Inside the Market’s roundup of some of today’s key analyst actions
While National Bank Financial analyst Matt Kornack raised his recommendation for Allied Properties REIT (AP.UN-T) to “sector perform” from “underperform” in response to its “welcome” distribution reduction, he warns further improvements to its balance sheet remain necessary.
The Toronto-based REIT, which is one of Canada’s largest publicly traded office-building owners, rose 1.6 per cent on Monday following the announcement of a 60-per-cent cut to its monthly payout (6 cents per unit down from 15 cents) as it focuses on debt repayment. The decision is a major reversal for management after telling investors in August they were “very comfortable” with the monthly payout.
“We have been proponents of a distribution cut for some time in order to better position the REIT for a slower office recovery and in light of balance sheet deterioration arising from recent development/acquisition activity,” said Mr. Kornack in a client report. “This provides more time to bridge the gap to condo deliveries, asset sales and the wind-down of the loans receivable program. It is earnings and NAV accretive, although we still expect the next few years to be negatively impacted by the completion of development projects and associated de-capitalization of interest as well as lower returns on repatriated capital from the loans receivable program.
Citing “a credibility gap arising from a reversal in stance on the distribution,” Mr. Kornack made his rating revision seeing the cut as “a move in the right direction.”
“Asset sales are still likely necessary in order to better position the balance sheet,” he added.
The analyst trimmed his target for Allied units by $1 to $13 to “reflect a larger discount related to an erosion in perceived management credibility resulting from capital allocation decisions and a reversal on distribution sustainability messaging.” The average target on the Street is $15.75, according to LSEG data.
Elsewhere, Raymond James analyst Brad Sturges raised Allied to “market perform” from “underperform” with a $14 target, down from $14.75.
“We expect a near-term churn in the REIT’s unitholder base, while we also believe that Allied’s near-term investment risks still include: 1) a slower-than-expected recovery in the REIT’s average occupancy rate; and 2) possible impairment of Westbank-related loan receivables. That said, we believe Allied could benefit over the next 2+ years from: 1) gradually improving Canadian office real estate fundamentals; 2) a reduction in financial leverage metrics to targeted levels,” said Mr. Sturges.
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National Bank Financial’s Cameron Doerksen says “strong end market momentum” is keeping him positive on the investing proposition for Bombardier Inc. (BBD.B-T) despite an “exceptional 2025″ with its shares having risen 127 per cent year-to-date versus a 26-per-cent gain for the S&P/TSX.
While he acknowledges the valuation for the Montreal-based plane manufacturer is currently “not as compelling as earlier in the year,” the analyst still sees potential upside for the stock.
In justifying his bullish view, Mr. Doerksen pointed to a pair of potential catalysts: the business jet market remaining “constructive” and its Defense segment momentum continuing.
“Business jet end market conditions remain positive with growth in flight activity (up 8 per cent year-over-year over past four weeks according to WingX) and used jet inventories for sale still low at 7.6 per cent according to Global Jet Capital (below 10 per cent generally seen as a healthy market),” he explained. “Boosted by a change in U.S. bonus depreciation rules, new business jet orders are also solid (Bombardier book-to-bill at 1.3 times in Q3 bringing backlog to $16.6-billion), which gives us greater confidence that Bombardier can sustain aircraft deliveries at 150+ (or potentially modestly higher) over a multi-year period and also deliver on higher-margin aftermarket growth. Bombardier’s margins should also benefit as supply chain related cost headwinds ease further in 2026 and as a larger proportion of incremental revenue growth for the company will come from its higher margin Services and Defense segments.
“Bombardier is already enjoying strong momentum in its Defense segment, but we expect further growth ahead supported by defence spending increases globally. Indeed, the number of potential defense campaigns for platforms using a Bombardier business jet has moved materially higher in recent months, with the Saab GlobalEye platform notably gaining market traction. In the table below, we list recent and potential new orders/interest for Bombardier business jet defence platforms that have been cited by governments. In Canada, the government is contemplating acquiring the Saab Gripen fighter jet. If this were to move forward, it is widely expected that Bombardier would be involved in the program, which could lead to new capabilities in fighter jet manufacturing and/or long-term support. As new contract campaigns are converted into firm orders, we expect the defence thematic to be an ongoing tailwind for the stock.”
Mr. Doerksen also expects the company’s free cash to grow, leading him “see the potential for capital to be deployed towards NCIB and potentially for tuck-in M&A to bolster the company’s position in the aftermarket or defence sectors.”
Believing Bombardier’s valuation remains “reasonable,” he hiked his target for its shares to a Street-high of $263 from $234, keeping an “outperform” recommendation, after incorporating his 2027 projections into his model. The average on the Street is $226.
“On our updated 2026 forecast, the stock trades at 12.2 times EV/EBITDA, which is above the FY1 average of 10.2 times (since the sale of the Transportation business in early 2021) but close to in line with the aerospace OEM peer group that trades at 12.1 times 2026 on average and a discount to the broader aerospace & defence peer group, which trades at 13.0 times 2026,” he said.
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TD Cowen analyst Wayne Lam sees Equinox Gold Corp. (EQX-T) as “increasingly becoming a core holding for investors given robust production profile in Canada.”
In a client report released Tuesday, he reaffirmed the Vancouver-based company as one of his “Best Ideas for 2026,” citing “operational momentum via ongoing ramp ups at Greenstone/Valentine and near-term catalysts via accelerated deleveraging and potential divestment of the Brazil portfolio.”
“Our Buy rating on EQX is based on significant re-rating potential centred around the ramp up of two cornerstone Canadian assets at Greenstone and Valentine,” said Mr. Lam. “We anticipate robust FCF being generated with near term catalysts including accelerated deleveraging and a potential sale of the Brazil portfolio.
“We view EQX as a go-to name for investors given increasing production profile and weighting in Canada, further supported by advancement of the Castle Mountain Phase 2 project in California via the US FAST-41 process.”
Mr. Lam pointed to a trio of potential catalysts that could push the company’s shares higher in the year ahead: “(1) accelerated balance sheet deleveraging, (2) potential sale of the Brazilian assets, and (3) continued ramp up of Greenstone/Valentine and advancement of permitting at Castle Mountain.”
Maintaining his “buy” rating for Equinox shares, Mr. Lam raised his target to $22 from $20. The average target is $19.93.
“We estimate EQX shares trading at a 15-per-cent discount on spot NAV vs Intermediate peers, which in our view is unwarranted and based on investor caution around execution on the ramp ups at the two flagship Canadian assets,” he added. “Despite our modeled conservatism on the pace of ramp ups at Greenstone (TD Cowen estimated 285 Koz in 2026) and Valentine (170 Koz), we estimate robust spot FCF of $1.5-billion over the coming year. In our view, stronger metals prices have provided a significantly greater buffer and added flexibility to support the accelerated deleveraging strategy, which we anticipate could lead to a substantial re-rating as de-risking milestones are achieved and the two mines advance towards design capacity.”
Elsewhere, Stifel’s Ingrid Rico initiated coverage of Equinox Gold with a “buy” rating and $24 target price.
“We believe Equinox Gold is poised for further valuation re-rate as operational excellence comes to the forefront and the company realizes the full-value potential of a boosted Canadian portfolio, which we see as the anchor of not only production growth but also increasing cash flow generation,” she said. “Two new mines in Canada position EQX for cash flow duration and strong standing to becoming a top 3 Canadian gold producer. We believe the new phase EQX is entering has a road map for valuation multiple expansion from building a track-record of operating performance and growing cash flow generation to balance sheet de-leveraging that will better position the company to enhance shareholders’ returns (i.e., potentially introducing a dividend policy) as it turns to net-cash. Overall, we see ‘new Equinox’ having the building blocks for further re-rate beyond recent share appreciation.”
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While investor fears about the impact of artificial intelligence continue to weigh on engineering stocks, Desjardins Securities analyst Benoit Poirier came away from a meeting with WSP Global Inc.’s (WSP-T) digital team believing the Montreal-based firm sees AI as “an opportunity, not a risk.”
“WSP is positioned to benefit from AI (not be disrupted) as industry dynamics favour large and trusted players,” he said. “This is not the first technological revolution for WSP and its peers. When AutoCAD first hit the market, it transformed the AEC industry but did not disrupt large firms, which adopted early and gained an edge over smaller competitors. Engineering firms depend on domain expertise, reputation, liability ownership and global reach, making commoditization unlikely and creating consolidation opportunities as smaller firms struggle to keep pace with tech investment. Ultimately, we see AI as another efficiency tool for engineers, similar to past advancements.
“Organic growth poised to accelerate along with margins. At our recent fireside chat with President & CEO Alexandre L’Heureux, we gained greater confidence on why organic growth is poised to reaccelerate in 2026 and about WSP’s ability to achieve a 19–20-per-cent adjusted EBITDA margin by 2027, with a line of sight to 22 per cent plus in the long term, which could drive a value of $410/share.”
In a report released Tuesday before the bell, Mr. Poirier emphasized shares of WSP are now down 16 per cent from their 52-week high, which he sees as a “buying opportunity,” emphasizing “we believe it is well-positioned to benefit from the AI/digital revolution and numerous consolidation opportunities.”
“Organic growth poised to accelerate along with margins.,” he said. “At our recent fireside chat with President & CEO Alexandre L’Heureux, we gained greater confidence on why organic growth is poised to reaccelerate in 2026 and about WSP’s ability to achieve a 19–20-per-cent adjusted EBITDA margin by 2027, with a line of sight to 22-per-cent-plus in the long term, which could drive a value of $410/share.”
Also seeing concerns about its M&A strategy as “overstated,” Mr. Poirier reaffirmed his “buy” rating and $306 target. The average is $322.60.
“With an attractive valuation (trading at 12.8 times EV/FY2 EBITDA, below its five-year average of 13.2 times and a 1.1-times discount to its main peer STN [Stantec Inc.]), we believe this represents a buying opportunity,” he said.
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ATB Capital Markets analyst Tim Monachello sees a “robust and diverse” growth outlook for CES Energy Solutions Corp. (CEU-T) following a recent meeting with president and chief executive Ken Zinger.
“The conversation highlighted the significance of the growth opportunities CEU is tracking for 2026 and beyond,” he said. “Most notably, we believe CEU’s recent success in the offshore Gulf of Mexico production chemicals market has provided entry to previously unavailable opportunities in both the Gulf and in high-margin onshore production chemicals applications in the Canadian heavy/thermal oil market and scale opportunities in the U.S. onshore production chemicals market, including a recent RFP win (announced with Q3/25 results) that management expected to contribute up to roughly 10-per-cent year-over-year EBITDA growth in 2026.
“In addition, CEU highlighted significant market share gains in U.S. gas basins in 2025 where drilling fluids revenue intensity is meaningfully higher than in oil basins, with visibility to additional gains through year-end and into 2026. Overall, management believes it is facing among the most optimistic growth outlooks in company history.”
Following the update, which also included the company’s chief financial officer Anthony Aulicino, Mr. Heywood raised his adjusted EBITDA estimate for 2026 by 2 per cent to $440-million and for 2027 by 3 per cent to $459-million.
Citing those changes as well as “a view to a steepening longer-term growth trajectory, and visibility to improved FCF conversion in 2026,” he increased his price target for the Calgary-based company’s shares to $14 from $12. The average is
“We maintain our Outperform rating, and continue to believe CEU is well-positioned for meaningful growth over the coming years as it penetrates new markets and expands,” e concluded.
“While somewhat aspirational in nature, CEU has a long-term target to reach 40-per-cent market share in all the major markets it operates; CEU believes a 40-per-cent market share is where it faces saturation and market resistance, as it has seen in the Canadian drilling fluids market. That said, CEU noted that it believes it has a 52-per-cent market share of the technical drilling fluids work in Canada. In addition, CEU believes it currently has a roughly 30-per-cent-35-per-cent market share of the Canadian production chemicals market, a roughly 21-per-cent market share in US onshore production chemicals, and roughly a 26-per-cent market share in the US onshore drilling fluids market including 30-per-cent-35-per-cent in the Permian, and roughly 30-per-cent of the combined Appalachia and Haynesville markets.”
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In other analyst actions:
* Raymond James’ Judith Elliott raised her Ero Copper Corp. (ERO-T) target to $40, which is a high on the Street, from $33, keeping an “outperform” rating. The average is $33.91.
“We attended investor meetings with ERO management recently and came away with the view that the company is well positioned to deliver a strong 4Q operating quarter, meet its 2025 guidance and deliver 2026/2025 production growth at all three of its operations,” she said.
“We have updated our model following 3Q25 reporting and with updates from the Xavantina gold concentrate sale, driving an increase to our target price. While we continue to expect ERO to be a ‘show me’ story in the near term with investors looking for full ramp up of Tucuma and normalization of Caraiba and Xavantina, we believe the current valuation represents good value and maintain an Outperform rating.”
* UBS’ Daniel Major raised his Franco-Nevada Corp. (FNV-N, FNV-T) target to US$270 from US$260, exceeding the US$235.24 average on the Street, with a “buy” rating.
* In response to the close of its acquisition of HanesBrands Inc., CIBC World Markets’ Mark Petrie moved his target for Gildan Activewear Inc. (GIL-N, GIL-T) to US$71, exceeding the US$70.05 average, from US$60, reiterating an “outperform” rating.
“Gildan acquisition of Hanesbrands combines leading retail brands and best-in-class low-cost manufacturing, as well as complimentary channels and categories,” said Mr. Petrie. “We are confident in management’s ability to meet and likely exceed its $200-million synergy target and believe Gildan can solidify positive organic growth trends. Our model is updated and reflects 25.7-per-cent EPS growth in F2026, with leverage falling to support share repurchases re-starting in mid-2027 at the latest.”
* Ahead of the release of its third-quarter results on Dec. 9, Mr. Petrie raised his Groupe Dynamite Inc. (GRGD-T) target to $79 from $65, keeping an “outperformer” rating. The average is $70.13.
“Alt data show increasing sales momentum in the U.S. as brand awareness grows, and we expect margin leverage and efficiencies to drive earnings growth,” he said.
“Groupe Dynamite is currently trading at 36 times NTM [next 12-month] P/E on consensus estimates and the stock is up 286 per cent year-to-date. We have taken our target multiple up to 35 times (was 30 times) on account of our increased confidence in U.S. growth, supported by the strength in the Alt data and the expectation of improved margin leverage. Improving store economics should support continued growth, with International expansion expected to kick-off in the coming months.”
