Inside the Market\u2019s roundup of some of today\u2019s key analyst actions<\/p>\n
National Bank Financial analyst Giuliano Thornhill is currently projecting only \u201cmodest\u201d returns for Choice Properties REIT <\/b>(CHP.UN-T<\/a>), leading him to lower his recommendation for its units to \u201csector perform\u201d from \u201coutperform\u201d previously.<\/p>\n \u201cCHP units have remained near current levels as investors seek out stability,\u201c he said. \u201dWe 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\u2019s 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.\u201d<\/p>\n In a client note, Mr. Thornhill acknowledged further macroeconomic uncertainty could prove to be \u201ca risk\u201d to his call on Toronto-based Choice, which is currently the largest real estate investment trust in Canada. <\/p>\n \u201cInvestors gravitate towards CHP units during times of uncertainty,\u201d he said. \u201cAs Canada\u2019s 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.\u201d<\/p>\n However, he also pointed to its \u201cconservative\u201d strategy and a lack of catalysts in justifying his downgrade. <\/p>\n \u201cCHP, by design, is conservatively run,\u201d said Mr. Thornhill. \u201cOver the last year, it has substantially grown thanks to L\u2019s 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\u2019s retail leases are now near their maximum 10-per-cent lift. Combined we see fewer catalysts on the horizon given its employed strategy.\u201d<\/p>\n 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.<\/p>\n =====<\/p>\n RBC\u2019s Head of Global Energy Research Greg Pardy thinks Imperial Oil Ltd.<\/b> (IMO-T<\/a>) \u201cappears to have arrived from a relative valuation standpoint\u2014but 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.”<\/p>\n In a research report release Thursday, he said a recent series of institutional meetings in Montreal with the company\u2019s Investor Relations team focused on its \u201cupstream asset optimization journey along with its shareholder returns framework.\u201d <\/p>\n \u201cThe common thread amongst all the meetings we attended revolved around the relationship between Imperial\u2019s 5-per-cent NCIB, share price\/relative valuation and alternative uses of cash, including potential acquisitions,\u201d said Mr. Pardy.<\/p>\n \u201cImperial has become the gold standard when it comes to shareholder returns in recent years. Since the end of 2020 until June 30, 2025, IMO\u2019s 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\u2019s float shares outstanding (net of Exxon\u2019s 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.\u201d<\/p>\n Mr. Pardy did acknowledge investor concern about an elevated valuation for Imperial, given its \u201cjuggernaut share price performance (up 47 per cent in 2025 year-to-date)\u201d<\/p>\n \u201cWe wouldn\u2019t argue with that observation per se, but it warrants closer inspection from a few angles,\u201d he explained. \u201cImperial\u2019s 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 \u2014 and is in the glide path of Exxon Mobil (10.1 times) and Chevron (9.6 times). IMO\u2019s 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).”<\/p>\n Maintaining his \u201csector perform\u201d 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. <\/p>\n \u201cWe could see ourselves becoming more bullish towards the stock amid a relative pullback,\u201d said Mr. Pardy.<\/p>\n \u201cIn 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.\u201d<\/p>\n =====<\/p>\n The operational update from Paramount Resources Inc. <\/b>(POU-T<\/a>) highlighted \u201dthe 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.<\/p>\n On Monday, the Calgary-based company also announced it has sold 18.5 million common shares of NuVista Energy Ltd. (NVA-T<\/a>) at through a private agreement for aggregate cash consideration of$296-milion. Paramount now owns a 6.55-per-cent stake in the company.<\/p>\n \u201cThat 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,\u201d said Mr. Payne<\/p>\n \u201cThe 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.\u201d<\/p>\n The analyst thinks the company is now \u201cestablishing a funded view towards large increments of value ($36 per share long-term sum-of-the-parts).\u201d<\/p>\n \u201cPOU 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,\u201d he added.<\/p>\n Mr. Payne kept his \u201csector perform\u201d recommendation with his new $27.50 target. The average is $25.44.<\/p>\n =====<\/p>\n RBC Dominion Securities analyst Keith Mackey thinks Enerflex Ltd.<\/b> (EFX-T<\/a>) \u201cremains in strong position to capitalize on natural gas demand growth and has an improving FCF profile which should drive an inflection in shareholder returns.\u201d <\/p>\n \u201cEnerflex stands out as the only stock in our coverage group with positive Street earnings revisions for 2025 and 2026,\u201d he said in a client note. \u201cWe 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. <\/p>\n \u201cImproving 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.\u201d<\/p>\n Mr. Mackey now expects the Calgary-based company to allocate \u201cmeaningful FCF to shareholders, versus a minimal amount over the past three years.\u201d <\/p>\n \u201cWe 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,\u201d he added. \u201cEnerflex instituted an NCIB earlier this year. <\/p>\n \u201cEnerflex shares also remain attractively valued, and we believe continued operational performance and judicious capital allocation should close the gap to peers.\u201d<\/p>\n Maintaining his \u201coutperform\u201d rating and reaffirming Enerflex\u2019s spot on RBC\u2019s \u201cGlobal Energy Best Ideas\u201d list, Mr. Mackey raised his target to $15 from $13.<\/p>\n \u201cWe 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,\u201d he explained.<\/p>\n =====<\/p>\n TD Cowen\u2018s David Kwan thinks the recent sell-off in shares of Constellation Software Inc.<\/b> (CSU-T<\/a>) due to investor worries about the impact of artificial intelligence on its business is \u201coverdone\u201d and named the Toronto-based company one of his \u201ctop picks.\u201d<\/p>\n On Wednesday, Constellation\u2019s Volaris Group hosted a \u201cRedefining VMS in the AI Era\u201d webinar, which the analyst said reinforced his \u201cour view that CSU remains focused on the opportunities and threats.\u201d That followed a Monday question-and-answer session<\/a> with founder and president Mark Leonard that was meant to address AI concerns..<\/p>\n \u201cLike 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,\u201d said Mr. Kwan.<\/p>\n \u201cSimilar to CSU\u2019s 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\u2019 strong customer relationships and understanding of its vertical markets, proprietary data about its customers, and deep knowledge of customers\u2019 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.\u201d<\/p>\n He now sees Constellation\u2019s \u201crare\u201d share price underperformance presenting \u201ca compelling buying opportunity\u201d for investors. <\/p>\n \u201cCSU\u2019s 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,\u201d he said. \u201cThe 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. <\/p>\n \u201cThe 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\u2019s decline of 19 per cent).\u201d<\/p>\n Mr. Kwan reaffirmed his \u201cbuy\u201d rating and $5,700 target for Constellation shares. The average is $5,582.50.<\/p>\n =====<\/p>\n In other analyst actions:<\/p>\n * TD Cowen\u2019s David Deckelbaum downgraded Lithium Americas Corp.<\/b> (LAC-N<\/a>, LAC-T<\/a>) to \u201chold\u201d from \u201cbuy\u201d with a US$5 target. The average on the Street is US$4.88.<\/p>\n * Desjardins Securities\u2019 Gary Ho increased his AGF Management Ltd.<\/b> (AGF.B-T<\/a>) target to $17.75 from $16.50 with a \u201cbuy\u201d rating. The average is $16.55.<\/p>\n \u201c3Q 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\u2019s inflows, healthy balance sheet and recent M&A transactions in the space,\u201d said Mr. Ho.<\/p>\n * Canaccord Genuity\u2019s Matthew Lee cut his Air Canada <\/b>(AC-T<\/a>) target to $25, below the $25.31 average, from $28, keeping a \u201cbuy\u201d rating.<\/p>\n * CIBC\u2019s Cosmos Chiu raised his Wheaton Precious Metals Corp. <\/b>(WPM-N<\/a>, WPM-T<\/a>) target to US$135 from US$130 with an \u201coutperformer\u201d rating. The average is US$120.18.<\/p>\n","protected":false},"excerpt":{"rendered":"Inside the Market\u2019s roundup of some of today\u2019s key analyst actions National Bank Financial analyst Giuliano Thornhill is…\n","protected":false},"author":2,"featured_media":450197,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3091],"tags":[6934,6925,6935,1500,6918,6936,51,943,6917,6930,6931,6927,6919,6916,1700,2266,728,6929,6923,6946,6920,6921,1234,6926,388,3611,6607,2441,603,6941,6942,6944,6939,6943,6937,6940,6922,6932,6933,285,3027,6938,6924,53,183,6928,16,15,727,263,6945],"class_list":{"0":"post-450196","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-alberta","9":"tag-arts-news","10":"tag-bc","11":"tag-breaking-news","12":"tag-breaking-news-video","13":"tag-british-columbia","14":"tag-business","15":"tag-canada","16":"tag-canada-news","17":"tag-canada-sports","18":"tag-canada-sports-news","19":"tag-canada-trafficcanada-weather","20":"tag-canadian-breaking-news","21":"tag-canadian-news","22":"tag-economy","23":"tag-education","24":"tag-environment","25":"tag-federal-government","26":"tag-foreign-news","27":"tag-globe-and-mail","28":"tag-globe-and-mail-breaking-news","29":"tag-globe-and-mail-canada-news","30":"tag-government","31":"tag-life-news","32":"tag-lifestyle","33":"tag-local-news","34":"tag-manitoba","35":"tag-markets","36":"tag-national-news","37":"tag-new-brunswick","38":"tag-newfoundland-and-labrador","39":"tag-northwest-territories","40":"tag-nova-scotia","41":"tag-nunavut","42":"tag-ontario","43":"tag-pei","44":"tag-photos","45":"tag-political-news","46":"tag-political-opinion","47":"tag-politics","48":"tag-politics-news","49":"tag-quebec","50":"tag-sports-news","51":"tag-technology","52":"tag-travel","53":"tag-trudeau","54":"tag-uk","55":"tag-united-kingdom","56":"tag-us-news","57":"tag-world-news","58":"tag-yukon"},"share_on_mastodon":{"url":"","error":"Validation failed: Text character limit of 500 exceeded"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/450196","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=450196"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/450196\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/450197"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=450196"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=450196"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=450196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}