Thursday’s analyst upgrades and downgrades

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

A “massive” second-quarter beat “further justifies” Shopify Inc.’s (SHOP-Q, SHOP-T) bull case on artificial intelligence, according to Citi analyst Tyler Radke.

“Shopify delivered a remarkable 2Q26 beat, with revenue growth accelerating to a post-ZIRP [zero interest-rate period] high of 33-per-cent year-over-year cc (and a 5-pointt beat), and significant FCF + revenue revisions,” he said in a client note.

“The quarter strengthened the AI bull case. Shopify new merchant acquisition is accelerating driven by a new entrepreneurial cycle, with increasing competitive tailwinds fueling faster up-market share gains. Shopify also appears to command a leadership position in Agentic commerce with AI traffic/orders tripled year-over-year in Q2, while internal usage of AI is helping drive improved margins and FCF. We continue to see Shopify as a durable compounder and the results only further add to our confidence and increase the speed of share gains in our estimates. We raise FY26 revenue and FCF estimates.”

TSX-listed shares of the Ottawa-based e-commerce giant jumped 16.5 per cent on Wednesday after it reported quarterly revenue of US$3.58-billion, a gain of 33 per cent and blowing past the expectations of Mr. Radke (US$3.46-billion) and the Street (US$3.446-billion). Gross merchandise volume increased 32 per cent to US$115.6-billion, also above forecasts (US$111.8-billion and US$111.9-billion, respectively).

“AI-driven traffic and orders tripled, AI orders converted nearly 80 per cent better than organic search, and 75 per cent of AI-attributed orders came from outside the top 100 categories, supporting potential long-tail merchant discovery,” noted Mr. Radke.

“Shopify expects 3Q26 revenue growth in the low-30s, versus prior CitiE/consensus of approximately 28 per cent/27 per cent, supporting our revised 32.5 per cent year-over-year estimate and only modest deceleration from 2Q. Gross-profit dollars are guided to grow in the mid-to-high-20s year-over-year, with the revenue/GP differential driven by continued Merchant Solutions and payments mix. GAAP OpEx is expected at 33-34 per cent of revenue with $150-million of SBC, supporting an approximate 29.5 per cent non-GAAP OpEx ratio. FCF margin guidance of high-teens to low-20s was the standout despite modestly lower operating margin and includes less than 1pt of benefit from merchant-cash-advance accounting. We expect management to maintain flat-to-down headcount and strict limits on marketing spending to allow for the prioritization of AI product velocity and international expansion.”

Citing “continued strong execution,” Mr. Radke raised his expectations for the remainder of Shopify’s fiscal year, leading him to increase his target for its shares to US$196 from US$150 with a “buy” rating (unchanged). The average target on the Street is US$150.25.

“Our confidence is underpinned by continued commerce share gains internationally, offline and upmarket. Our deep-dive analysis into SHOP’s Merchant Solutions business gives us confidence in SHOP’s long-term growth as we expect take-rate expansion to accelerate in 2025+, fueled by increasing payments penetration as well as new product/feature adoption,” he added.

Elsewhere, other analysts making target revisions include:

* RBC’s Paul Treiber to US$180 from US$170 with an “outperform” rating.

“Shopify’s shares are materially rallying today following stronger-than-expected Q2 results and Q3 guidance. The quarter shows that Shopify is gaining market share as a result of its AI innovations, while AI token costs are not having a material impact on profitability. We believe Shopify’s valuation may re-rate higher as the market increasingly views the company

as an AI winner," said Mr. Treiber.

* National Bank’s Doug Taylor to US$180 from US$155 with an “outperform” rating.

“How it impacts NBCCM view: Model roll, higher growth, higher margins and a rebound in general software sentiment all argue for multiple expansion to what is already a well-deserved premium multiple. ... Shopify should remain a core holding within the tech universe,” said Mr. Taylor.

* JP Morgan’s Bryan Smilek to US$185 from US$155 with an “overweight” rating.

* Evercore ISI’s Mark Mahaney to US$175 from US$135 with an “outperform” rating.

RBC Dominion Securities analyst Drew McReynolds sees Thomson Reuters Corp. (TRI-Q, TRI-T) “finding some escape velocity” as the “broader AI disruption narrative continues to evolve.”

“We see the potential to narrow what looks to be a notable public market valuation discount to intrinsic value under the majority of tail risk/terminal growth scenarios associated with agentic AI,” he said in a client report released before the bell titled Executing in an Environment Demanding Execution.

“With valuation in our view now better reflecting the growth and risk profile of the stock following the pullback over the past year: (i) on the growth front, we maintain our conviction levels on the ability for Thomson Reuters to sustain its competitive position within legal and tax verticals over the next 3 years driven by agentic AI with our forecast translating to a 2025-2029E NAV CAGR [net asset value compound annual growth rate] of 13 per cent; (ii) on the risk front, this double-digit NAV CAGR underpinned by annual margin expansion is capable of absorbing 1.5 times points of additional annual EV/ EBITDA multiple compression over this period before annual total returns would turn negative; and (iii) with $9B in excess balance sheet capacity through 2028, we see ongoing share repurchases in the absence of further M&A.”

TSX-listed shares of the information and software company fell 10.2 per cent on Wednesday amid linger unease about potential disruption brought by AI on the software, despite Thomson Reuters reporting quarterly revenue increased 9 per cent to US$1.95-billion in the second quarter, and 10 per cent in the company’s three core divisions serving legal, tax and accounting, and corporate customers. On an adjusted basis, it said it earned 99 US cents a share, which beat analysts’ consensus estimate of 96 US cents a share.

The Toronto-based company also raised its full-year organic revenue forecast to around 8%, from ​a previous range of 7.5 per cent to 8 per cent.

While investors remain concerned, Mr. McReynolds said he expects “an easing of the AI disruption narrative with some disconnection.”

“We expect a broader AI disruption narrative to persist assuming LLM/frontier model capabilities continue to improve and the competitive environment intensifies,” he explained. “Against this backdrop, we believe the AI disruption narrative has directionally eased since early 2026 with Thomson Reuters seeing some disconnection from this narrative, in part reflecting: (i) the prospect of frontier LLMs facing increased competition from vastly improved open source models and increased regulation in the U.S.; (ii) the growing ability for LLM optimization; (iii) Thomson Reuters’ proprietary LLM that in its first version is delivering outcomes comparable to, or better than, the frontier LLMs with lower latency at lower cost; (iv) the August 2026 broad commercial launch of the next generation of CoCounsel Legal that with true agentic AI capabilities management believes is delivering superior workflow automation (accuracy, speed, breadth, transparency) blurring the lines between legal workflows and advanced legal analytics/ deep research; (v) the fall commercial launch of a next generation CoCounsel for Tax, Audit & Accounting Professionals also with true agentic capabilities; and (vi) the confirmation by management that endmarkets are beginning to retool for AI-driven workflow automation with technology providers now benefiting from an increased ‘share of wallet’”

Maintaining his “outperform” rating for its shares, Mr. McReynolds bumped his target to US$124 from US$121. The average is

Woodbridge Co. Ltd., the Thomson family holding company and controlling shareholder of Thomson Reuters, also owns The Globe and Mail.

Other analyst adjustments include:

* National Bank’s Adam Shine to $180 (Canadian) from $171 with an “outperform” rating.

While the quarterly results from Brookfield Asset Management Ltd. (BAM-N, BAM-T) largely fell in line with expectations, National Bank Financial analyst Jaeme Gloyn saw it as “a very solid” performance, emphasizing fee-related earnings per share jumped 20 per cent year-over-year and distributable earnings rising 17 per cent.

“We remain confident in valuation upside as strong fundraising appears set to continue (including the massive AI and retail wealth tailwinds), upside from carried interest is pulled forward, potential S&P 500 index inclusion, and industry headwinds related to private credit fade,” he said. “BAM currently trades at approximately 25 times consensus NTM [next 12-month] earnings, well off peaks in the mid-30s.”

Before the bell on Wednesday, the company said distributable earnings – a measure it uses as a proxy for cash earnings that could be paid to shareholders – came in at 44 US cents, matching Mr. Gloyn’s estimate and a penny above the Street’s forecast. Fee-related earnings per share of 50 US cents matched projections.

“Management kept a confident tone on fundraising, expecting 2026 to be a record year even excluding insurance acquisitions,” the analyst said. “While it will be difficult for 2027 to exceed 2026, the outlook remains positive with launches of real estate and Oaktree flagships, and into 2028 with Energy flagship launch (all of which are ahead of initial planned launches). Carried interest is also now expected to come earlier than initially expected. Stronger investment performance is pulling some of the larger carry from later in the decade to the next couple of years.”

“AI infrastructure remains one of the largest growth themes. The Bloom Energy partnership (expanded 5x times, Kentucky AI campus with the U.S. Department of Energy, and partnerships with NVIDIA and OpenAI demonstrate BAM is an integral partner in building the vast AI demand requirements.”

With a “slight” bump to estimates, Mr. Gloyn raised his target for Brookfield shares to US$70 from US$69, keeping an “outperform” rating. The average target on the Street is US$57.03.

“We see BAM as a high-quality, capital-light, long-term earnings and dividend compounder,” he concluded. “We believe BAM is well positioned to capitalize on secular trends based on: i) the rapid growth of alternative assets, ii) significant exposure to in-demand asset classes and iii) manager consolidation. Moreover, its strong investing track record increases our confidence that BAM can deliver rapid growth in line with its targets (FBC, FRE, DE CAGR of at least in the high teens through 2030). Additionally, we see potential for lower rates and an improved capital markets backdrop to drive accelerated fundraising, monetization, carried interest realization and, ultimately, a higher valuation for BAM.”

After a second-quarter beat, RBC Dominion Securities analyst James McGarragle reaffirmed Chorus Aviation Inc. (CHR-T) as his “best idea.”

“Q2 results came in well ahead and commentary from the conference call pointed to EBITDA above the top end of management’s guidance range, which is where our estimates now sit (although management conservatively left guidance unchanged),” he said. “Commentary on the M&A pipeline quality and defense opportunities was also encouraging, which we see as meaningful upside to our out-year estimates. Continue to flag Chorus as a compelling value opportunity with significant growth catalysts not yet reflected in our mid-teens 2029 FCF yield estimate.”

Shares of the Halifax-based company soared 9.2 per cent on Thursday following the premarket quarterly release, which included revenue of $349.4-million that topped the estimates of both Mr. McGarragle and the Street ($332.9-million and $329.3-million, respectively. Adjusted earnings per share jumped 39.8 per cent year-over-year to 83 cents, also exceeding projections (60 cents and 53 cents).

“2026 EBITDA guidance of $170-185-million was unchanged despite the Q2 beat and management noting they are not expecting any big step down in EBITDA during the remainder of the year,” said Mr. McGarragle. “Key is that this implies 2026 EBITDA well above the top end of the guidance range, which we now reflect in our updated estimates. Our 2026E EBITDA increases to $191-million (from $182-million), well above consensus $180-million coming into the quarter.

“Longer-term outlook remains compelling. Defense revenue grew 15 per cent year-over-year with management highlighting numerous active opportunities, including the Flex Rotor RPAS purchase from Airbus and the MOU with 49North/MDA on ISR solutions, and that they are hoping to ‘keep that pace and maybe accelerate it’. On M&A, management emphasized optionality, with the flexible capital allocation bucket to M&A still undeployed and borrowing capacity intact. The capital allocation framework through 2029 remains on track, with $14.8-million in share repurchases highlighting early progress. We continue to view Chorus’ strong balance sheet and ample liquidity as positioning it well to pursue accretive acquisitions and return capital to shareholders.”

Also believing the integration and optimistic growth expectations for Kadex Aero Supply Ltd., which was acquired for $50-million earlier this year, “validates” and provides “a proof point” for Chorus’ M&A strategy, Mr. McGarragle raised his target for its shares to $39 from $35, keeping an “outperform” rating, after increasing his 2026 forecast and emphasizing “recent trends are sustainable.” The average on the Street is $31.14.

Ahead of the release of second-quarter results from Canadian Tire Corp. Ltd. (CTC.A-T) on Aug. 13, National Bank Financial analyst Vishal Shreedhar warned of “uneven operating performance and ongoing disruption related to the implementation of the True North strategy” and sees “more attractive opportunities elsewhere” in the retail sector.

Mr. Shreedhar is now projecting earnings per share of $4.10, exceeding the Street’s expectation of $3.96 and up from $3.57 during the same period a year ago. He attributes the 15-per-cent year-over-year gain to “revenue growth (positive sssg across all banners), Retail gross margin (excl. petroleum) expansion, SG&A leverage, share repurchases, lower interest expense, slightly higher Financial EBT and a lower tax rate, partly offset by lower other income, and higher D&A.”

“We model Q2/26 estimated [Canadian Tire Retail same-store sales growth] to be tepid, reflecting a tough comparable base (Q2/25 was 6.4 per cent; benefited from patriotic purchasing, etc.), subdued consumer environment and the lowering of prices across several products (lowered for thousands of products in Q1/26 to enhance value proposition),” he said. “Further, we expect CTR revenue to be impacted by dealer de-stocking.

“NBCCM models Retail EBITDA margin expansion of 10 basis points year-over-year, reflecting gross margin (excl. petroleum, including D&A) expansion of 40 basis points year-over-year (targeted promotions and favourable mix, partly offset by higher freight costs) and SG&A (excl. petroleum, excluding D&A) leverage of 50 basis points year-over-year (efficiency), partly offset by lower other income.”

Maintaining his “sector perform” rating for Canadian Tire shares, Mr. Shreedhar raised his target to $210 from $205 reflecting a roll-forward in his valuation period, “partly offset by slightly lower estimates.” The average is $211.25.

In other analyst actions:

* TD Cowen’s Kasia Trzaski Kopytek increased her Adentra Inc. (ADEN-T) target to $46 from $43, maintaining a “buy” rating. The average target on the Street is $49.40.

“Q2 results reinforce our constructive investment stance, reflecting steady execution in a soft market backdrop and ongoing cost discipline. Management’s Q3 outlook was constructive, highlighting 3-per-cent year-over-year sales growth in July. A small tuck-in acquisition completed post-quarter is consistent with ADEN’s stated growth strategy. Raising target price to C$46.00 on a higher earnings outlook,” said Ms. Kopytek.

* National Bank’s Baltej Sidhu lowered his target for Ballard Power Systems Inc. (BDLP-Q, BLDP-T) to US$4.50 from US$4.75 with a “sector perform” rating. The average on the Street is US$3.77.

“BLDP continues to execute, with greater margins, improving backlog and the GeoPura platform enhancing its long-term growth profile and recurring revenue mix. We believe the combination strengthens BLDP’s path toward profitability by the end of 2027 while expanding its addressable market into hydrogen-powered energy-as-a-service. On account of estimate revisions, we lower our target,” said Mr. Sidhu.

* Ventum’s George Doumet lowered his Canadian Packers Inc. (CPKR-T) target to $21.50, falling below the $22.30 average, from $24, keeping a “buy” rating.

“Despite the share price reaction, Q2 did little to alter our investment thesis,” said Mr. Doumet. “While volume growth came in below expectations, we view the shortfall as largely timing-related and expect easier second-half comparisons to support a return to the Company’s normal 2–3-per-cent growth cadence. More importantly, CPKR again delivered exceptional free cash flow generation, with conversion of approximately 65 per cent, despite EBITDA margins landing at the low-end of management’s 8–12-per-cent target range. We expect margins to improve quarter-over-quarter, but remain at the low end of the company’s stated range. In our view, the next leg of share price performance will be driven less by quarterly earnings beats and more by investors getting comfort around the sustainability of FCF generation and the predictability of 2-3-per-cent annual volume growth.”

* National Bank’s Matt Kornack moved his Dream Industrial REIT (DIR.UN-T) target to $16.75 from $16.25 with an “outperform” rating. Other changes include: Desjardins Securities’ Kyle Stanley to $16 from $15.50 with a “buy” rating and TD Cowen’s Sam Damiani to $16 from $15.50 with a “buy” rating. The average is $15.88.

“Q2 was ahead of our expectations on the back of stronger organic performance (year-over-year occupancy gains in Canada plus sustained execution on MTM [mark-to-market] capture with strong imbedded annual rent steps) and timing related to disposition/acquisition activity. The latter will normalize into Q3, although the REIT has capacity to acquire more assets and is achieving attractive going-in cap rates, with further MTM potential. Near term the Chancerygate portfolio will be neutral but additive once stabilized (2027/2028). Growth in FFO combined with balance sheet capacity prompted a 2.5-per-cent distribution increase with an improved outlook for 2026 earnings,” said Mr. Kornack.

* Desjardins Securities’ Doug Young increased his IA Financial Corp. (IAG-T) target to $220 from $205 with a “hold” rating, while RBC’s Darko Mihelic hiked his target to $213 from $167 with a “sector perform” rating. The average is $181.88.

“IAG’s Q2/26 results were above our estimate, helped by insurance experience gains and credit experience. In any given quarter insurance experience or macro can help/hurt results. We think IAG continues to grow a solid franchise in Canada (particularly wealth) while building a U.S. operation (with some bumps along the way). In our view, under good market conditions, IAG’s core EPS growth will be double-digit, core ROE will improve to 19 per cent and this outlook should be rewarded with a solid valuation multiple.,” said Mr. Mihelic.

* Barclays’ Alex Scott raised his Manulife Financial Corp. (MFC-T) to $59 from $56, keeping an “equal weight” rating, while TD Cowen’s Mario Mendonca moved his target to $67 from $65 with a “buy” rating. The average is $62.46.

“Results were in line, with Asia, U.S. and GWAM delivering good growth, offset by weaker results in Canada. Earnings quality was good, reflecting public markets gains. Asia delivered good new business CSM, WM EBITDA margins improved 110 basis points year-over-year, and MFC continued to buy back stock - key drivers of the 18-per-cent ROE target. New business recovered strongly in Asia, and GWAM net flows turned positive,” said Mr. Mendonca.

* Desjardins Securities’ Lorne Kalmar moved his RioCan REIT (REI.UN-T) target to $25 from $24, exceeding the $23.83 average, with a “buy” rating.

“2Q results were in line and accompanied by a bump in 2026 SP NOI guidance. The gap between FFOPU and core FFOPU was immaterial, and its capital-recycling program is nearing completion as REI continues to successfully execute on its business simplification strategy. Strength of retail fundamentals are in focus and show no signs of abating. Occupancy sits at 99 per cent and rent spreads remain above 20 per cent. This should drive SP NOI growth at or above the top end of management’s three-year target range (3.5 per cent plus),” said Mr. Kalmar.

* National Bank’s Patrick Kenny reduced his Rockpoint Gas Storage Inc. (RGSI-T) target by $1 to $34, exceeding the $32.47 average, with an “outperform” rating.

“Rockpoint reported fQ1/27 adj. EBITDA of US$75-million (NBCCM: US$76-million; Street: US$74-million), with slightly stronger Short-Term-Storage (STS) contributions and lower G&A, offset by seasonally soft Optimization margins, in part owing to timing differences associated with inventories carried over from the prior period.”

“Overall, with modest changes to our estimates, our target remains largely intact ... and combined with an attractive 8.9 times fiscal 2028 estimated EV/EBITDA valuation (Midstream peers: 12.3 times) coupled with North American energy security tailwinds creating a favourable backdrop for future growth/contracting opportunities, we reiterate our OP rating.”

* TD Cowen’s Jonathan Kelcher increased his Sienna Senior Living Inc. (SIA-T) target by $1 to $28, exceeding the $26.09 average, with a “buy” rating, while National Bank’s Giuliano Thornhill raised his target to $28.50 from $27.50 with an “outperform” rating. The average is

“The Fierra JV should help accelerate SIA’s development program with little additional equity contribution needed while the balance sheet remains primed for acquisitions. Internal growth will come from occupancy gains/rental rate growth/margin expansion on the retirement side and near term above trend NOI growth from the LTC portfolio,” said Mr. Kelcher.

* Despite “strong” second-quarter results, driven by the IPO of SpaceX which represents 37.75 per cent of its portfolio, Ventum’s Rob Goff lowered his Stack Capital Group Inc. (STCK-T) target to $28.50 from $31 with a “buy” rating. The average is $31.38.

“We see a very attractive buying window given the decline in STCK shares,” said Mr. Goff. “STCK shares reached a peak of $38.72 in May, a few weeks before SpaceX’s US$75-billion IPO on June 12 for US$135/shr and an implied valuation of $1.75-trillion. Stack Capital shares are down 24 per cent or $5.92 per share from their trading levels at the time SpaceX shares hit their highs of US$225.64 on June 16th of US$38.72,with the SpaceX decline representing an implied decline of $7.01 per STCK share. At the peak share price for SpaceX, the non-SpaceX assets were valued at $17.46 vs their current valuation at $12.30. We note marking SpaceX to market reduces the Company’s Q2/26 NAV/book value by $1.97 to $18.24.”

“We maintain STCK as a conviction BUY given its stewardship capabilities and structural advantages as a liquid, publicly listed vehicle that offers exposure to the steep value-creation curve of marquee, private technology businesses within a focused portfolio. We highlight Stack’s compelling thematic exposure with its Q2/26 BVPS/NAV mix: AI & Infrastructure at 35 per cent (Coreweave, OpenAI, Databricks, Crusoe Energy, FluidStack, Prometheus); Robotics & Defense at 44 per cent (SpaceX, Locus Robotics, Shield AI).”

* Desjardins Securities’ Jerome Dubreuil increased his target for Topicus.com Inc. (TOI-T) to $145 from $140 with a “buy” rating, while RBC’s Paul Treiber cut his target to $145 from $150 with an “outperform” rating. The average target is $145.60.

“TOI’s stock has rebounded by 26 per cent (vs 10 per cent for the S&P/TSX) since this year’s lows and we are seeing signs of improving sentiment on software names. Meanwhile, fundamentals remain intact at TOI and we believe it could be a large beneficiary of a rotation from more expensive tech stocks. However, we believe the lapping of the large Cipal Schaubroeck acquisition could lead to slower revenue growth next quarter and we prefer CSU and LMN at this time,” said Mr. Dubreuil.

* RBC’s Walter Spracklin increased his Westshore Terminals Investment Corp. (WTE-T) target to $44 from $42, which is the average, with an “outperform” rating.

" Overall, we characterize Q2 as constructive, as results came in ahead on better-than-expected pricing, and view management’s raised 2026 loading rate and throughput guidance positively. Looking ahead, we expect pricing strength to be sustained reflecting Westshore’s limited capacity coupled with a healthy demand backdrop, with Grassy Mountain and Vista representing drivers of potential upside. We therefore see pricing as a key pillar to our favourable investment thesis," said Mr. Spracklin.