Monday’s analyst upgrades and downgrades

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

National Bank Financial analyst Gabriel Dechaine is preparing for “mixed” third-quarter results from Canada’s life insurance providers, expecting “a modest growth deceleration” to be evident” due to flatter equity markets and rising bond yields.

Modelling 5-per-cent year-over-year growth, down from 8 per cent during the first half of 2026, he expects the recent turbulence in the bond markets to be a focus of discussion on earnings calls.

“As discussed in [a] September 20th report, the short-term implications of higher rates can be more negative, while the longer-term ones are more positive,” he said.

“Our two top picks in the sector are MFC and SLF. However, we do not expect Q3/26 results to be a positive catalyst for either stock. MFC’s earnings continue to be clouded by higher claims costs in its Canadian Group business, along with volatile mortality experience in its legacy U.S. Individual Insurance business. Longer term, we like the stock’s positive leverage to rising rates, re-rating upside potential from de-risking and growth potential of its Asia segment. SLF faces a challenging quarter for its U.S. Dental business, which is in the early stages of a long-term turnaround, while MFS outflows could be outsized once again. We continue to anticipate a sharp turnaround of its U.S. Stop Loss business performance by Q4/26.”

In a client report released Monday, Mr. Dechaine said interest rates will have a noticeable negative impact on reported earnings per share across the industry “with equity market impacts broadly neutral.”

“Additionally, we expect another quarter of non-fixed income (alternatives, real estate) underperformance relative to benchmark assumptions,” he added.

With that view, the analyst updated his target prices for stocks in the space and highlighted items to watch during earnings season. They are:

* Great-West Lifeco Inc. (GWO-T, “sector perform”) to $94 from $95. The average is $97.18.

Analyst: “1) Canadian Group Insurance claims rising; 2) Empower Wealth business should see improving flows, moderating profit growth; 3) CRS repositioning could lead to more quarterly earnings volatility.”

* IA Financial Corp. Inc. (IAG-T, “sector perform”) to $215 from $216. Average: $219.29.

Analyst: “1) Insurance experience has been volatile so far in 2026; 2) Auto warranty profit improvement a gradual affair; 3) Buyback pace decelerated.”

* Manulife Financial Corp. (MFC-T, “outperform”) to $68 from $69. Average: $67.42.

Analyst: “1) Update on 18-per-cent ROE target; 2) Asia profit growth and sales in the spotlight; 3) Insurance experience in Canada and the U.S. could weigh on the quarter.”

* Sun Life Financial Inc. (SLF-T, “outperform”) to $124 from $125. Average: $117.

Analyst: “1) U.S. Stop Loss and Dental business updates; 2) SLF’s Canadian Group business has been a positive outlier; 3) MFS outflows could push the US$20-billion mark once again.”

Mr. Dechaine’s target for Sagicor Financial Co. Ltd. (SFC-T, “outperform”) remains $13, exceeding the average of $12.19.

Analyst: “1) Upside to ROE targets?; 2) U.S. Annuity sales; 3) Buyback pace has slowed.”

RBC Capital Markets analyst Ken Herbert thinks the setup for MDA Space Ltd. (MDA-T) is “positive” ahead of the release of its quarterly results on Nov. 5, pointing to “further execution against its backlog (Globalstar sats launch), a recently announced buyback program (5 per cent of shares), and an announced investment (9.5 per cent) from a strategic (CSG) that could expand its European footprint.

“We believe the progress since 2Q26 has been incrementally positive, and we view the stock as undervalued, especially considering its pending acquisitions (BCT & CLS),” he added.

In a report released Monday, Mr. Herbert said the Brampton, Ont.-based company’s Sept. 21 announcement of a normal course issuer bid to purchase for cancellation up to 8.1 million common shares has been “well received” by investors and is well received by investors, while Czech defence and industrial conglomerateCzechoslovak Group (CSG) acquired a 9.5-per-cent equity stake in MDA could lead to further expansion.

“We view this as an opportunistic way to support the stock, especially as it has traded down with other macro factors (further de-rating of space and defense tech names),” he said. “We do not believe higher leverage is a headwind for MDA sentiment, and see the buyback as a strong positive.

“CSG investment could broaden MDA’s European footprint. We believe CSG is looking to broaden its space portfolio and views MDA as a significant way to add space exposure. With CSG’s management headquartered in the Czech Republic, we believe there could be opportunities for incremental eastern European space or defense activity even as the longer-term strategic benefits of the investment are yet to be defined.”

Mr. Herbert “slightly” lowered his 2027 Lightspeed revenue contribution due to the timing of the close of its definitive agreement to acquire 100 per cent of U.S.-based spacecraft and satellite maker Blue Canyon Technologies LLC, but he sees “additional upside into 2028 with additional funding.” spacecraft and satellite maker ...

“We continue to believe organic growth will remain the focus for investors, with additional booking announcements as key catalysts for the stock,” he said. “The company continues to call out $400-million in contract wins that are not yet reflected in the backlog from Telesat, with the ESCAPE program one of the more substantial defense opportunities.”

Maintaining his “outperform” rating for MDA shares, he lowered his target to $55 from $60. The average on the Street is $66.08.

“We continue to value the stock on a pro-forma basis, with the inclusion of the BCT & CLS acquisitions ... Our conservative framework suggests upside to numbers and is supportive of upside to the stock,” he concluded.

When Restaurant Brands International Inc. (QSR-N, QSR-T) releases its third-quarter financial results on Oct. 29, Citi analyst Jon Tower anticipates seeing sequential improvement from Tim Hortons alongside “solid” same-store sales at Burger King.

“We expect 3Q results show (1) that BK U.S. continued to win share in a challenging consumer backdrop (on the back of product upgrades, refreshed media campaigns, and direct competitors closing stores), (2) new beverages, IP tie-ins and loyalty shifts provided a boost to TH Canada comps and (3) BK International saw a quarter-over-quarter improvement in NUG [net unit growth],” he said.

“While U.S. top-line trends appear to have slowed into F4Q, we expect QSR backs FY26 guidance and don’t see investor debates shifting much post print.”

In a client note released early Monday, Mr. Tower pointed to a trio of data points in justifying his optimistic outlook: “(1) Year-over-year BK U.S. footfall accelerated approximately 2 per cent quarter-over-quarter to 3.3 per cent and BK continued to show 1-per-cent year-over-year share gains among the Big 3. (2) Second Measure data showed modestly slower BK U.S. sales/transactions quarter-over-quarter, ditto for PLKI [Popeyes Louisiana Kitchen Inc.] U.S. (3) Canada’s unemployment rate was near recent lows during the quarter.”

He added: “Key topics/questions (1) Macro backdrop in Canada and net impact of higher gas prices on demand? (2) Initial reaction to new improved nuggets (9/1) at BK U.S., and does QSR view this is a comparable opportunity to Whopper elevation campaign? What is the pipeline of other products that could be improved? (3) How does BK expect franchisees to step into remodels with its larger domestic competitor looking to spend more/store on U.S. remodels ($1.2-million vs. $0.75-million at BK), supported by stronger store-level cash flows ($0.5-million vs. $0.185-million in ’25) and corporate partnering? Do recent changes in the beef market increase the likelihood of remodels ramping back up in ’27. (4) What U.S. beverage trends (e.g., handcrafted energy, new DT-only competition, ‘drops’/tie-ins, proliferating RTD options) are also occurring in Canada or could occur in Canada and how is Tims thinking about near-term responses and long-term evolution.”

Mr. Tower trimmed his 2026 and 2027 earnings per share projection by a penny and 7 US cents, respectively, to US$4.11 and US$4.32, citing foreign exchange considerations.

That led him to cut his price target for Restaurant Brands shares by US$1 to US$79, keeping a “neutral” rating. The average on the Street is US$85.50.

“The company has demonstrated an ability to improve franchisee profitability in core home markets across the portfolio, and we expect this broadly continues, along with strong unit growth for Burger King International, ramping of PLK brand globally and solid comp growth at TH Canada,” he said. “However, limited visibility into the economics of nascent businesses outside core markets (eg, PLK INTL, TH INTL, FHS [Firehouse Subs]) means it is difficult to underwrite NRG (new restaurant growth) returning to and sustaining at more than 5 per cent and layering this into valuation. At the same time, we see above-average room for near- to medium-term estimate volatility related to the Burger King U.S. brand repositioning/reinvestment, particularly as the competitive set ramps promotional activity to drive traffic.”

In a third-quarter earnings preview report for Canadian critical minerals companies titled Equities Lag, Opportunities Emerge, National Bank Financial analyst Mohamed Sidibé emphasized term pricing for uranium has firmed, however contracting “remains gradual.”

“Uranium spot prices have remained broadly stable since Q2/26, while term pricing has firmed as utilities look further out and uncovered requirements rise later this decade,” he explained. “Term awards have increased but remain below replacement levels, and we expect contracting to improve gradually without reaching replacement levels over the next 12–24 months. Our WNA Symposium discussions suggest that greater recognition of scarcity has yet to create buying urgency, even as suppliers make greater use of market-related pricing and seek firmer ceiling offers for later deliveries. Secondary supplies continue to bridge the near-term primary production shortfall, while projected modest surpluses in the early 2030s depend on restarts and greenfield projects arriving on schedule, with permitting, financing and ramp-up delays potentially bringing deficits forward.

“Our near-term price estimates and $100/lb long-term incentive price remain unchanged. We continue to expect tight market conditions and gradual improvement in term contracting to support uranium prices, though a sustained equity recovery likely needs relief in real yields or better visibility into contract awards, funding and project delivery. We therefore see the pullback as an opportunity to add exposure selectively, with greater attention to when each company’s uranium exposure can generate cash flow. We continue to prefer developers that can secure funding and advance toward production like DML and NXE, while CCO’s recent pullback offers an attractive entry point.”

Mr. Sidibé’s lone target price adjustment for uranium-linked equities was a 25-US-cent increase for Colorado-based Uranium Royalty Corp. (UROY-Q) to US$4 with an “outperform” rating. The average is US$4.66.

For lithium, he thinks the impact of the rush toward battery energy storage systems has kept supply in deficit, however prices remain “under pressure.”

“Lithium carbonate and spodumene prices are down 33 per cent and 34 per cent, respectively, quarter-over-quarter, with an early Q3 rally reversed before quarter ends, and prices weakening further into October,” said Mr. Sidibé. “We have updated our lithium balances to reflect the strong battery energy storage system (BESS) demand seen so far in 2026, lifting near-term demand while our supply estimates remain largely unchanged over 2026-2035. We now forecast a 2026 deficit of 209 kt LCE (10 per cent of demand), up from 6 kt previously, and expect this to continue into 2027 with a deficit of 86 kt LCE (4 per cent of demand). From 2028 to 2030, we model a modest surplus of 1 per cent of demand, excluding non-de-risked greenfield projects, and we believe we have captured most of the supply upside within our estimates. The risk is mostly to the downside on supply, with tighter Zimbabwe export rules or delays across Jiangxi and Africa able to extend tightness and flip our surplus into deficits. Near-term prices are revised lower toward spot, with Q4/26 now at $17,500/t LCE, and we trim our 2027 price estimates by 13 per cent year-over-year. Prices should then ease toward our unchanged long-term $18,500/t LCE, with levels below this in the surplus years of 2028-2030.

“We continue to prefer LAR for its current production and near-term earnings, which has held up better than developers year-to-date, while PMET offers more spodumene leverage but remains the higher-risk development exposure.”

Mr. Sidibé made these target changes:

• American Lithium Corp. (LI-X, “sector perform”) to 50 cents from 60 cents. Average: 60 cents.
• Lithium Americas Corp. (LAC-T, “sector perform”) to $5.25 from $6.25. Average: $7.12.
• Lithium Argentina AG (LAR-N/LAR-T, “outperform”) to US$11 from US$13. Average: US$12.11.

He also cut his target for Nouveau Monde Graphite Inc. (NOU-T, “outperform”) to $3.50 from $4. The average is $4.68.

Ahead of Gildan Activewear Inc.’s (GIL-T) third-quarter results on Oct. 27, National Bank Financial analyst Vishal Shreedhar warns recent channel checks reveal demand for Printwear remains “tepid” at best, however, he feels the Montreal-based company’s shares prices in that weakness.

In a note released before the bell, he emphasized Gildan’s valuation “reflects a punitive scenario.”

Mr. Shreedhar explained: “(1) GIL anticipates a $220-million IEEPA tariff refund and plans to reinvest 50-per-cent into growth initiatives. We estimate a $0.40-$0.50 net benefit to Q3 EPS. (2) Our channel checks of the Printwear industry suggest tepid trends, select price increases by GIL and weak fleece performance. Our estimates now reflect GIL falling shy of its Q3 and 2026 revenue guidance. (3) We believe GIL’s valuation already reflects a punitive case. For example, in a scenario where GIL cuts guidance sharply, we see GIL’s shares possibly trading down to high single-digit NTM [next 12-month] P/E on normalized earnings (historical 10-year low is 8.0 times), suggesting a stock price of Cdn$45 today (HBI/GIL combination with $100-million of synergies and no growth). The upside is significant assuming a normalized multiple of 15.3-times NTM P/E (10-year monthly avg.), suggesting a stock price of Cdn$90.”

For the quarter, Mr. Shreedhar is now projecting sales of US$1.626-billion, narrowly under the Street’s expectation of US$1.636-billion but up from US$1.61-billion during the same period a year ago. He attributes the gain to “the Hanes contribution, conclusion of inventory reduction, and strategic growth initiatives, partly offset by retail market weakness and a shift of fleece shipments to Q4. Wholesale and retail should return to growth in Q3.”

He’s estimating earnings per share of US$1.59, which is a penny under the consensus but up 59 US cents from a year ago. He links that 60-per-cent year-over-year growth to “higher sales/gross profit from Hanes, a tariff refund, operating leverage and synergy capture are partly offset by higher SG&A, D&A, interest expense, tax rate and share count.”

Maintaining his investing view on Gildan as well as his “outperform” rating, Mr. Shreedhar lowered his target to $98 (Canadian) from $107, citing “the uncertain Printwear backdrop.” The average is $101.10.

“The medium-term fundamental drivers for GIL are synergy capture from the Hanes acquisition and organic growth (3-5-per-cent 2026-2028 CAGR), supported by capacity optimization, IT platforms, mix, market share, etc. Synergy guidance is $250-million ($300-million is possible),” he said.

In other analyst actions:

* In response to its deal to be acquired by Cenovus, Jefferies’ Sam Burwell moved Athabasca Oil Corp. (ATH-T) to “hold” from “buy” with a $12 target, down from $13. The average is $12.44.

* RBC’s Irene Nattel cut her Canada Packers Inc. (CPKR-T) target to $20 from $22 with a “sector perform” rating. The average is $20.50.

“Trimming H2/26 estimates to reflect stronger than expected spread compression through Q3, with rising corn prices an incremental headwind to Q4 vertically integrated spread, if sustained,” she said. “Moderating 2027E EBITDA by 4 per cent to $172-million. Despite the gyrations of commodity markets, CPKR is executing its capital-light opportunity to close a capacity utilization gap, reduce leverage, and return capital to shareholders by way of a dividend with an attractive current annualized yield of 6.7 per cent, our analysis indicates dividend should be sustainable.”

* In a note titled Valuation Over-Discounting Soft Near-Term Outlook, TD Cowen’s Graham Ryding reduced his Element Fleet Management Ltd. (EFN-T) target to $31 from $38 with a “buy” rating. The average is $36.78.

“During recent conferences management flagged that macro headwinds (higher rates, fuel, and vehicle inflation) were delaying (not canceling) client demand for renewals,” said Mr. Ryding. “We still believe Element can meet 2026 guidance, but we are now at the lower end across most metrics (albeit we model originations of $6.3-billion; down from $6.4-billion previously and below guidance of $6.5-$6.7-billion). Our revised 12-month target price of $31 (from $38) implies a forward P/E multiple of 13.2 times (down from 16.2 times previously to reflect the cautious near-term outlook).

“We view recent management changes on the commercial side as an indication that improving VUM growth/originations, and services penetration, are priorities. ... That said, improved execution may not be visible until 2027. We model 2027 revenue growth to be at the low end of Element’s medium-term target (6 per cent year-over-year vs. 7 per cent previously), and originations growth of 4 per cent (soft 2026 comparable).”

* TD Cowen’s Derick Ma resumed coverage of Faraday Copper Corp. (FDY-T) with a “buy” rating and $7 target, up from $5.50 previously. The average is $8.50.

“The newly combined Redhawk Copper complex improves development optionality, in our view, resulting in multiple potential sources of open pit oxide and sulphide ore, increased access to private lands and a deferral of underground development,” said Mr. Ma. “FDY is targeting an updated mineral resource estimate by mid-2027 and a pre-feasibility study in 2028.”