2\/26.\u201d<\/p>\n * ATB Capital Markets\u2019 Nate Heywood to $23 from $26 with an \u201coutperform\u201d rating,.<\/p>\n \u201cThe presentation highlighted NPI\u2019s refined focus to continue growth in core markets and a growth outlook through 2030. Core markets include both Canada and Europe, with Europe consisting of Poland, Spain and the UK. Southeast Asia is no longer a point of focus through 2030, but fundamentals remain strong through the 2030s which could bring it back in favour. The growth portfolio consists of 2.2GW under construction and ~9.2GW of unsanctioned projects, 0.4GW are late-stage, which includes today\u2019s announced acquisition of an aggregate 300MW of battery projects in Poland. Management also illustrated ongoing progress of its more technology-agnostic approach, highlighting a mid-stage 120MW natural gas peaker project in Alberta (Collisard). The comprehensive 2030 outlook included plans to add 1.4GW-1.8GW of incremental capacity and capital requirements of ~$5.8bn-$6.6bn and FCF guidance of $1.55-$1.75 per share (6-per-cent CAGR from 2025 guidance midpoint). Growth spending includes a significant proportion of project debt and some partner equity, but management has also flagged potential for monetizations to fund a portion of its expected $0.9-billion equity component. The FCF outlook is notably softer than our previous expectations through our forecast window despite expected additions of $1.25 per share from new growth projects (~$0.82 from Hai Long, Baltic Power and Jurassic BESS), with impacts from interest, hedges, taxes, PPA step-downs and potential dispositions, among other items,\u201d said Mr. Heywood.<\/p>\n =====<\/p>\n After gold and silver producers delivered a \u201cvery strong\u201d third quarter, \u201csupported by record commodity prices, expanding margins, and increasing FCF,\u201d equity analysts at TD Cowen are now expecting \u201ceven better\u201d results in the current quarter with gold prices continuing to rise.<\/p>\n \u201cQ3 was a strong quarter for the sector with 25 out of 32 companies beating consensus on EPS,\u201d analysts Steven Green, Wayne Lam and Derick Ma said. \u201cOverall production was just modestly ahead of expectations and costs were slightly higher, largely due to cost creep as cost escalators tied to gold price kick in. <\/p>\n \u201cProducer discipline continues to drive record margins. Gold averaged $3,460\/oz in Q3, a 5.3-per-cent increase quarter-over-quarter. The gold price Q3-to-date is averaging $4,054, approximately 17 per cent above the Q3 average. AISC [all-in sustaining cost] margins increased to another record high of 54 per cent in Q3, up from 52 per cent in Q2 and well above the five-year average of 36 per cent. Producers continue strong execution this cycle, prioritizing balance sheet strength and capital returns over lower margin ounces or capital intensive expansion. Record free cash flow generation. Our producer coverage quarterly FCF was $6.4-billion in Q3, a 56-per-cent increase quarter-over-quarter from $4.1-billion in Q2\/25. We expect FCF to continue to grow in Q4 supported by stronger gold price and relatively steady capital deployment.\u201d<\/p>\n In a research report released late Thursday, the analysts think free cash flow and capital returns will remain a focus for investors, \u201cand along with ongoing sector consolidation, should lead to improving multiples in our view.\u201d<\/p>\n \u201cCapital returns continue to gain momentum,\u201d they said. \u201cSenior producers under our coverage deployed $1.7-billion in buybacks in Q3, up 13 per cent from Q2 ($1.5-billion). Capital return announcements in Q3 further strengthened sector sentiment: Barrick approved an additional $500-million in buybacks and raised its dividend by 25 per cent; Kinross increased its buyback allocation by 20 per cent (to $600-million) and lifted its dividend by 17 per cent; Lundin Gold distributed 100 per cent of normalized FCF through its dividend framework; and IMG approved a new NCIB. <\/p>\n \u201cM&A activity picking up; recent deals include New Gold\/Coeur, Fresnillo\/Probe \u2014 as well as divestment of assets like Hemlo, Tongon, AGI\u2019s Turkish projects. In general, the markets have been receptive to M&A. We expect M&A to remain active, with potential targets in our view include Artemis, IMG, CG, and Torex.”<\/p>\n The analysts made a series of target price adjustments for stocks in their coverage universe. Their changes included:<\/p>\n Alamos Gold Inc. (AGI-T<\/a>, \u201cbuy\u201d) to $55 from $56. The average on the Street is $61.27.Artemis Gold Inc. (ARTG-T<\/a>, \u201cbuy\u201d) to $43 from $44. Average: $46.47.B2 Gold Corp. (BTO-T<\/a>, \u201chold\u201d) to $7.50 from $8. Average: $7.97.Eldorado Gold Corp. (EGO-N<\/a>\/ELD-T<\/a>, \u201chold\u201d) to US$31 from US$33. Average: US$36.40.Endeavour Mining PLC (EDV-T<\/a>, \u201cbuy\u201d) to $73 from $72. Average: $74.32.New Gold Inc. (NGD-N<\/a>\/NGD-T<\/a>, \u201chold\u201d) to US$7.50 from US$7. Average: US$8.21.SSR Mining Inc. (SSRM-T<\/a>, \u201chold\u201d) to $33 from $35. Average: $34.28.Torex Gold Resources Inc. (TXG-T<\/a>, \u201cbuy\u201d) to $78 from $77. Average: $79.25.<\/p>\n \u201cOur top picks are Agnico-Eagle and Barrick among the large caps; IAMGOLD, Equinox, and K92 among the SMID caps; and Royal Gold among the royalties,\u201d the analysts said.<\/p>\n =====<\/p>\n TD Cowen analyst Craig Hutchison expects Capstone Copper Corp. (CS-T<\/a>) to deliver record production and EBITDA next year \u201cdriven by operational improvements across its portfolio.\u201d<\/p>\n \u201cHigher production is expected to coincide with our expectation for a tight copper market driven by supply constraints,\u201d he added. \u201cBeyond 2026, we see lowrisk production growth from its flagship Mantoverde asset in 2027, along with longer-term growth potential from Santo Domingo.\u201d<\/p>\n Pointing to its \u201cstrong copper leverage in a tight market,\u201d he named it his \u201cbest idea\u201d for 2026 in a client note released Friday.<\/p>\n \u201cCapstone has the second-highest torque to copper in our coverage universe, with copper expected to drive more than 90 per cent of its revenue through 2028,\u201d said Mr. Hutchison. \u201cWe anticipate supply-driven deficits in 2026 resulting in copper prices of $5.25\/lb next year propelling record EBITDA. Furthermore, with several upcoming catalysts, a solid growth pipeline in low-risk jurisdictions, & continued operational improvements, we see CS as having the best potential to outperform peers on a risk-adjusted basis.<\/p>\n \u201cWhat Is Underappreciated Or Misunderstood? Capstone has significantly de-risked its Mantos Blancos and Mantoverde operations in Chile throughout 2025, setting the stage for improved production & costs into 2026. Beyond growth from improved operational performance, Capstone is developing the Mantoverde Optimization, which is expected to add 20ktpa of Cu production starting late next year at a capital intensity of $9,000\/t. Moreover, we believe there is the potential for a BHP Copper Cities\/ Pinto Valley deal (whether JV or partnership) which could provide significant upside. Separately, CS has deleveraged its balance sheet below its target level of less than 1.0 times net debt\/ EBITDA required to sanction Santo Domingo (now at 0.9 times as of Q3\/25 vs. 1.8 times in Q3\/24).\u201d<\/p>\n The analyst kept a \u201cbuy\u201d rating and $14 target for Capstone shares. The average on the Street is $14.29.<\/p>\n =====<\/p>\n RBC Dominion Securities analyst Rob Mann sees Cardinal Energy Ltd. (CJ-T<\/a>) continuing to \u201cgenerate positive momentum amid the company\u2019s ramp-up of production at its 6,000 bbl\/d SAGD project at Reford, which is tracking well ahead of schedule.\u201d<\/p>\n “While Cardinal\u2019s shares have performed strongly year-to-date, we believe the company has found its niche and still offers compelling organic (thermal) growth optionality, alongside a meaningful dividend as the portfolio transformation takes shape,” he added.<\/p>\n Mr. Mann came away from investor meetings with executives of the Calgary-based company taking a \u201cpositive\u201d view of its rate of change, believing it offers \u201cinvestors exposure to material (in the context of Cardinal\u2019s portfolio) organic thermal production growth, while getting paid to wait.\u201d<\/p>\n \u201cCardinal highlighted the production ramp-up period at Reford remains well ahead of the company\u2019s expectations, averaging approximately 4,000 bbl\/d in the first week of November, with an initial steam-oil-ratio (SOR) likely to trend below 3.0 times before stabilizing,\u201d he said. \u201cWhile the company is remaining disciplined with respect to its original reservoir management plan, we get the sense that Reford could achieve nameplate capacity prior to year-end. <\/p>\n \u201cOrganic Thermal Opportunities. The company would expect to have a second thermal project (6,000+ bbl\/d) sanction ready in early 2026, however this will depend upon supportive market conditions. The company has a third project which has been delineated of similar scale, with a fourth potential project currently being assessed. In the right market conditions, Cardinal could see the potential for over 20,000 bbl\/d of thermal production within its portfolio in the next 3-5 years at individual project costs of around $30,000\/bbl\/d ($170-$180 million), though continually highlighted this will be managed in the context of maintaining a net debt to cash flow ratio in the 1.0 times range alongside funding of the base dividend.\u201d<\/p>\n After updating his 2025 and 2026 estimates to \u201creflect the accelerated ramp-up of Reford production and further details surrounding initial marketing efforts of the company\u2019s thermal production,\u201d Mr. Mann raised his target for Cardinal shares by $1 to $9.50, which exceeds the $8.42 average on the Street.<\/p>\n ===== <\/p>\n Desjardins Securities analyst Benoit Poirier came away from Stella-Jones Inc.\u2019s (SJ-T<\/a>) Investor Day event this week \u201cencouraged\u201d and believes its mid-single-digit organic growth target for its Utility Poles business is \u201cconservative\u201d and \u201clikely reflects recent and temporary customer capex timing and spot market headwinds.\u201d <\/p>\n \u201cThis view is reinforced by SJ\u2019s positive comments on growing momentum with U.S. utility customers and the potential for a Locweld U.S. greenfield facility (not included in targets),\u201d he added. \u201cIf SJ delivers on its 10-per-cent-plus EPS growth goal, a multiple re-rating seems likely.\u201d<\/p>\n \u201cMath behind the more than 10-per-cent EPS growth algorithm. This target would be mainly driven by profitability levers and share buybacks (although SJ mentioned that replacing some of the buybacks with M&A could also get it to 10 per cent plus). Updating our model for our new estimates, we calculate that for SJ to achieve its 10-per-cent EPS growth target, the company would have to repurchase $534-million of shares, equivalent to a 3-per-cent CAGR [compound annual growth rate] reduction in share count over the period.\u201d<\/p>\n In a client note released before the bell, Mr. Poirier showed enthusiasm for the Montreal-based company\u2019s active search for \u201copportunities adjacent to its core business such as tubular steel poles (only less than 5 per cent of Locweld\u2019s sales and is an untapped market).\u201d <\/p>\n \u201cSJ did not focus on its Residential Lumber segment in the presentation and stated that \u2018anything is for sale for the right price\u2019,\u201d he added. \u201cWe would view a divestiture of the business positively as the segment is a slight margin drag, and a sale could potentially reclassify SJ\u2019s GICS industry\/index, leading to multiple re-rating. Moreover, this would provide additional funds that SJ could deploy toward M&A.\u201d<\/p>\n After raising his earnings expectations through 2027 and adjusting his valuation, Mr. Poirier raised his target for Stella-Jones shares to $102 from $94, reiterating a \u201cbuy\u201d rating. The average on the Street is $91.61.<\/p>\n \u201cStock could be worth $113\/share by 2028 if SJ delivers on its ambitions,\u201d he concluded. \u201cWe see additional sources of upside to our base-case estimates: construction of a Locweld U.S. greenfield facility that would come online in 2028 and boost organic growth ($117\/ share); deploying C$1b toward incremental M&A with pro forma leverage ending 2028 at 2.6 times ($118\/share); and multiple expansion to 10.5x EV\/EBITDA on our base 2028 estimates, driven by strong EPS growth ($125\/share).\u201d <\/p>\n =====<\/p>\n In other analyst actions:<\/p>\n * After hosting U.S. virtual investor meetings, Raymond James\u2019 Michael Glen hiked his Groupe Dynamite Inc. (GRGD-T<\/a>) target to $72 from $55 with an \u201coutperform\u201d rating. The average is $64.25.<\/p>\n \u201cKey focal points for the meetings were brand momentum\/brand heat, unit growth, marketing strategy + success with \u2018pyramid\u2019 approach to social spending, inventory efficiency and capital allocation. We would characterize the meetings as quite positive with management speaking to an operation that is performing exceptionally well,\u201d said Mr. Glen. \u201cHeading into the F3Q results, we are moving our estimates higher and raising out target price to $72<\/p>\n \u201cManagement outlines a growth algorithm that points to 13-16 per cent sustainable top-line growth over the long-term (current results substantially exceeding this pace, and we are forecasting 26 per cent in F2025E), driven by a combination net new store openings, square footage growth, real estate repositioning, SSSG (price and traffic), and eCommerce.\u201d<\/p>\n