Inside the Market’s roundup of some of today’s key analyst actions

National Bank Financial analyst Giuliano Thornhill is currently projecting only “modest” returns for Choice Properties REIT (CHP.UN-T), leading him to lower his recommendation for its units to “sector perform” from “outperform” previously.

“CHP units have remained near current levels as investors seek out stability,“ he said. ”We have lowered our NAV [net asset value] to reflect declining multi-family density values related to condo market uncertainty. Our revised target equates an implied cap rate (6.14 per cent) slightly ahead of CHP’s IPP FV cap rate (6.05 per cent). We therefore anticipate limited unit price appreciation as we see the value of its tenant quality and low leverage mostly reflected at current levels. We prefer CRR as it offers a balanced investment profile plus attractive valuation, and Seniors-related investments such as CSH and EXE.”

In a client note, Mr. Thornhill acknowledged further macroeconomic uncertainty could prove to be “a risk” to his call on Toronto-based Choice, which is currently the largest real estate investment trust in Canada.

“Investors gravitate towards CHP units during times of uncertainty,” he said. “As Canada’s economy softens, steadily rising unemployment and its effects on business investment may result in broader contagion across real estate industries. This could keep CHP units in play as investor seek out a conservative allocation within their portfolio, and it may outperform from its downside protection.”

However, he also pointed to its “conservative” strategy and a lack of catalysts in justifying his downgrade.

“CHP, by design, is conservatively run,” said Mr. Thornhill. “Over the last year, it has substantially grown thanks to L’s wind-down of its real estate portfolio, which included investments in traditional retail frontage and industrial warehousing. Therefore, near-term we expect additional capital may be earmarked for development projects than previously. In addition, renewal lifts on L’s retail leases are now near their maximum 10-per-cent lift. Combined we see fewer catalysts on the horizon given its employed strategy.”

The analyst trimmed his target for Choice units to $15.50 from $16. The average target on the Street is $15.84, according to LSEG data.

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RBC’s Head of Global Energy Research Greg Pardy thinks Imperial Oil Ltd. (IMO-T) “appears to have arrived from a relative valuation standpoint—but its balance sheet strength, advantaged capital intensity/low WTI break-even and commitment to returning cash to shareholders would point towards simultaneous offence-defence for energy investors.”

In a research report release Thursday, he said a recent series of institutional meetings in Montreal with the company’s Investor Relations team focused on its “upstream asset optimization journey along with its shareholder returns framework.”

“The common thread amongst all the meetings we attended revolved around the relationship between Imperial’s 5-per-cent NCIB, share price/relative valuation and alternative uses of cash, including potential acquisitions,” said Mr. Pardy.

“Imperial has become the gold standard when it comes to shareholder returns in recent years. Since the end of 2020 until June 30, 2025, IMO’s common share count fell approximately 31 per cent (in part supported by $5.5-billion of repurchases across three substantial issuer bids) while its dividend more than tripled to $2.88 per share (2.2-per-cent yield). Imperial’s float shares outstanding (net of Exxon’s 69.6-per-cent interest) compressed by 31 per cent (US68.4-million) to 154.7 million shares during the same timeframe, while its share price climbed circa 348 per cent.”

Mr. Pardy did acknowledge investor concern about an elevated valuation for Imperial, given its “juggernaut share price performance (up 47 per cent in 2025 year-to-date)”

“We wouldn’t argue with that observation per se, but it warrants closer inspection from a few angles,” he explained. “Imperial’s 2025 debt-adjusted (enterprise value/unlevered cash flow) cash flow multiple (under futures) of 9.3 times would compare with our U.S./Canada peer group average of 7.5 times — and is in the glide path of Exxon Mobil (10.1 times) and Chevron (9.6 times). IMO’s 2025 free cash flow yield under futures (before dividends relative to enterprise value) of 7 per cent modestly exceeds our U.S./ Canada peer group average of 6 per cent (and Exxon Mobil at 4 per cent).”

Maintaining his “sector perform” recommendation for Imperial, he raised his one-year price target by $7 (or 6 per cent) to $115 per share. The average on the Street is $106.87.

“We could see ourselves becoming more bullish towards the stock amid a relative pullback,” said Mr. Pardy.

“In our opinion, Imperial should command a premium relative valuation given its long life-low decline upstream portfolio, cash flow diversification via its refining and chemical segments, strong balance sheet, free cash flow generation, abundant shareholder returns and impressive operating performance.”

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The operational update from Paramount Resources Inc. (POU-T) highlighted ”the value momentum being generated within the business, significantly pulling forward option value across multiple fronts (most notably, crystallizing $300-million of its NVA stake),” according to National Bank Financial analyst Dan Payne.

On Monday, the Calgary-based company also announced it has sold 18.5 million common shares of NuVista Energy Ltd. (NVA-T) at through a private agreement for aggregate cash consideration of$296-milion. Paramount now owns a 6.55-per-cent stake in the company.

“That incremental funding comes in support of a program that continues to advance multiple high-impact and outperforming projects, with it noting that volumes through the summer tracked ahead of already increased guidance (up 10 per cent vs. guided Q3/25) to reflect 5-10-per-cent quarter-over-quarter growth, the product of which is being generated through the efficiency and impact of execution at its Willesden Green Duvernay project that is trending 25 per cent higher quarter-over-quarter,” said Mr. Payne

“The strength of its operating aptitudes in executing major projects is on display, with its Alhambra facility in the Duvernay coming on-stream early to support the low-capital efficiency addition of volumes, with the plant operating near capacity (vs. heavily risked expectations) from nine initial wells brought on-stream, and an incremental seven wells to come on-stream through year-end to bring Phase 1 to full design capacity (expect that optimized trajectory to similarly translate through its Phase 2 & 4 developments in 2026 & 2028). Thereafter, we look to its Sinclair opportunity as the next relevant increment to come.”

The analyst thinks the company is now “establishing a funded view towards large increments of value ($36 per share long-term sum-of-the-parts).”

“POU remains one of the most uniquely positioned vehicles in the group, focused on high-impact growth across a large and diversified asset portfolio to support long-term returns, and as such, we have increased our target valuation multiple (7 times vs. 6 times) and associated target price ($27.50 from $25) to better reflect the significance of that embedded opportunity,” he added.

Mr. Payne kept his “sector perform” recommendation with his new $27.50 target. The average is $25.44.

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RBC Dominion Securities analyst Keith Mackey thinks Enerflex Ltd. (EFX-T) “remains in strong position to capitalize on natural gas demand growth and has an improving FCF profile which should drive an inflection in shareholder returns.”

“Enerflex stands out as the only stock in our coverage group with positive Street earnings revisions for 2025 and 2026,” he said in a client note. “We expect EBITDA growth of 12 per cent in 2025, and our 3Q25 EBITDA estimate is 9 per cent ahead of the street on strong Engineered Systems backlog conversion and steady growth in Energy Infrastructure and Service. Beyond 2025, we see moderate growth supported by low-to-mid-single-digits growth in Energy Infrastructure and Service, with Engineered Systems supported by its $1.2-billion backlog.

“Improving free cash flow driven by margin expansion. For 2025 and 2026, we estimate FCF at $98-million and $116-million, respectively. We expect the improvement in free cash flow to be driven by margin expansion alongside stable capital investment. At our numbers, EBITDA margins should increase by about 400bps from 2023 to 2026, reaching 20 per cent.”

Mr. Mackey now expects the Calgary-based company to allocate “meaningful FCF to shareholders, versus a minimal amount over the past three years.”

“We think a dividend increase will be welcomed alongside 3Q25 results, but also see buybacks as being the best use of the majority of shareholder return capital, given the valuation disconnect,” he added. “Enerflex instituted an NCIB earlier this year.

“Enerflex shares also remain attractively valued, and we believe continued operational performance and judicious capital allocation should close the gap to peers.”

Maintaining his “outperform” rating and reaffirming Enerflex’s spot on RBC’s “Global Energy Best Ideas” list, Mr. Mackey raised his target to $15 from $13.

“We have increased our multiple to reflect continued operational improvement as we believe Enerflex has made progress on the items required for re-rating. Contract compression peer trading multiples provide a valuation marker and continued operational execution and judicious capital allocation are key to closing the gap in our view,” he explained.

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TD Cowen‘s David Kwan thinks the recent sell-off in shares of Constellation Software Inc. (CSU-T) due to investor worries about the impact of artificial intelligence on its business is “overdone” and named the Toronto-based company one of his “top picks.”

On Wednesday, Constellation’s Volaris Group hosted a “Redefining VMS in the AI Era” webinar, which the analyst said reinforced his “our view that CSU remains focused on the opportunities and threats.” That followed a Monday question-and-answer session with founder and president Mark Leonard that was meant to address AI concerns..

“Like the transition from on-premise to the cloud, we believe CSU is (relatively) well positioned to address/mitigate another potential threat to its business and continue delivering strong returns for shareholders,” said Mr. Kwan.

“Similar to CSU’s AI call on Monday, the panelists discussed the opportunities/threats of AI. On the former, AI can significantly boost productivity, particularly in programming, deal creation and data analysis. However, it can lead/has led to increasing competition, with it now seeing more startups entering some vertical markets. The panelists believe that given Volaris’ strong customer relationships and understanding of its vertical markets, proprietary data about its customers, and deep knowledge of customers’ processes and workflows, the OG remains in a solid competitive position. We have a similar view and also believe it should benefit from its incumbency position and the CSU/OG network effect.”

He now sees Constellation’s “rare” share price underperformance presenting “a compelling buying opportunity” for investors.

“CSU’s stock has declined more than 5 per cent since its AI call on Monday, which follows a period of significant underperformance since the Q1 release in mid-May that was initially driven by the disappointing Q1 results (including much lower-than-expected M&A spend) and then followed by the return of the AI winners/losers theme that has seen CSU and many other application software companies underperform over the last few months,” he said. “The 20-per-cent decline from its pre-Q1 peak (and all-time high) is something that we have rarely seen. The last time was in 2022, when the stock dropped 20 per centover a 6-9 month period to under C$2,000. We note that a little over three years later, even with the recent underperformance, buyers on that dip would have more than doubled their money.

“The significant pullback in the stock after the call is surprising in our view, given the weakness in the weeks and months leading up to the call as well as our belief that there really was not anything notable that was disclosed on the call that would help significantly drive investor views either way. Given its current share price trajectory, the stock is on track to underperform the broader market for only the second time since its IPO in 2006 (2016 was the only time it underperformed the S&P 500). Year-to-date, the stock is down 7 per cent vs. the S&P 500 which is up 13 per cent. As well, unless its share price materially increases, 2025 will be the second time the stock has posted an annual decline (2022 being the other year when it fell 9 per cent, still beating the S&P 500’s decline of 19 per cent).”

Mr. Kwan reaffirmed his “buy” rating and $5,700 target for Constellation shares. The average is $5,582.50.

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In other analyst actions:

* TD Cowen’s David Deckelbaum downgraded Lithium Americas Corp. (LAC-N, LAC-T) to “hold” from “buy” with a US$5 target. The average on the Street is US$4.88.

* Desjardins Securities’ Gary Ho increased his AGF Management Ltd. (AGF.B-T) target to $17.75 from $16.50 with a “buy” rating. The average is $16.55.

“3Q results beat our expectations, with notably strong retail net inflows which have carried into 4Q thus far. SMA/ETF AUM growth is continuing at a healthy clip. With success at New Holland Capital, we believe future investment is likely leading AGF to consolidate its AUM and financial results. Valuation remains compelling to us, especially in light of AGF’s inflows, healthy balance sheet and recent M&A transactions in the space,” said Mr. Ho.

* Canaccord Genuity’s Matthew Lee cut his Air Canada (AC-T) target to $25, below the $25.31 average, from $28, keeping a “buy” rating.

* CIBC’s Cosmos Chiu raised his Wheaton Precious Metals Corp. (WPM-N, WPM-T) target to US$135 from US$130 with an “outperformer” rating. The average is US$120.18.