Inside the Market\u2019s roundup of some of today\u2019s key analyst actions<\/p>\n
Following its Investor Day event in New York on Thursday, TD Cowen analyst Cherilyn Radbourne called Brookfield Asset Management Ltd. (BAM-N<\/a>, BAM-T<\/a>) a \u201cpremier real asset manager\u201d and emphasized its \u201cresilient\/diversified earnings growth.\u201d<\/p>\n \u201cBAM has the premier real asset franchise, which positions it in the largest and fastest growing areas within alternatives,\u201d she said. \u201cInstitutional allocations to alternatives are still growing, and alternatives are in the very early innings of a migration into the wealth, insurance, and 401(k) markets. BAM has a simple-to-understand balance sheet, with no insurance liabilities, and offers a healthy dividend yield.\u201d<\/p>\n Ms. Radbourne thinks Brookfield\u2019s guidance of a 18-per-cent five-year distributable earnings compound annual growth rate appears \u201cachievable and in line with investor expectations.<\/p>\n \u201cFlagship funds remain core (mid-single-digits CAGR), while complementary strategies grow at an low-double-digits CAGR and BN\u2019s insurance float compounds at 20 per cent,\u201d she added. <\/p>\n \u201cBAM\u2019s earnings are resilient and diversified. None of its pillars (infrastructure, energy, private equity, real estate, and credit) represent more than 1\/3 of total fee revenue. The company\u2019s product line-up spans the capital stack and the risk-return spectrum across the 5 pillars. Notably, energy and infrastructure have recently spun off two strategies that are meaningful in their own right: energy transition ($15-$20-billiom flagship fund) and AI infrastructure ($10-billion flagship fund).\u201d<\/p>\n In a client note released Friday, Ms. Radbourne also emphasized Brookfield\u2019s \u201cwalks before it runs, which is visible in private wealth.\u201d <\/p>\n \u201cBAM has approximately $15-billion in private wealth, a low-single-digits percentage of total FBC, which it projects will grow by 5 times to $75-billion in 2031,\u201d she noted. \u201cIn the context of considerable investor focus on redemptions from private wealth focused private credit vehicles, the Oaktree Strategic Credit Fund has outperformed: redemption requests were 8.5 per cent in Q1\/26, at the low-end of the peer group range, then declined to 4.5 per cent in Q2\/26 and 3.8 per cent in Q3\/26, below the industry standard limit of 5 per cent; therefore, they have been funded in full for two consecutive quarters. <\/p>\n \u201cCarry could show up in 2026 (much earlier than expected) but is on the way in 2030+. The legacy carry stayed at BN when BAM was spun off, but BAM has a 1\/3 share in net carry on funds raised post-spin (1\/3 to BAM, 1\/3 to employees and 1\/3 to BN). BAM projects $9-billion of gross carry over the next five years, which translates to ~$2bln or $1.20\/share net to BAM. (65 per cent assumed margin).\u201d<\/p>\n Ms. Radbourne reaffirmed her \u201cbuy\u201d rating and US$70 target for Brookfield\u2019s U.S.-listed shares. The average target on the Street is US$58.65.<\/p>\n \u201cHigher interest rate expectations have weighed on the stock recently, but we think a bigger TAM overrides higher rates,\u201d she said. \u201cInstitutional allocations to alternatives are still growing and the industry is just starting to tap private wealth, with the 401(k) opportunity still to come. Real assets are very well suited to long-term retirement liabilities, offering capital preservation, inflation protection, yield, and value appreciation.\u201d<\/p>\n Elsewhere, RBC\u2019s Bart Dziarski kept an \u201coutperform\u201d rating and US$65 target.<\/p>\n \u201cBAM\u2019s Investor Day laid out details on how the company expects to double fee-bearing capital in 5 years, driving high-teens DE growth. Themes highlighted by BAM included increasing diversification, performance consistency and future growth drivers. Overall, we have a neutral view as earnings growth targets were largely maintained and rolled forward one year. We believe the successful execution of BAM\u2019s growth plan should drive an attractive 21-per-cent IRR to shareholders over time,\u201d said Mr. Dziarski.<\/p>\n RBC Dominion Securities analyst Andrew Wong thinks Nutrien Ltd. (NTR-N<\/a>, NTR-T<\/a>) \u201ccontinues to execute well across the business with a strong focus on operational excellence and capital discipline.\u201d <\/p>\n \u201cWe see constructive ag and fertilizer fundamentals with stronger crop prices, steady potash fundamentals, and elevated nitrogen prices which should drive EBITDA growth in 2027,\u201d added Mr. Wong.<\/p>\n \u201cAs such, we expect upward revisions to consensus estimates that currently call for lower EBITDA into 2027. Long-term, we see potential for further improvements in costs and cash conversion, with operations supporting strong cash generation across any market cycle and consistent capital return to shareholders via buybacks and steadily rising dividends per share.\u201d<\/p>\n In a client report following investor meetings with CFO Mark Thompson and Director of IR Muhammad Usman on Thursday, Mr. Wong said the current agricultural environment appears \u201cconstructive on stronger crop prices,\u201d and he emphasized the Saskatoon-based company, which is the world\u2019s largest producer of potash, has an \u201cextreme focus on operational execution, cash generation, and capital discipline.\u201d<\/p>\n \u201cManagement noted ag market conditions have strengthened, with higher corn prices due to lower yields in the U.S. pushing stocks-to-use ratios potentially below 10 per cent, higher wheat prices due to re-escalating conflict between Russia\/Ukraine in the Black Sea, and potential weather volatility from El Nino,\u201d he added. \u201cStronger crop prices have improved farmer economics back to near average levels and have supported better fertilizer affordability, which should be supportive for fertilizer demand through H2\/26 and provides a good set-up into H1\/27.\u201d<\/p>\n \u201cWe think management did well emphasizing Nutrien\u2019s strong focus on operations and \u2018controlling the controllables\u2019. While the company has already made significant progress on cost and capital efficiencies, management sees potential for further efficiencies to drive higher margins and cash conversion. Nutrien will continue to focus growth spending on moderate brownfield or debottleneck projects with low capital requirements and high return on investment. Management is comfortable with annual capex at $2-billion as sufficient to fund moderate growth and maintenance capex of $1.6-1.7-billion. On capital return, Nutrien remains focused on regular, ratable share buybacks, with intentions to scale counter-cyclically – i.e. the percentage of cash generation allocated to buybacks likely declines as FCF rises in an up-cycle (although the absolute dollar amount could rise) and vice versa in a down-cycle.\u201d<\/p>\n Also noting Nutrien \u201ccontinues to evaluate all options in a strategic review of non-core assets,\u201d the analyst reiterated his \u201coutperform\u201d rating and US$85 target for Nutrien shares. The average on the Street is US$81.15.<\/p>\n \u201cWe believe the company has built the most diverse, vertically integrated agricultural input business with an attractive earnings profile, growing free cash flows, and solid balance sheet,\u201d he said.<\/p>\n Seeing Royal Gold Inc. (RGLD-Q<\/a>) \u201cpositioned to outperform as the company benefits from strong 2027 production growth and a return to the deal market in H2\/26,\u201d TD Cowen analyst Derick Ma placed it to the firm\u2019s \u201cCanada Best Ideas\u201d list, calling it \u201can ascendant royalty portfolio.\u201d<\/p>\n \u201cOther key upcoming catalysts include improving grades at Kansanshi starting in H2\/26, exploration and development updates at Fourmile, and a construction decision on Great Bear in 2027\/28,\u201d said Mr. Ma. <\/p>\n The Denver-based precious metal streaming management company acquired Canadian peer Sandstorm Gold for about $3.5-billion last year and possesses a diverse portfolio across North America as well as the rest of the world.<\/p>\n \u201cRGLD offers a robust asset portfolio at a compelling valuation, in our view,\u201c the analyst added. \u201dThe company\u2019s top 5 assets are operated by high-quality management teams (Centerra, First Quantum, Teck, and Barrick) with long mine lives (weighted average of 21 years) in good jurisdictions. RGLD is estimated to deliver the best production growth outlook in 2027 at 6.1 per cent, driven by higher deliveries from Kansanshi, Platreef, Robertson, and Pueblo Viejo. <\/p>\n \u201cWe believe the valuation gap to Wheaton Precious Metals and Franco-Nevada should narrow to approximately 2-3 times on EV\/ EBITDA, as the market recognizes management\u2019s deal track record and the quality of the assembled asset portfolio. RGLD is currently trading at an EV\/2027E EBITDA of 12.5 times, which is a relative valuation discount to its larger peers WPM and FNV of 7.5 times.\u201d<\/p>\n Seeing it trading \u201csubstantial discount to its larger peers on both P\/NAV and EV\/EBITDA, which we believe provides an attractive entry point for a high-quality streaming\/royalty business,\u201d Mr. Ma raised his target to US$315 from US$289, maintaining his \u201cbuy\u201d rating. The average is US$302.67.<\/p>\n \u201cWe believe the market underappreciates management\u2019s track record of accretive transactions and the quality of the underlying portfolio,\u201d he concluded. \u201cThe team has demonstrated a keen ability to source and finance accretive deals over the past 5 years. Highlights include: Cortez (2022 deal, back-calculated pre-tax IRR of 12 per cent), Xavantina (2021 deal, back-calculated pre-tax IRR of 26 per cent), and Khoemacau (2019 deal, back-calculated pre-tax IRR of 22 per cent). <\/p>\n \u201cWe forecast the asset portfolio will deliver the best 2027 growth outlook among the big 3 royalty companies at 6.1 per cent (vs. relatively flat 2027 GEOs at both FNV and WPM), with a competitive 2030 growth outlook at 17.6 per cent (vs. FNV at 18.5 per cent and WPM at 24.9 per cent). The business also benefits from one of the most diversified portfolios in the sector with five core assets serving as cash flowing pillars rather than relying on one or more cornerstone assets for stability. RGLD\u2019s largest asset Mt. Milligan accounts for 15 per cent of our total asset NAV.\u201d<\/p>\n In other analyst actions: <\/p>\n * In response to the Fed\u2019s hawkish turn<\/a> earlier this week, BMO\u2019s Tamy Chen downgraded Magna International Inc. (MGA-N<\/a>, MG-T<\/a>) to \u201cmarket perform\u201d from \u201coutperform\u201d previously, emphasizing auto parts stocks have historically not performed well during such periods. Her target for its shares slid to US$70 from US$76, which continues to exceed the US$64.82 average. <\/p>\n * Ms. Chen also downgraded Guelph, Ont.-based Linamar Corp. (LNR-T<\/a>) to \u201cmarket perform\u201d from \u201coutperform\u201d with a price target of $105, down from $120 and below the $116.17 average on the Street.<\/p>\n \u201cPreviously, we felt the continued margin improvement narrative would still drive some further share price appreciation. But then trade tensions returned, and we moved MGA and LNR to the bottom of our pecking order,\u201d she said.<\/p>\n \u201cNow the Fed has turned hawkish and risk skews to the downside on production volume forecasts.\u201d<\/p>\n * Seeing same-store sales growth obstacles fading and touting its the impact of cost takeouts, Mizuho\u2019s David Bellinger initiated coverage of Boyd Group Services Inc. (BGSI-N<\/a>, BYD-T<\/a>) with an \u201coutperform\u201d rating and $120 price target. The average is US$157.<\/p>\n * Seeing it as undervalued, JPMorgan\u2019s Lucas Ferreira initiated coverage of Toronto-based Sigma Lithium Corp. (SGML-X<\/a>) with an \u201coverweight\u201d rating and $20 target. The average is $27.82. <\/p>\n * Seeing recent underperformance creating an attractive entry point, UBS\u2019 Jon Windham upgraded Waste Connections Inc. (WCN-N<\/a>, WCN-T<\/a>) to \u201cbuy\u201d from \u201cneutral\u201d with a US$200 target, rising from US$186 and in line with the average of US$200.06.<\/p>\n","protected":false},"excerpt":{"rendered":"Inside the Market\u2019s roundup of some of today\u2019s key analyst actions Following its Investor Day event in New…\n","protected":false},"author":2,"featured_media":900573,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-900572","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/900572","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=900572"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/900572\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/900573"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=900572"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=900572"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=900572"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}