Inside the Market\u2019s roundup of some of today\u2019s key analyst actions<\/p>\n
Desjardins Securities analysts led by Chris MacCulloch have made changes to their commodity price assumptions – most notably lowering forecasts for natural gas prices – resulting in two rating downgrades and one upgrade in the Canadian energy sector. <\/p>\n
The new assumptions were made in conjunction with reviewing second quarter results from producers.<\/p>\n
\u201cWhile acknowledging that our bearish oil price thesis has been slow to materialize, we ultimately expect market conditions to loosen exiting the summer driving season. Since our last update in late July, OPEC+ has communicated another 548 mbbl\/d supply hike (for September), which would conclude the return of the initially planned 2.2 mmbbl\/d tranche 12 months ahead of schedule, with additional spare productive capacity on tap. However, most forecasters expect the cartel to pause supply hikes this fall, and we would not rule out the potential for a rapid pivot in output policy if Brent prices deteriorate below the US$60\/bbl level,\u201d Desjardins said in a note to clients. <\/p>\n
\u201cMeanwhile, the geopolitical environment remains volatile as market focus shifts from the Middle East to Ukraine, where there is rising international pressure on the Russian Federation to establish a ceasefire, which would likely be bearish for oil prices. Accordingly, we have maintained our 2025\u201326 WTI price deck of US$65\/bbl and US$55\/bbl, respectively, the latter of which is ~12% below the current futures strip. Notably, we have made limited adjustments to our oil and refined product forecast, including Canadian differentials,” it added.<\/p>\n
For natural gas, Desjardins has grown more cautious, due to elevated production in both Canada and the U.S., which has diminished the impact on pricing from rising liquified natural gas export capacity. <\/p>\n
\u201cSpecifically, Lower 48 production has recently flirted with the 110 bcf\/d level, which appears poised to result in relatively full US storage caverns entering the winter heating season. Meanwhile, Western Canadian output remains elevated, which has crashed AECO and Station 2 prices, although we see emerging relief from ramping LNG Canada operations. Accordingly, we have slashed our 2025\u201326 NYMEX price forecast to US$3.50\/mcf and US$4.00\/mcf (from US$3.75\/mcf and US$4.50\/mcf), respectively, which was the primary driver of our reduced AECO forecast of C$1.75\/mcf and C$3.75\/mcf (from C$2.25\/mcf and C $4.25\/mcf, respectively),\u201c Desjardins said. <\/p>\n
NuVista Energy Ltd. <\/b>(NVA-T<\/a>) was downgraded to \u201chold\u201d from \u201cbuy\u201d while the price target was cut to C$17 from C$17.50. The average analyst price target is C$17.50, according to LSEG data.<\/p>\n \u201cOur downgrade is partially commodity price\u2013driven, reflecting our reduced natural gas price forecast, which weighed on 2026 FCF generation relative to peers given the company\u2019s elevated operational torque and reliance on third-party infrastructure. The latter remains a point of increased frustration following recent delays at third-party facilities, which forced temporary production curtailments in 2Q25 that have spilled over into 3Q25. Although NVA is well-positioned to continue executing on its ambitious growth targets, given support from a pristine balance sheet which enables it to direct essentially all free cash flow to share repurchases, we expect relatively modest buybacks on our US$55\/bbl WTI and US$4.00\/mcf NYMEX 2026 price forecast. Accordingly, we would await a more attractive entry point as we see better opportunities to deploy capital elsewhere in the sector,” Desjardins said.<\/p>\n Spartan Delta Corp.<\/b> (SDE-T<\/a>) was downgraded to \u201chold\u201d from \u201cbuy\u201d with a price target of C$5.75. The average analyst target is C$5.90.<\/p>\n Spartan has been on a tear since June 3, rallying 61% compared with a 7% gain for the S&P\/TSX Capped Energy Index.<\/p>\n \u201cTo be clear, we are highly encouraged by the strong well results the company has delivered in the play to date, which have been complemented by improvements in cost structure, including recent investments in water infrastructure. However, we caution that cash flow generation would be subdued with our US$55\/bbl WTI and C$3.75\/mcf AECO 2026 price forecast, while remaining cognizant that the Duvernay retains elevated development costs relative to other oil-weighted plays in the WCSB. To put a finer point on it, following our commodity price adjustments, we now calculate a capex-adjusted payout ratio of 138% next year assuming a C$375m capital program, which would nearly exhaust the company\u2019s financial liquidity by year-end 2026, suggesting that SDE would be forced to throttle development activity or seek additional sources of capital. Meanwhile, we expect a positive operational update from the company prior to the upcoming fall conference season, which could lead to further outperformance. Either way, we would await a more attractive entry point as we see better opportunities to deploy capital elsewhere in the sector,\u201d Desjardins said. <\/p>\n More positively, Desjardins upgraded Whitecap Resources Inc.<\/b> (WCP-T<\/a>) to \u201cbuy\u201d from \u201chold\u201d while raising its price target to C$12.50 from C$12. The average analyst price target is C$13.17.<\/p>\n Whitecap has returned 17.5% since Desjardins downgraded the stock on June 3, more than double the return of the energy index. \u201cSimply put, we got the call wrong,\u201d Desjardins conceded. <\/p>\n \u201cFollowing several rounds of positive estimate revisions since early June and the company\u2019s stellar 2Q25 financial results, we have gained better comfort in the resilience of the business model in a softer commodity price environment, including its ability to sustain the C$0.73\/share annual dividend. Moreover, we recognize that our model retains some degree of conservatism following the massive 2Q25 cash flow beat, which could support continued outperformance, particularly with respect to the C$210m of identified synergies from the Veren transaction, which we ultimately expect to be lapped. Bottom line, we see a green light to return to the story.\u201d<\/p>\n Overall in the energy sector, Desjardins analysts said they remain biased toward large-cap producers, which offer superior downside protection in a softer commodity price environment. They highlighted Suncor Energy<\/b> (SU-T<\/a>), Cenovus Energy<\/b> (CVE-T<\/a>) and Topaz Energy<\/b> (TPZ-T<\/a>) as top picks.<\/p>\n RBC Capital Markets analyst Irene Nattel has raised her price target on Dollarama Inc<\/b> (DOL-T<\/a>) to C$212 from C$207 ahead of fiscal second quarter results on Wednesday. She is maintaining an \u201coutperform\u201d rating. <\/p>\n Ms. Nattel is forecasting second quarter EPS of $1.14, up 12% from a year earlier and a penny better than the consensus. <\/p>\n \u201cForecasting solid DOL FQ2 results with KPIs toward the high end of F26 guidance, reflecting value-oriented yet resilient consumer spending,\u201d the analyst said in a note to clients. \u201cWe are also incorporating preliminary forecasts for Australia (13 days of FQ2) and fine-tuning core Canadian forecast, notably Q4\/ F26E and F28E,\u201d which resulted in the higher price target, she said. <\/p>\n \u201cSector-leading growth trajectory underpinned by visible and sustainable runway in core Canadian market, augmented by accelerating contribution from LatAm, emerging opportunities in Mexico\/Australia, and favourable flow of funds all supportive of DOL premium valuation, in our view,\u201d Ms. Nattel said.<\/p>\n The average analyst target is C$204.79.<\/p>\n CIBC analyst Ty Collin upgraded Martinrea International Inc<\/b> (MRE-T<\/a>) to \u201coutperformer\u201d from \u201cneutral\u201d while raising the target price to C$13 from C$10.50. The average analyst price target is C$12.35. <\/p>\n Mr. Collin, who recently took over coverage of the stock at CIBC, said the bank sees a \u201cmore positive setup\u201d for the auto suppliers now that worst-case tariff risks have receded and lower expectations are priced in for the sector.<\/p>\n \u201cIn addition, our outperformer rating for MRE reflects its attractive valuation and an improved cash flow profile that provides increased capacity for capital deployment. While we acknowledge that MRE\u2019s small market cap limits ownership from certain investors, we see an attractive risk-reward setup for the stock, with limited downside,\u201d Mr. Collin told clients in a note.<\/p>\n He also sees potential for a resumption in share buybacks in the coming quarters at Martinrea, which could act as an important catalyst. <\/p>\n Meanwhile, he also upgraded the rating to \u201coutperformer\u201d from \u201cneutral\u201d on Linamar Corp <\/b>(LNR-T<\/a>) while raising the target price to C$87 from C$77. The average analyst target is C$79.83.<\/p>\n \u201cLNR is our top pick within our auto coverage universe based on its best-in-class balance sheet, leading profitability and cash flow, modest tariff exposure, and growth upside,\u201d Mr. Collin said. <\/p>\n \u201cWe believe that worst-case tariff risks for the auto industry have receded, and we see LNR as a fundamentally healthy business well positioned to navigate near-term challenges. Despite a strong rebound in the shares since April, the stock trades at a below-average valuation on earnings estimates that are at or near cyclical lows, and we see significant upside when a true earnings recovery starts to get priced in. We acknowledge the risk that our call may be early, but overall we see an attractive risk-reward setup with limited downside risk,\u201d he said.<\/p>\n Ty Collin has also taken over coverage of Autocanada Inc. <\/b>(ACQ-T<\/a>) at CIBC, and he upgraded the rating to \u201coutperformer\u201d from \u201cneutral\u201d. CIBC\u2019s price target went to C$38 from C$32.50. The average analyst target is C$35.16.<\/p>\n Mr. Collin said the operational transformation at Autocanada has exceed expectations, which has led to meaningful improvements in profitability and leverage. <\/p>\n \u201cThe business has been simplified, and we believe it is positioned to return to a growth footing in 2026 with a streamlined cost structure and new leadership. We acknowledge that ACQ still faces an uncertain macro environment punctuated by tariffs. However, its modest valuation reflects these risks, in our view, and we believe the company has enough internal levers for earnings growth (i.e., cost improvement, sales initiatives, M&A) to compensate for market-level uncertainties,\u201d Mr. Collin told clients. <\/p>\n