Inside the Market\u2019s roundup of some of today\u2019s key analyst actions<\/p>\n
While Bombardier Inc.\u2019s (BBD.B-T<\/a>) second-quarter results <\/a>fell under his forecast, RBC Dominion Securities analyst James McGarragle thinks the important factor for investors to focus on is its free cash flow guidance, noting management is \u201cemphasizing all the building blocks are in place (strong orders, robust delivery pipeline, and a favorable mix) to achieve the higher end of their range.\u201d <\/p>\n \u201cThis translates to a 7-per-cent FCF yield on our 2025 estimate, which we believe represents a compelling investment opportunity given the runway to compound FCF at a low-teen CAGR [compound annual growth rate] for the next several years,\u201d he added. \u201cContinue to flag Bombardier as our top investment idea.\u201d<\/p>\n Shares of the Montreal-based airplane manufacturer slid 0.7 per cent on Thursday after it reported quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) of US$297-million, falling under both Mr. McGarragle\u2019s US$336-million forecast and the Street\u2019s estimate of US$336-million. He attributed the miss to a revenue and margin shortfall due to increased Challenger deliveries.<\/p>\n \u201cWe see Q2 results, however, as less impactful to sentiment given commentary that margins are expected to improve in H2 due to a pickup in Global deliveries,\u201d he said.<\/p>\n \u201cManagement reiterated their confidence in meeting the company\u2019s 2025 guidance, emphasizing that all key building blocks are in place to potentially achieve the higher end of their free cash flow range of $500-$800-million versus consensus coming into the quarter of $709-million. Management highlighted strong order activity, a robust delivery pipeline, and a favorable mix of aircraft deliveries, with a greater focus on high-margin Global models in the second half of the year. We continue to expect FCF to come in at the high-end of the guide ($795-million), which represents a FCF yield of 7 per cent and which we see as compelling given Bombardier\u2019s long-term growth outlook.\u201d<\/p>\n Mr. McGarragle emphasized Bombardier\u2019s demand environment is now \u201csolid\u201d with defence as \u201can important opportunity.\u201d<\/p>\n \u201cKey for us from the call was commentary that the U.S. market, bolstered by 100-per-cent bonus depreciation, continues to stimulate orders, while global interest in specialized mission aircraft like the Global 6500 and new European defense collaborations further strengthens the pipeline,\u201d he said. \u201cWe believe this points to a book-to-bill ratio of 1 times for the year (ex. large fleet order), which increases our confidence in the outlook <\/p>\n \u201cOur 2025 EBITDA estimate decreases to $1.55-billion (from $1.58-bilion), but in line with guidance for EBITDA of more than $1.55-billion, due to the Q2 miss; and our 2026 remains mostly unchanged at $1.7-billion. Target multiple increases to 10.5 times (from 9.5 times) driven by a favourable demand outlook.\u201d<\/p>\n Given that optimism, Mr. McGarragle hiked his target to a high on the Street of $202 from $175, maintaining an \u201coutperform\u201d recommendation. The average is $161.21, according to LSEG data.<\/p>\n \u201cBombardier shares remain inexpensive on a FCF basis while also having what we see as the best long-term growth opportunity in our coverage universe,\u201d he said.<\/p>\n Elsewhere, other analysts making adjustments include:<\/p>\n * Desjardins Securities\u2019 Benoit Poirier to $186 from $175 with a \u201cbuy\u201d rating.<\/p>\n \u201cWe have increased our EBITDA margin assumptions for 2H given the expected increase in Global deliveries as well as some defence deliveries, and have slightly reduced our FCF expectations for the year to US$658-million (from US$720-million) to account for the lower cash prepayments from the firm order and to build in some conservatism for the implied bookings uptick vs last year,\u201d said Mr. Poirier.”<\/p>\n * National Bank\u2019s Cameron Doerksen to $179 from $171 with an \u201coutperform\u201d rating.<\/p>\n \u201cAlthough Q2 results were below forecast, the fundamentals for the company remain positive, and we see further upside for the stock. For one, end market conditions for new business jet orders are positive, which gives us greater confidence that Bombardier can sustain aircraft deliveries at 150+ over a multi-year period. Secondly, Bombardier is already enjoying strong momentum in its Defense segment, but we expect further growth ahead. Thirdly, with leverage continuing to come down, and free cash flow expected to be strong in the coming years, we see the potential for capital to be deployed towards NCIB and potentially for tuck-in M&A,\u201d said Mr. Doerksen.<\/p>\n =====<\/p>\n RBC Dominion Securities analyst Nelson Ng raised his rating for Methanex Corp. (MEOH-Q<\/a>, MX-T<\/a>) on Friday, citing “better visibility” following the completion of the acquisition of OCI Global\u2019s methanol assets, the passage of U.S. President Donald Trump\u2019s \u201cOne Big Beautiful Bill\u201d and progress on U.S. tariff negotiations<\/p>\n “After the recent completion of the $2-billion acquisition of OCI\u2019s methanol assets, we estimate that over 60 pe rcent of the company\u2019s proportionate methanol production will be based in North America, where there is sufficient natural gas supply for the foreseeable future (Methanex\u2019s facilities that have varying degrees of gas supply constraints are in New Zealand, Chile, Trinidad, and Egypt),\u201c said Mr. Ng. \u201dWe also expect Methanex\u2019s average realized price to improve since the OCI methanol assets sell most of their product into North America and Europe, which have higher realized prices than Asia. Management expects Methanex\u2019s sales mix into Asia to decline to 35 per cent (from 45 per cent). <\/p>\n \u201cGetting more comfortable with economic uncertainty. Due to Methanex\u2019s sensitivity to methanol prices, we were previously concerned about how the U.S. tariffs imposed on countries (particularly China, the world\u2019s largest methanol consumer, producer and importer) would impact the global methanol market. After seeing some tariff negotiations get resolved or extended multiple times, we believe investors are more comfortable that the various governments will be able to navigate through tariff negotiations. We note that Methanex\u2019s produced methanol is not subject to tariffs (not traded between the U.S. and Canada\/China\/Mexico). \u201d<\/p>\n Following Wednesday\u2019s release of second-quarter financial results that exceeded his expectations, Mr. Ng also the Vancouver-based company presenting an \u201cattractive\u201d free cash flow yield.<\/p>\n \u201cAt the 15-year average methanol price of $350 per metric ton, we estimate that the company will generate an annual run-rate of $1-billion of Adjusted EBITDA (before cost synergies), driving an FCF yield of about 18 per cent,\u201d he said. \u201cWe expect the company will have the financial flexibility to deleverage below 3.0 times Debt\/EBITDA and initiate share buybacks in H2\/26.\u201d<\/p>\n Moving his recommendation to \u201coutperform\u201d from \u201csector perform\u201d previously, Mr. Ng maintained his target for Methanex shares of US$50. The current average is $49.50.<\/p>\n =====<\/p>\n National Bank Financial analyst Jaeme Gloyn said TMX Group Ltd.\u2019s (X-T<\/a>) \u201cslight\u201d second-quarter beat and \u201csolid underlying organic growth momentum\u201d reaffirms his view that its \u201cstrong operating performance continues to justify the premium valuation.\u201d<\/p>\n \u201cTMX continues to deliver positive operating leverage of 7 per cent as organic revenue growth of 13 per cent exceeded organic expense growth of 6 per cent,\u201d he added.<\/p>\n After the bell on Thursday, the Toronto-based company reported revenue of $422-million for the quarter, up 15 per cent year-over-year and matching Mr. Gloyn\u2019s estimate while exceeding the Street\u2019s $419-million projection. Adjusted earnings per share of 52 cents was a gain of 21 per cent a penny above expectations.<\/p>\n \u201cDerivatives (stronger capture rates at MX as CGF incentives unwound) and GSIA revenues drove the beat vs. the street and NBF as Capital Formation and Trading performed roughly in line,\u201d said Mr. Gloyn. \u201cWithin GSIA, all three of Trayport, VettaFi and Datalinx beat our estimates. In Capital Formation, strong additional listings revenues offset softer Issuer Services (lower interest income).\u201d<\/p>\n With the results, Mr. Gloyn reaffirmed is \u201cfavourable\u201d view of the company\u2019s long-term growth potential, while he also emphasize its \u201cstrong track record of strategic execution (e.g., diversify business mix, invest in tech\/data, grow derivatives and drive cost control) and defensive attributes (e.g., over 50-per-cent recurring revenue, diversified\/counter-cyclical revenue drivers, strong balance sheet and solid FCF generation).\u201d<\/p>\n \u201cOur estimates imply double-digit EPS growth rates through 2026 as we anticipate continued solid growth from TMX\u2019s rapid growth segments (e.g., Derivatives, Trayport, VettaFi, Issuer Services), upside in trading volumes near term given volatility, and a potential medium-term rebound in additional listings revenues as M&A activity flows through,\u201d he said. \u201cThat said, we maintain our Sector Perform rating considering a lower total return to our target price relative to other companies in our coverage universe.\u201d<\/p>\n With increases to his 2025 and 2026 earnings projections due to a \u201crobust outlook, the analyst raised his target by $1 to $59. The average is $59.25.<\/p>\n \u201cAlthough not the case in the current uncertain market backdrop, we continue to believe the current valuation premium could constrain share price upside, particularly if the market outlook were to improve meaningfully (i.e., risk-on trade),\u201d he noted.<\/p>\n =====<\/p>\n TD Cowen analyst Graham Ryding is \u201cencouraged\u201d by trends driving Element Fleet Management Corp. (EFN-T<\/a>) ahead of the Aug. 6 release of its second-quarter results, pointing to encouraged by several themes heading into Q2\/25 results, including \u201cdevelopments that support demand for syndication, a strengthening Mexican peso, and recent fleet-focused technology initiatives.\u201d<\/p>\n In a client note released late Thursday, he raised his full-year forecast by 1 per cent to the high end of the Toronto-based company\u2019s guidance, seeing \u201cpositive fundamentals\u201d that back up a \u201csolid\u201d longer-term outlook.<\/p>\n \u201cU.S. tax legislation (July 2025) reintroduces 100-per-cent bonus depreciation for capital investments (40 per cent previously),\u201d said Mr. Ryding. \u201cManagement previously indicated this should support increased yields for auto fleet syndication ($25-$30-million of syndication revenue annualized). We had some of this factored in, but we have increased our 2H\/25 and 2026 syndication yields. The Mexican peso has recovered above management\u2019s forecast within its 2025 guidance (20.5:1). We estimate, if current levels are sustained, this could translate into 1 per cent of revenue upside in 2025 (vs. guidance).<\/p>\n \u201cWe are encouraged by Element\u2019s emphasis on tech-enabled initiatives. Following on from the 2024 Autofleet acquisition (fleet technology software), Element recently announced a partnership with Samsara and launched \u2018Element Mobility\u2019. The Samsara partnership offers a more integrated data\/analytics offering to Element customers. The \u2018Element Mobility\u2019 initiative launches a separate division led by Kobi Eisenberg (President and founder of Autofleet), focused on innovation within fleet technology. Altogether we see potential for revenue-generating services, operating efficiencies (margin upside), and visibility towards an overall technology platform upgrade.\u201d<\/p>\n With his estimate adjustments, the analyst hiked his target for Element Fleet shares to $41 from $34, keeping a \u201cbuy\u201d recommendation. The average on the Street is $39.06.<\/p>\n \u201cElement has a strong track record of execution against guidance,\u201d he said. \u201cWe view 2025 guidance as constructive. The self-managed fleet market appears to be a deep and multi-year opportunity. Element has an attractive ROE, earnings growth, and FCF profile.\u201d<\/p>\n =====<\/p>\n TD Cowen analyst Michael Tupholme thinks recent fertilizer price gains are \u201csupportive\u201d of Nutrien Ltd.\u2019s (NTR-N<\/a>, NTR-T<\/a>) outlook for the second half of the year.<\/p>\n \u201cSince early-May 2025 (when NTR reported Q1\/25 results), key fertilizer prices are mostly higher,\u201d he said in a report previewing the Saskatoon-based company\u2019s Aug. 6 quarterly release. \u201cRegarding potash, key spot prices (U.S. Midwest, SE Asia, and Brazil) are up 4\u20136 per cent over this period (follows other gains seen earlier in the year). Although seasonality may limit further near-term price upside, we see year-to-date gains supporting an acceleration in Potash segment y\/y EBITDA growth over coming quarters.<\/p>\n \u201cFor nitrogen, while NOLA urea prices were under some pressure from early-May through mid-June, they have rallied of-late (up 25 per cent since mid-June\u2019s recent low). Meanwhile, for Tampa ammonia, which also pulled back in June, the August settlement price of $487 per ton (up $70\/t vs. July amid a tightening in global supply) represents a 17-per-cent increase from early-May\u2019s level.\u201d<\/p>\n Mr. Tupholme is now projecting adjusted EBITDA for Nutrien\u2019s second quarter of US$2.255-billion, which is a flat reading year-over-year (at US$2.235-billion in fiscal 2024) and narrowly below the Street\u2019s expectation of US$2.329-billion. He thinks gains in the Retail and Potash segments are likely to be offset by declines in Nitrogen and Phosphate.<\/p>\n \u201cWe are not expecting any notable changes to NTR\u2019s 2025 guidance as part of Q2\/25\u2019s results release,\u201d he added. \u201cThat said, we will be looking for updated market outlook commentary from management regarding fertilizer demand and pricing expectations. Our full-year 2025 adjusted EBITDA estimate of $5.864-billion compares to consensus of $5.737-billion.<\/p>\n Reiterating a \u201cbuy\u201d rating, Mr. Tupholme bumped his target for Nutrien shares to US$70 from US$67. The average is currently US$65.96.<\/p>\n \u201cWe see NTR as positioned to grow its Retail EBITDA and fertilizer sales volumes over our forecast period, while we are also encouraged by recent gains in fertilizer prices, which we see as supportive of our view that year-over-year growth in NTR\u2019s adj. EBITDA will emerge in Q3\/25. Further, we view NTR as offering attractive value,\u201d he said.<\/p>\n =====<\/p>\n In other analyst actions:<\/p>\n * Desjardins Securities\u2019 Gary Ho sees Ag Growth International Inc. (AFN-T<\/a>) \u201cshowing resilience in a tough farm environment,\u201d leading him to raise his target to $49 from $47 with a \u201cbuy\u201d rating following in-line second-quarter results. The average target on the Street is $51.13.<\/p>\n \u201cWhile the North American farm outlook remains murky, international commercial has hit full stride. The order book grew 4 per cent year-over-year with $100-million of additional new commercial wins post-2Q. While elevated leverage remains a sticking point, new FIDC funds should improve cash flow by 4Q. We are introducing our 2027 forecasts,\u201d said Mr. Ho.<\/p>\n * RBC\u2019s Pammi Bir increased his target for units of Allied Properties REIT (AP.UN-T<\/a>) by $1 to $18 with a \u201csector perform\u201d rating. The average is $18.25.<\/p>\n \u201cWith key operating metrics decelerating in Q2, traction needs to materially improve in the back half of the year for AP to hit guidance. Committed occupancy coming online should help, while broader office leasing velocity should build as employers increase utilization and new supply growth slows. Still, downside risks remain amid a sluggish economy. Combined with muted earnings growth, work to do on the balance sheet, and a high payout ratio, we reiterate Sector Perform,\u201d said Mr. Bir.<\/p>\n * RBC\u2019s Andrew Wong increased his Cameco Corp. (CCO-T<\/a>) target to $110 from $100 with an \u201coutperform\u201d rating, while Desjardins Securities\u2019 Bryce Adams raised his target to $110 from $105 with a \u201cbuy\u201d rating. The average is $103.07.<\/p>\n \u201cWe see Cameco as uniquely well-positioned within a growing nuclear industry with top tier assets across the nuclear value chain, from uranium and fuel services through to nuclear new builds. We think this growth potential justifies a premium valuation, especially the opportunity around new large reactor projects that are not fully reflected in estimates (therefore driving up valuation multiples). We remain positive on Cameco and see long-term upside in shares, although acknowledging potential for near-term volatility until uranium prices improve and\/ or we see more concrete nuclear developments (i.e. specific plans on U.S. new builds),\u201d said Mr. Wong.<\/p>\n * RBC\u2019s Greg Pardy increased his Cenovus Energy Inc. (CVE-T<\/a>) by $1 to $26 with an \u201coutperform\u201d rating, while Desjardins Securities\u2019 Chris MacCulloch bumped his target to $27.50 from $27 with a \u201cbuy\u201d rating. The average is $26.05.<\/p>\n \u201cCenovus delivered a solid quarter and has laid the track of higher mid- cycle free cash flow generation into 2026. The company emphasized that its three- year investment cycle is coming to an end\u2014that it has no gaps in its portfolio\u2014and that any potential acquisitions must compete with its organic opportunity set,\u201d said Mr. Pardy.<\/p>\n * National Bank\u2019s Maxim Sytchev increased his target for Colliers International Group Inc. (CIGI-Q<\/a>, CIGI-T<\/a>) to US$175 from US$169 with an \u201coutperform\u201d rating. Elsewhere, RBC\u2019s Jimmy Shan raised his target to US$185 from US$175 with an \u201coutperform\u201d rating. The average on the Street is US$170.<\/p>\n \u201cWhile we did not get organic advances in every vertical, having a balanced \/ diversified platform is the point when the operating backdrop is choppy. More importantly, the improved guidance (high-teens EBITDA growth vs. prior low-teens for 2025E) is split 50\/50 between accelerating organic momentum and timing\/scope of M&A closing. Engineering is showing strong growth, CM rebounded, Leasing will in Q3\/25E based on the current pipeline while tighter ops in Investment Management should also yield results (hence, in our view, the company\u2019s comfort to do more M&A in this vertical). Net-net, with 10-year rates being less of a drag, the U.S. trying to run its economy for stronger structural growth, cyclicals such as CIGI will continue to benefit,\u201d said Mr. Sytchev.<\/p>\n * RBC\u2019s Paul Treiber bumped his Coveo Solutions Inc. (CVO-T<\/a>) target to $12 from $11 with an \u201coutperform\u201d rating. The average is $10.44.<\/p>\n * Mr. Treiber also raised his Information Services Corp. (ISC-T<\/a>) target to $32 from $30 with a \u201csector perform\u201d rating. The average is $34.30.<\/p>\n * With Thursday\u2019s announcement of the acquisition of a 40-per-cent stake in Pleasant Valley Corp. for US$58.3-million, National Bank\u2019s Zachary Evershed raised his Dexterra Group Inc. (DXT-T<\/a>) target to $13 from $12.50 with an \u201coutperform\u201d rating. The average is $11.75.<\/p>\n \u201cGiven its size and IFM mix, we assume PVC sports 8-per-cent margins, which implies a 10 times acquisition multiple. The elevated price tag is in line with industry transactions, and likely warranted for a platform as PVC brings all the necessary infrastructure and relationships for a distributed IFM model, complementing CMI\u2019s primarily self-serve offering. The distributed model is particularly well-suited to clients with numerous locations (e.g., 20 logistics warehouses and 500 retail locations across the country), leveraging subcontractors to quickly scale up or down in diverse geographies as required, with the company\u2019s proprietary tech, PVC Connect, providing the necessary digital infrastructure for both client- and contractor-facing operations,\u201d said Mr. Evershed.<\/p>\n * RBC\u2019s Sabahat Khan increased his GFL Environmental Inc. (GFL-N<\/a>, GFL-T<\/a>) target to US$59 from US$56, keeping an \u201coutperform\u201d rating. Other changes include: National Bank\u2019s Michael Doumet to $78.50 (Canadian) from $76.50 with an \u201coutperform\u201d rating. The average on the Street is US$55.52.<\/p>\n \u201cGFL Environmental Inc. delivered strong Q2 results, beating expectations and revising 2025 revenue\/Adj. EBITDA guidance higher,\u201d said Mr. Khan. \u201cNotably, growth and margin expansion were the best among the Waste Majors, with industry-wide recycling commodity\/RIN price + FX headwinds being more than offset by strength in the underlying business. Looking ahead, we believe the company is well positioned to continue its momentum through the remainder of 2025 and into 2026.\u201d<\/p>\n * Following a \u201clargely in-line performance\u201d in the second quarter, National Bank\u2019s Vishal Shreehar raised his Gidan Activewear Inc. (GIL-N<\/a>, GIL-T<\/a>) target to US$80 from US$78 with an \u201coutperform\u201d rating. The average is US$59.87.<\/p>\n \u201cWe believe that Gildan is a solid company; it has many drivers for EPS growth, including: (i) revenue growth (new capacity, market share growth, product innovation, new programs, pricing etc.), (ii) improving costs (input costs, efficiency initiatives, etc.), and (iii) share repurchases,\u201d said Mr. Shreedhar.<\/p>\n * RBC\u2019s Rob Mann trimmed his Gran Tierra Energy Inc. (GTE-T<\/a>) target to $8.50 from $9 with a \u201csector perform\u201d rating. The average is $10.10.<\/p>\n \u201cGran Tierra delivered solid second-quarter results and has a number of strategic initiatives underway to enhance its liquidity to begin making progress towards deleveraging its balance sheet. While the company appears to be generating some positive operating momentum, we view debt reduction as the most critical component of the story in the quarters to come,\u201d said Mr. Mann.<\/p>\n * As its \u201cstrong operational performance continues,\u201d National Bank\u2019s Shane Nagle raised his Kinross Gold Corp. (K-T<\/a>) target by $1 to $28, exceeding the $27.69 average, with an \u201coutperform\u201d rating.<\/p>\n \u201cKinross remains a Top Pick in our Senior Gold Producer universe due to its attractive valuation, strong FCF yield supporting shareholder distributions, above-average sensitivity to gold prices and relatively low\/improving geopolitical risk profile,\u201d said Mr. Nagle. \u201cOur target has increased given that we have lowered our 2025 cash cost estimate and a modest increase in 2025 production.\u201d<\/p>\n * Seeing its first-quarter 2026 results as a \u201csteady start to a plan laid out at the Company\u2019s recent Investor Day,\u201d National Bank\u2019s Richard Tse raised his Lightspeed Commerce Inc. (LSPD-N<\/a>, LSPD-T<\/a>) target to US$15 from US$13 with a \u201csector perform\u201d rating. The average is US$13.81.<\/p>\n \u201cFQ1 was solid but given the history, we\u2019d prefer to see a string of consecutive execution results, particularly on location growth, to support a more sustained valuation re-rating,\u201d he added.<\/p>\n * RBC\u2019s Irene Nattel move her target for Maple Leaf Foods Inc. (MFI-T<\/a>) to $35 from $33 with an \u201coutperform\u201d rating. The average is $34.53.<\/p>\n \u201cConstructive tone to 2025 with: i) normalizing pork markets including solid hog production spreads in Q2, ii) planned H2 spin-out of Canada Packers on track for late Q3\/early Q4 pending regulatory approval, and iii) ability to drive revenue, accelerate the innovation pipeline to address evolving consumer needs and preferences, and to capitalize on Buy Canadian. As in Q1, we anticipate better mix, volume, and value across all segments, with Canada Packers further underpinned by a more favourable operating\/market backdrop,\u201d she said.<\/p>\n * Desjardins Securities\u2019 Alexander Leon increased his Morguard North American Residential REIT (MRG.UN-T<\/a>) target to $22 from $20 following better-than-expected quarterly operating results. The average is $22.25.<\/p>\n * Mr. Tse lowered his target for Real Matters Inc. (REAL-T<\/a>) to $5.75 from $6.50, below the $7.29 average on the Street, with a \u201csector perform\u201d rating.<\/p>\n \u201cGiven the shortfall in the quarter and continued backdrop, we are reducing our FQ4\u201925\/FY26 forecasts,\u201d he said. \u201cLonger term, we remain constructive on Real Matters\u2019 positioning as the Company continues to onboard new clients, including launching on four new clients including the largest credit union in the U.S. onto the Title platform. Subsequent to quarter end, Real Matters launched its second Tier 1 lender in U.S. Title, a top 15 lender in U.S. Appraisal, as well as significantly expanding market share with a top 50 lender. These developments, combined with available capacity and disciplined cost management position Real Matters well for operating leverage when volumes recover. That said, at this point visibility into that normalization is still uncertain; as such, we see a balanced risk-to-reward profile for Real Matters. We maintain our Sector Perform rating and lower our price target to $5.75 (was $6.50) on the back of our lower forecasts.\u201d<\/p>\n * In a note released after its quarterly results titled When the gas is flowin\u2019 the cash is growin\u2019…, National Bank\u2019s Patrick Kenny bumped his TC Energy Corp. (TRP-T<\/a>) target to $76 from $75 with an \u201coutperform\u201d rating. The average is $73.80.<\/p>\n