Inside the Market\u2019s roundup of some of today\u2019s key analyst actions<\/p>\n
Desjardins Securities has downgraded two Canadian mining stocks as it previewed second quarter earnings for the sector and revised its price assumptions for both base and precious metals. <\/p>\n
Teck Resources Ltd.<\/b> (TECK-B-T<\/a>) was downgraded to a \u201chold\u201d from a \u201cbuy\u201d with the price target dropping to C$58 from C$72.<\/p>\n Desjardins analysts led by Bryce Adams said the key rationale for the downgrade was risk that guidance could be cut for the giant Quebrada Blanca mine in Chile.<\/p>\n \u201cWe now model 218.5kt of copper produced this year, below guidance of 230\u2013270kt. We expect a guidance cut and a continuation of a slower-than-expected ramp-up to serve as a headwind for TECK.B shares … On a consolidated basis, we model 491kt, directly at the low end of the company\u2019s guidance (490\u2013565kt),\u201c the analysts said. <\/p>\n Desjardins termed their downgrade as only \u201cshort-term positioning.\u201d <\/p>\n \u201cWe continue to have a favourable longer-term view on the shares given the company\u2019s high-quality assets and strong balance sheet. The risk to our call is reaffirmed guidance (obviously) and continued use of the buyback program, which has been active and has supported the shares through 1H25,\u201d Desjardins analysts said. <\/p>\n Meanwhile, Lundin Gold Inc.<\/b> (LUG-T<\/a>) was downgraded to \u201chold\u201d from \u201cbuy\u201d, but the price target was raised to C$70 from C$62. <\/p>\n Desjardins mostly linked the downgrade to recent share price appreciation and valuation concerns. <\/p>\n \u201cLUG shares are up 125% ytd and now trade at 1.3x our NAVPS and 10.4x our 2025 EV\/EBITDA estimates vs peers at an average of 0.73x and 7.1x, respectively. We view LUG as a well-run company with a high-quality asset which continues to outperform expectations and demonstrates significant exploration upside but expect that the pace of share price appreciation through 1H25 is not sustainable. We recommend that investors take some profit,\u201d Desjardins analysts said.<\/p>\n In terms of its revised outlook for metals prices, Desjardins took a more bullish stance on precious metals and a more cautious view on base and bulk commodities. <\/p>\n Its gold price estimates for 2025 were raised from US$3,037\/oz to US$3,330\/oz, 2026 estimates went from US$3,160\/oz to US$3,537\/oz, and 2027-plus forecasts went from US$3,276\/oz to US$3,688\/oz. Similarly, silver estimates were revised upward across all years.<\/p>\n In contrast, copper price assumptions were slightly lower on the back of a more tempered view on industrial demand, with 2025 now at US$4.39\/lb (down from US$4.51\/lb), 2026 at US$4.43\/lb (down from US$4.49\/lb) and 2027+ at US$4.46\/lb (down from US$4.48\/lb). Desjardins is assuming continued weakening in the U.S. dollar. <\/p>\n ***<\/p>\n RBC Capital Markets analyst Paul Treiber jacked up his price target on Shopify Inc.<\/b> (SHOP-N<\/a>, SHOP-<\/a>T) to US$145 from US$125 while reiterating an \u201coutperform\u201d rating. He said several data points suggest the company\u2019s growth momentum has continued and disruption from tariffs has been minimal so far. <\/p>\n \u201cData from several third-party sources suggest Shopify\u2019s GMV (Gross Merchandise Value) growth and MRR (Monthly Recurring Revenue) momentum were healthy through Q2, likely slightly above consensus,\u201c Mr. Treiber told clients. \u201dWe believe Shopify\u2019s continued growth and market share gains will help sustain Shopify\u2019s premium valuation multiple.” <\/p>\n Job postings at Shopify are at multi-year lows, which should end up aiding margins, he said. \u201cShopify\u2019s job postings fell 38% Y\/Y to 101, which is the second lowest quarterly number in nearly 5 years (since Q4\/FY20). Given GMV strength, MRR growth, and reduced job postings, we believe Shopify\u2019s Q2 adj. EBIT margins may exceed RBC\/consensus estimates for 13.9%\/14.2%,\u201d the analyst said. <\/p>\n Mr. Treiber said Shopify\u2019s market share gains are likely to continue. \u201cNew channel partnerships strengthen Shopify\u2019s value proposition as a multi-channel commerce enabler. During Q2, Shopify announced a number of partnerships, including Roblox, OpenAI, and Coinbase\/Stripe. We believe Shopify\u2019s innovation and channel support will help continue to drive share gains, particularly at enterprises and in international markets.\u201d<\/p>\n He termed Shopify as one of RBC\u2019s most \u201ccompelling long-term organic growth stories\u201d in its coverage. <\/p>\n \u201cShopify is trading at 14x next 12 months Enterprise value\/Sales, above its 3-year average (9x, 4-14x range) and above fast-growing SaaS peers (11x). Our revised $145 price target is now based on 14x CY26e EV\/S, up from 12x previously, as we see Shopify\u2019s valuation re-rating towards the high-end of its 3-year range sustained, given improving visibility to sustained growth and market share gains,\u201d RBC said.<\/p>\n ***<\/p>\n TD Cowen analyst Aaron MacNeil downgraded global drilling rig data management services provider Pason Systems Inc. <\/b>(PSI-T<\/a>) to \u201chold\u201d from \u201cbuy\u201d as he previewed the company\u2019s second quarter results. His price target remains at C$13, which he thinks doesn\u2019t provide enough upside for a buy rating. <\/p>\n \u201cFollowing Q1\/25 results, Pason\u2019s share price has increased about 10%, and is trading at a 36% premium to the Energy Services peer group on a 2025E EV\/EBITDA basis,\u201d Mr. MacNeil said. \u201cNote that Pason is trading at a slight discount to its four-year average multiple (5.6x vs. 6.0x); however, given our prevailing sector outlook, we believe that a modest discount is warranted. Specifically, we are not contemplating a meaningful rebound in industry activity until H2\/26, and would characterize the broader outlook as having meaningful uncertainty.\u201d <\/p>\n Mr. MacNeil also made changes to his earnings estimates ahead of quarterly results.<\/p>\n \u201cPason\u2019s business model has high fixed costs, and as a result, features meaningful operating leverage to changes in industry activity. As a result, we are decreasing our estimates by about 5% for Q2\/25, 2% for 2025 and 1% for 2026,\u201d he said. <\/p>\n ***<\/p>\n TD Cowan analyst Derek Lessard expects Premium Brands Holdings Corp.<\/b> (PBH-T<\/a>) to report a strong second quarter and raised his price target on the stock to C$140 from C$120. He reiterated a \u201cbuy\u201d rating. <\/p>\n \u201cDespite the temporary margin impact from commodity inflation, we remain bullish on PBH shares given the strong 2H\/25 outlook. The current valuation of 9.8x forward cons EBITDA (<\/p>\n ***<\/p>\n Scotiabank said that tailwinds for power utilities \u201ccontinue to multiply,\u201d and it expects the group will continue to see strong share price returns in the third quarter.<\/p>\n It upgraded Transalta Corp.<\/b> (TA-T<\/a>) to \u201csector outperform\u201d from \u201csector perform\u201d, commenting that it sees it well positioned to benefit from power demand growth in Alberta. The price target was raised to C$20 from C$16.<\/p>\n \u201cTransAlta\u2019s shares have been the weakest in our coverage universe on a year-to-date basis (down 20%), greatly underperforming its Canadian and U.S. power peer group,\u201d commented Scotiabank analyst Robert Hope. \u201cThe shares have had some momentum in Q2\/25, and we expect this to continue as we believe there will be positive catalysts related to Alberta data centers in the back half of the year and we forecast a favourable quarter.\u201d<\/p>\n But Scotiabank downgraded Boralex Inc.<\/b> (BLX-T<\/a>) to \u201csector perform\u201d from \u201csector outperform\u201d, citing recent share price returns and fewer relative catalysts. The price target is unchanged. <\/p>\n \u201cWe continue to view Boralex as a high quality renewable developer with an attractive asset base and a strong growth outlook. However, we see it as having fewer catalysts in the back half of the year relative to the remainder of our power coverage. Our $36 target price implies an 11.4x EV \/ 2027E EBITDA, which would be a sizable premium to the majority of the coverage group,\u201d Mr. Hope said.<\/p>\n ***<\/p>\n Now\u2019s the time to buy Cenovus Energy Inc.<\/b> (CVE-T<\/a>), says CIBC analyst Dennis Fong, who issued a comprehensive look at the company this week ahead of second quarter results.<\/p>\n \u201cWe expect Q2\/25 results could be a catalyst, whereby management provides positive updates on progress made at its refining segment, line-of-sight to completion of major capital projects, and opportunities to improve bitumen and heavy oil production,\u201d Mr. Fong said in a note. <\/p>\n He reiterated an \u201coutperformer\u201d rating and raised his price target to C$30 from C$28. <\/p>\n \u201cThe consensus view is that rate-of-change in free cash flow generation as major projects are completed could drive increased buybacks. We believe strong runtime and ex-turnaround unit operating cost improvement could drive 54% upside upside to this thesis,\u201c he said.<\/p>\n He says Cenovus\u2019 downstream operations are now poised for improvements.<\/p>\n \u201cCenovus has now had an opportunity to open and configure many of the major pieces of equipment across its operated refining network. This is a two-year journey to higher confidence in high mechanical availability, but we expect operated refineries have a 12-month window to show higher runtime as major turnarounds have now been completed. This has the added benefit of lowering unit opex, with higher throughput and the absence of previously expensed ramp-up costs. The remaining units at Toledo are expected to be optimized in the H1\/27 planned turnaround,\u201d he said.<\/p>\n ***<\/p>\n Scotiabank analyst Eric Winmill initiated coverage on Blue Moon Metals Inc.<\/b> (MOON-X<\/a>) with a \u201csector outperform\u201d rating and C$5 price target. <\/p>\n He said the company\u2019s asset portfolio offers near-term copper, zinc, and precious metals production potential as well as possible new findings on the exploration side. <\/p>\n The company\u2019s flagship assets include the Nussir copper-gold-silver development project in Norway, the Blue Moon zinc-gold-silver-copper development project in the United States, and the NSG\/Sulitjelma copper and precious metals exploration project in Norway. <\/p>\n \u201cAll three projects are considered primarily brownfield sites, having seen varying levels of prior production, and we expect that to help expedite permitting and reduce overall development risk,\u201d Mr. Winmill said.<\/p>\n He said the company has an experienced management team in place to advance the projects. <\/p>\n ***<\/p>\n In other analyst actions:<\/p>\n Despite the negative share reaction Friday to earnings, at least 14 analysts raised their price targets on Netflix<\/b> (NFLX-Q<\/a>) The average analyst target is now US$1,295, up from US$1,186 a month ago, according to LSEG data. <\/p>\n Microsoft<\/b> (MSFT-Q<\/a>): BofA Global Research raises price objective to US$585 from US$515; Deutsche Bank raises target price to US$550 from US$500<\/p>\n Capital Power Corp<\/b> (CPX-T<\/a>): Scotiabank raises target price to C$67 from C$64<\/p>\n Stantec Inc<\/b> (STN-T<\/a>): CIBC raises target price to C$168 from C$156<\/p>\n Toromont Industries Ltd<\/b> (TIH-T<\/a>): CIBC raises target price to C$129 from C$120<\/p>\n