Inside the Market\u2019s roundup of some of today\u2019s key analyst actions<\/p>\n
RBC Dominion Securities analyst James McGarragle sees an \u201cimproved steel price outlook as well as reflecting improving demand fundamentals\u201d that he expects to benefit results at Russel Metals Inc. (RUS-T<\/a>).<\/p>\n \u201cWe are increasing our steel price estimates to reflect strong pricing trends, which we expect to persist given an improving demand outlook as both Canadian and U.S. PMI readings remain above 50,\u201d he said. \u201cWe note that while U.S. PMI has maintained strong momentum, Canadian readings have also benefited from defence industrial spending and Buy Canadian policies, which we see as a positive for domestic industrial demand. However, we highlight the ABI is trending below 50 and fell to 44.5 in May. <\/p>\n \u201cFurthermore, the Canada-U.S. steel price gap remains wide, with domestic sheet prices still at a meaningful discount to U.S. levels as tariffs continue to suppress realized Canadian pricing and excess sheet supply persists. We expect index prices to trend at current levels into Q3 and then to $1,050\/st into 2027.\u201d<\/p>\n In a client report released before the bell on Tuesday previewing second-quarter results in the industry, Mr. McGarragle emphasized a divergence in fortunes between Toronto-based Russel and peer Algoma Steel Group Inc. (ASTL-T<\/a>).<\/p>\n \u201cAlgoma\u2019s shares were roughly flat in Q2, up 1 per cent, trailing the steel producer group average of 19 per cent, in our view reflecting continued uncertainty related to steel tariffs,\u201d he explained. \u201cRussel shares traded up 24 per cent in Q2, outperforming U.S. distributor peers WS and RYI which were roughly flat, reflecting a partial closing of Russel\u2019s valuation gap vs. Reliance, deserved in our view, driven by strong execution and opportunistic capital allocation over recent quarters. <\/p>\n \u201cThe share price strength was also likely supported by positive management commentary on the demand environment at our conference, improving PMI readings, and a stabilizing LTL [less-than-truckload] freight backdrop, all of which point to better industrial activity and distributor volumes in Q2 and heading into Q3.\u201d<\/p>\n Mr. McGarragle thinks the key focus of investors heading into earnings season remains the outlook for steel pricing and \u201cwhether recent pricing strength is sustainable (we believe it is) as well as if demand momentum persists during the rest of the year (we believe it will).\u201d<\/p>\n While he raised his forecast for Algoma, he maintained his \u201csector perform\u201d rating and $7 target. The average target on the Street is $8.52, according to LSEG data.<\/p>\n \u201cOur Q2 EBITDA estimate moves to a loss of $67-million (from a loss of $87-million), roughly in line with consensus of a loss of $64-million, on the back of higher steel prices,\u201d he explained. \u201cHowever, we note that Canadian steel prices continue to trade at a significant discount to the U.S. benchmark, and we therefore see a high degree of uncertainty related to our updated estimates. Our 2026 EBITDA estimate increases to a loss of $158-million (from a loss of $198-million), in line with consensus a loss of $160-million. This reflects higher steel price assumptions for 2026. We continue to expect Algoma to achieve breakeven EBITDA by year-end and model for $209-million of EBITDA in 2027 (from $201MM), ahead of consensus $176-million, aided by a narrower Canadian steel price discount and lower expected tariff rates.\u201d<\/p>\n For Russel, he maintained his outlook for the quarter but moved his price target for its shares higher to $68 from $63 with an \u201coutperform\u201d rating. The average is $60.<\/p>\n \u201cOur Q2 EPS estimate remains at $1.07, in line with consensus of $1.07,\u201d he said. \u201cThat said, our EPS estimate reflects a meaningful performance in the quarter, which we do not believe is factored into consensus numbers; and we therefore view our estimate as representing significant upside versus what is being built into street estimates. Our 2026 EPS estimate also increases to $3.85 (from $3.76), ahead of consensus $3.81, driven by an improving industrial outlook that we see Russel as well positioned to capitalize on.\u201d<\/p>\n Following recent institutional meetings with RB Global Inc.\u2019s (RBA-N<\/a>, RBA-T<\/a>) management and \u201csupplementary industry\/data checks that further strengthen [his] investment thesis,\u201d Raymond James analyst Steve Hansen upgraded its shares to a \u201cstrong buy\u201d recommendation from \u201coutperform\u201d previously.<\/p>\n \u201cIn short, we believe RBA will continue to benefit from a series of positive vectors including: 1) sustained market share gains at IAA, including a healthy volume re-acceleration in 2Q26; 2) improving macro signals in CC&T; 3) a strong pipeline of strategic growth opportunity, both organic and M&A; and 4) a shareholder-friendly capital allocation framework that now includes active share repurchases,\u201d he said.<\/p>\n Mr. Hansen\u2019s bullish stance centres on a forecast for a re-acceleration in auto volumes in the second quarter, while he notes the company\u2019s commentary aligns with his view of \u201cstrong gains being observed.\u201d<\/p>\n \u201cManagement expects salvage volumes to re-accelerate in 2Q26 following a slowdown in 1Q26 (up 0.9 per cent year-over-year) that was largely attributed to: 1) the pull-forward of certain auctions into 4Q25; and 2) severe January weather that impacted planned auction activity,\u201d he added. \u201cFurther supporting this outlook are recent contract renewals with IAA\u2019s two largest customers \u2014 both of which reportedly boosted volume commitments. As we highlight below, Auto volumes have accelerated very nicely since these recent contract renewals.\u201d<\/p>\n \u201cPath To 50\/50 on Track, More \u2018Shots on Net\u2019 in 2H26 & 2027. Management remains confident that IAA will continue to recapture market share from its largest competitor with the pathway back to 50\/50 still the long-term target. Recent contract renewals reinforce this view, with management now estimating IAA\u2019s market share in the \u2018high-30s\u2019 (\u2018approaching 40 per cent\u2019) vs. \u2018low-30s\u2019 at the time of the acquisition. With RBA facing no major customer renewals over the next 2+ years, management reiterated it expects to capitalize on more \u2018shots on net\u2019 vs. its largest competitor that reportedly faces \u201cmultiple\u201d contract renewals over the same period.\u201d<\/p>\n Mr. Hansen kept a target of US$145 per share. The current average is US$126.<\/p>\n Raymond James\u2019 Sean Jack initiated coverage of Hammond Power Solutions Inc. (HPS.A-T<\/a>) with an \u201coutperform\u201d rating, seeing it \u201cuniquely positioned to deliver outsized growth through our forecast horizon, supported by its leadership in the North American dry-type transformers market, deep customization expertise, diversified manufacturing footprint, and exposure to powerful secular tailwinds.\u201d<\/p>\n \u201cInvestment in AI infrastructure, data centres, electrification, renewable energy, and grid modernization is driving unprecedented demand for transformers and power quality equipment. With industry manufacturing capacity still constrained, we believe HPS is well-positioned to capitalize on a multi-year infrastructure investment cycle,\u201d he added.\u201c<\/p>\n \u201cComplex projects play directly into HPS\u2019s strengths. Electrification, AI infrastructure, renewable power, and grid modernization are driving increasingly complex electrical projects that require customized solutions. Backed by decades of engineering expertise and a proprietary database containing more than one million transformer designs, we believe HPS is exceptionally well-positioned to win higher-value projects where reliability and customization matter most.\u201d<\/p>\n In a client report titled Built for the Power Supercycle, Mr. Jack said the Guelph, Ont.-based company\u2019s diversified manufacturing footprint is \u201ca competitive advantage\u201d as it transitions into \u201cmore than a transformer company.\u201d<\/p>\n \u201cHPS is North America\u2019s largest dry-type transformer manufacturer, with facilities across Canada, the U.S., and Mexico,\u201d he said. \u201cWhile tariffs have created uncertainty across the electrical equipment supply chain, we believe HPS\u2019s diversified footprint balances low-cost production with local market access, supporting both profitability and customer responsiveness.<\/p>\n \u201cThe pending acquisition of AEG Power Solutions expands HPS\u2019s reach into adjacent mission-critical markets, including power quality, uninterruptible power supply, power conversion, and aftermarket services. We believe the transaction broadens the company\u2019s addressable market and marks another step toward becoming a more diversified electrical equipment platform.\u201d<\/p>\n Seeing \u201cimpressive growth ahead,\u201d Mr. Jack set a target for Hammond shares of $405. The average on the Street is $360.60. <\/p>\n \u201cSupported by differentiated engineering expertise, a strategic manufacturing footprint, and generational demand tailwinds across multiple end markets, we forecast revenue and adj. EBITDA CAGRs of 27 per cent and 34 per cent, respectively, between 2025-2028,\u201d he said. \u201cWhile our forecasts exclude additional acquisitions, we expect strong FCF generation will provide ample flexibility to pursue further M&A.\u201d<\/p>\n Elsewhere, Acumen Capital\u2019s Jim Byrne raised his target to $365 from $345, keeping a \u201cbuy\u201d rating, following the close of its $365-million acquisition of AEG Power Solutions on Monday.<\/p>\n \u201cWe believe the company is still in the early stages of growth in revenue driven by the massive investment in data centres to be deployed over the next several years. The company\u2019s share price valuation has been re-rated higher as they continue to execute on their strategy and take advantage of the electrification and data centre tailwinds. AEG broadens the company\u2019s geographic reach and product portfolio further,\u201d said Mr. Byrne.<\/p>\n National Bank Financial analyst Vishal Shreedhar predicts Metro Inc.\u2019s (MRU-T<\/a>) ongoing strike at its Laval, Que., fresh produce distribution centre will have a \u201cmeaningful and largely transitory impact\u201d on its third-quarter financial results.<\/p>\n \u201cMetro provided an update<\/a> to the ongoing strike in Quebec on June 25, 2026, which we understand is yet to conclude negotiations,\u201d he said. \u201cWhile an extended period of strike may result in further financial impact, our view is that it will ultimately prove to be largely transitory, and hence our F2027+ estimates are primarily unchanged.\u201d<\/p>\n Mr. Shreedhar is now projecting earnings per share of $1.25 for the quarter, falling in line with the mid point of the Montreal-based grocer\u2019s guidance, but down from $1.52 a year ago. He attributes that 17-per-cent decline largely to the impact from the strike in Quebec, which began on March 30.<\/p>\n \u201cWe estimate that the magnitude of disruption, on average, on a per-week basis (approximately $4.8-million) is slightly higher than the Terrebonne freezer outage ($4.4-million; September 12, 2025, until November 10, 2025) so far,\u201d he added.<\/p>\n At the same time, the analyst thinks food inflation is likely to benefit underlying same-store sales growth results.<\/p>\n \u201cIn the core food business (apart from fresh in Quebec), we expect continued benefit from higher year-over-year food store inflation and discount banners attracting more customers (sssg outpacing conventional),\u201d he explained. \u201cSpecifically, Statistics Canada data (until May 2026) suggests food store inflation was 4.0 per cent vs. 4.3 per cent last quarter and 3.1 per cent last year.<\/p>\n \u201cOur review of peer\/management commentary suggests a continuation of prior themes including: (i) Largely consistent consumer behaviour, (ii) Grocer internal inflation that is below Statistics Canada CPI, and (iii) Continued rational competition, while square footage growth accelerates.\u201d<\/p>\n Mr. Shreedhar maintained his \u201csector perform\u201d rating and $105 target for Metro shares. The average is $102.17.<\/p>\n \u201cWe believe MRU is a solid company which has delivered solid long-term returns over various economic cycles. However, our coverage presents investments which offer a better comparative investment proposition,\u201d he said.<\/p>\n In response to a recent pullback in share price, Scotia\u2019s Ben Isaacson upgraded Nutrien Ltd. (NTR-N<\/a>, NTR-T<\/a>) to \u201csector outperform\u201d from \u201csector perform\u201d previously, recommending investors take an \u201coverweight\u201d stance on fertilizer companies.<\/p>\n \u201cThe ferts, as crops, fertilizers, and the equities are all bottoming at the same time,\u201d he said. \u201cFirst, on the macro, we see upside price risk to grain\/oilseeds markets mid-term, largely on reduced planted acreage, yield risk on insufficient N+P [nitrogen-phosphorus] application, severe drought risk this summer, and now a Super El Ni\u00f1o on the way. Consider new crop corn at $4.30\/bu vs. production costs 10 per cent to 15 per cent higher. Second, on the ferts, urea has overshot to the downside, ammonia remains demand-driven, for now, phosphorus margins should recover on costs falling faster than prices (a temporary phosphorus CVD suspension is irrelevant near-term), and potassium remains stable, though could soften a touch into \u201827. Third, most of the equities are down 25 per cent to 30 per cent recently, as investors exited\/shorted on the Iran war unwind + the seasonal withdrawal of NPK demand.<\/p>\n \u201cFinally, and as we see the crops, the ferts, and the stocks all bottoming, we recommend value-seeking contrarians overweight the ferts, especially as over-earnings and Hormuz risks are now joined at the hip<\/p>\n Mr. Isaacson kept an US$80 price target for Nutrien shares. The average is US$81.<\/p>\n He explained: \u201cBull Points:\u00a0(1) it\u2019s unclear to us why NTR has pulled back so meaningfully on both an absolute basis and relative to CF; (2) we see less risk-adjusted global N supply availability than before the Iran war, with a higher probability of over-earnings scenarios – we don\u2019t think this is priced into the stock anymore; (3) the capital allocation story (i.e., narrative + execution) has been very well received by investors – we don\u2019t think this is priced into the stock anymore; (4) crop prices have asymmetric price risk to the upside, while potash remains stable.<\/p>\n \u201cBear Points:\u00a0(1) farmers are clearly challenged, although this hasn\u2019t shaken NTR\u2019s \u201826 Retail guide to date; and (2) there is risk the K market softens as farmers catch-up on P over the coming quarters.\u201d<\/p>\n In other analyst actions: <\/p>\n * BMO\u2019s Rene Cartier initiated coverage of Koryx Copper SA (KRY-X<\/a>), a Vancouver-based developer advancing its 100-per-cent owned Haib Copper Project in Namibia, with an \u201coutperform\u201d rating and $6 price target, exceeding the $5.25 average. <\/p>\n * Canaccord Genuity\u2019s Kenric Tyghe reduced his target for shares of Aurora Cannabis Inc. (ACB-T<\/a>) to $5 from $6.50, which is the average on the Street, with a \u201cbuy\u201d rating. <\/p>\n \u201cAurora remains BUY rated with a new price target … on detailed parsing of recent peer (Canadian and U.S.) commentary and management guidance, which we believe necessitates material negative revisions to our estimates,\u201d said Mr. Tyghe. \u201cWhile we took what we believed was an axe to our F2027 estimates following the Q4\/F26 call, the cuts to our numbers failed to adequately capture the magnitude of the margin pressures through the company\u2019s F2027 reset. The recent peer reports, dovetailing with a heightened probability of U.S. export on recent (and accelerating) regulatory reforms and Aurora\u2019s weak absolute and relative guidance, highlight unexpected sensitivities and weaknesses in Aurora\u2019s positioning. These sensitivities include (1) competitive intensity in Europe that is ramping faster than we previously modelled \u2013 across the peer group we saw improving flower quality, supply-chain optimization, and strong international growth, (2) the increased cost to compete is structural rather than transitional. Peers reporting strong international growth did so while absorbing both gross-margin drag and higher pay-to-play spend for weaker EBITDA margins, and (3) Aurora\u2019s Canadian medical business appears to have limited levers to pull in the short- and medium-term to mitigate the material headwind on the Veteran Affairs Canada (VAC) reimbursement rate cut.\u201d<\/p>\n * Stifel\u2019s Justin Keywood raised his DRI Healthcare Trust (DHT.UN-T<\/a>) target by $1 to $24, exceeding the average of $21.33, with a \u201cbuy\u201d rating, while Canaccord Genuity\u2019s Tania Armstrong-Whitworth moved her target to $23 from $22.25 with a \u201cbuy\u201d rating.<\/p>\n \u201cDRI\u2019s royalty partner Viridian Therapeutics received FDA approval for TED (Thyroid Eye Disease) candidate, veligrotug, trademark Lumvoa with a broad label, including an indication for both chronic and active TED. DRI first royalty tranche includes 7.5 per cent on sales up to US$600-million or US$45-million in EBITDA to DRI (25 per cent of the run-rate today). The approval triggers a US$75-million regulatory milestone payment by DRI to Viridian and could be funded by an expected exercise of a US$180-million put option from Chiesi\u2019s acquisition of KalVista. The FDA approval also further validates DRI\u2019s pre-approval royalty investment strategy and provides greater visibility into forecasts, where DRI deal activity is expected to resume H2\/26,\u201d said Mr. Keywood. <\/p>\n * ATB Cormark\u2019s Nicholas Boycuk raised his Neo Performance Materials Inc. (NEO-T<\/a>) target to $43, exceeding the $41.50 average, from $37.50 with an \u201coutperform\u201d rating.<\/p>\n \u201cNEO continues to walk the path it knows and can deliver upon. We\u2019re highlighting the recent equity financing (ATB Cormark Capital Markets participated in the raise), some industry M&A activity (which appears to be on a different path than NEO), and hafnium pricing that likely impacts near-term quarterly results in this note. While the stock has appreciated since the equity raise, we think there\u2019s more to come,\u201d said Mr. Boychuk.<\/p>\n * Raymond James\u2019 lowered his Newmont Corp. (NEM-N<\/a>, NGT-T<\/a>) target to US$137 from US$139 with an \u201coutperform\u201d rating. The average is US$143.78.<\/p>\n \u201cGiven quarter-end, we have are updating our forecasts for quarter-to-date prices,\u201d he said. \u201cWe expect higher gold production in 2Q but also note costs will be impacted by higher oil prices and a full quarter of higher royalties in Ghana. Furthermore, we expect lower by product credits this quarter, especially from silver where we expect lower realized prices and lower production, although there could be some offset on the copper side from provisional pricing. We also expect there could be a negative mark to market on the realized gold price. Furthermore, FCF for the quarter could be impacted by higher sustaining capex as well as higher cash tax payments. Given all these factors we also expect share buybacks under the capital allocation framework to be lower than 1Q. As a reminder, under the new capital allocation framework CF will be used first to pay sustaining capex, then a $1.1-billion dividend, then development capex, then target a net cash balance of $1.0-billion (+\/- $2.0-billion) and then use the remainder of CF will be used for share repurchases. We have updated our forecasts.\u201d<\/p>\n