Wednesday’s analyst upgrades and downgrades

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

In response to a “significant” cut to its 2027 copper guidance along with a “reset” of the medium-term outlook, TD Cowen analyst Craig Hutchison downgraded Ivanhoe Mines Ltd. (IVN-T) to “hold” from a “buy” rating previously.

“The latest guidance cut calls into question the path forward to return to a productive capacity of 500ktpa, in our view, which now requires a Phase 4 expansion,” he said. “The magnitude of the reset warrants taking a more cautious stance on the shares, we believe.”

Alongside Tuesday’s post-market release of its third-quarter results, Ivanhoe reduced its short-term production guidance for its flagship Kamoa-Kakula copper complex in the Democratic Republic of the Congo. It now expects 2027 production of300,000 to 350,000 tonnes of copper, falling from prior expectations of 380,000 to 420,000 tonnes.

“A slower than expected ramp in 2027 was partially to blame including a delay in the start of stoping on the Eastern side of Kakula from Q4/27 to late Q1/28 and a reduction in the estimated maximum mining rate at Kakula,” said Mr. Hutchison. “Cost guidance for 2027 was increased to $2.50-$3.00/lb from previously $2.10-$2.50/lb.

“More concerning, in our view, the recent in-fill drilling campaigns and engineering trade-off studies now suggest that the maximum productive capacity of Phases 1-3 has been reduced to 400-450kt from 500kt. This suggests to us that grades may not have been reconciling against the previous resource models and underground costs may be more prohibitive given hydrological conditions. The company plans to integrate open-pit material from Kamoa starting in H2/27 to displace higher-grade underground material from Kakula.”

The analyst emphasized the miner’s path back to 500,000 tons of annual production has “become longer, more capital intensive and more dependent on future execution.”

“A return toward 500ktpa — essentially the production levels prior to the seismic event in early 2025 — now requires the proposed Phase 4 expansion, which was previously expected to be an incremental addition to production,” he explained. “With detailed engineering only beginning in Q1/27 and construction expected to take 18-24 months following approval, we see considerably less visibility on the medium-term production trajectory than we did previously. Furthermore, the capital intensity of Phase 4 is expected to be in the range of $9,000-$12,000/t, or $1-billion to return to the previously targeted levels. Cash costs are expected to trend lower than $2.50/lb prior to a potential Phase 4 expansion.”

His target for Ivanhoe shares dropped to $9 from $14. The average is $15.18.

TD Cowen analyst Patrick Sullivan thinks Wajax Corp. (WJX-T) is “entering a potential Canadian capital-investment upcycle with meaningful exposure to the regions/end markets where early nation-building activity is concentrated.”

“A healthy backlog, solid balance sheet, and improved cost structure support operating leverage ahead of a demand upcycle in 2027+ and a higher valuation multiple,” he added.

Given that bullish view, Mr. Sullivan raised his rating for the Toronto-based industrial products and services company to “buy” from “hold” previously, calling it a “pure play on Canada’s capital investment upswing.”

“We believe the market is finally looking beyond near-term earnings volatility and factoring in a Canadian investment upcycle, supporting a higher valuation multiple,” he added. “Following an earnings print that would normally have sent WJX shares down double-digits, the stock showed resilience, finishing down only 3 per cent after opening down 11 per cent. We see this as evidence that investors are taking a longer-term view of WJX, factoring in its potential to benefit from a Canadian investment upcycle in 2027 and beyond. We believe this supports a higher valuation multiple and have increased ours to 11.5 times from 10 times. In conjunction with rolling our valuation period forward one quarter, our new valuation multiple increases our target price to $41.

“Initial nation-building activity indexed to western Canada should present opportunities for WJX to win incremental equipment, industrial parts and ERS business. More than 50 per cent of WJX’s end-market exposure is tied to oil sands/oil and gas (17 per cent), mining (16 per cent), construction (15 per cent), and government/utilities (6 per cent), and 45 per cent of revenue is derived in western Canada. The greatest momentum for project approvals appears to be focused in this region supported by energy, transmission, and mining projects. We believe the Build Canada Strong Act, Productivity Mega Deduction, and recent B.C. election results foster a more supportive investment climate for WJX’s equipment, industrial parts, and ERS businesses.”

While upgrading Wajax shares, Mr. Sullivan did acknowledge his forecast for the company “remain conservative.”

“We currently model what we see as very modest, low-single-digit, topline growth through 2027/2028, and think potential upside could arise from faster project approvals translating into earlier mining, energy, port, infrastructure construction and accelerating equipment orders as customers utilize immediate expensing provisions,” he said. “Near-term earnings remain supported by a near-record backlog of $599-million which saw growth across construction/forestry and IP/ERS, with management indicating that quoting activity remains solid across several end-markets.”

His new target of $41, up from $36, is higher than the average on the Street of $39.

TD Cowen analyst Derek Lessard sees Organigram Global Inc.’s (OGI-T) $561-million offer for Aurora Cannabis Inc. (ACB-T) as “compelling” and recommends investors tender their shares.

That led him to move his rating for Edmonton-based Aurora to “sell” from “buy” previously.

“In our view, Organigram offers a potentially cleaner path to value realization than Curaleaf (CURA, not covered) despite a similar headline price: cash up front, less balance-sheet risk on the equity portion, and a combination linking Aurora’s EU-GMP supply with Sanity’s German commercial platform,” said Mr. Lessard.

In a client note, he emphasized the deal brings “greater monetization certainty” with Aurora shareholders having the option to receive $7.80 per share in cash.

“Organigram is essentially debt-free,” he added. “This provides shareholders, who elect stock exposure to the combined company, with both equity upside and less financing uncertainty.

“A complementary fit, especially in Germany. Aurora brings EU-GMP expertise and consistent medical supply, while Sanity adds branding, patient acquisition, and pharmacy/ telemedicine relationships. Organigram management acknowledged EU-GMP supply constraints, so this deal should address a bottleneck. $50mm of synergies go beyond cost cuts. Beyond public-company costs and overlapping SG&A, opportunities include better German supply, adding Organigram products to Aurora’s Canadian medical platform, and applying Aurora’s EU-GMP expertise to Organigram’s facilities.”

Also noting the deal provides access to a broader international medical platform and the appeal of British American Tobacco (BAT) backing through its partial funding, he moved his target for Aurora shares to $7.80 from $8 to reflect the offer. The average on the Street is $5.66.

“We believe the broader Canadian cannabis read-through is also positive,” Mr. Lessard added. “As we’ve noted, this deal could spur further consolidation, particularly around strong cultivation assets and healthy balance sheets. Those that made tough choices early look well-positioned. The takeout multiple is 17 times our fiscal 2028 EBITDA estimate.”

Ventum Capital analyst Daniel Lavoie has reaffirmed his “positive outlook” for 5N Plus Inc. (VNP-T) following “strong” third-quarter results and a conference call with management that focused on its 2026 financial guidance that he continues to view as “conservative.”

“We believe Q3/26 results should alleviate investor concerns surrounding margin pressures, with adjusted gross margin expanding 110 basis points quarter-over-quarter to 31.4 per cent,” he explained. “Recall that following Q2/26, operating inefficiencies and cost inflation weighed on margins. Management confirmed that most operational issues have been addressed, with stronger volumes and economies of scale driving the sequential improvement. While commodity inflation remains a headwind, additional contractual cost pass-throughs, expected to be substantially completed by mid-2027, should support further margin recovery.

“Looking Beyond 2026: Multiple Growth Drivers. Management’s commentary was particularly encouraging, with contracted terrestrial renewable energy volumes continuing to grow through 2027 and 2028, improving demand in medical imaging, and emerging opportunities in sensing and specialty metals, including germanium processing. CdSe for First Solar should contribute more meaningfully in H2/27. In Performance Materials, management also highlighted potential market-share gains following the loss of GMP certification by its closest competitor in health and pharmaceutical bismuth products.”

Shares of the Montreal-based producer of specialty semiconductors and performance materials soared 24.7 per cent on Tuesday after it reported revenue jumped 30 per cent year-over-year and 11 per cent quarter-over-quarter to $136.4-million, topping Mr. Lavoie’s estimate by 9.6 per cent and consensus by 11.1 per cent. Adjusted EBITDA rose to a record $31.1-million (up 7 per cent and 17 per cent, respectively) and also topped forecasts (by 11.8 per cent and consensus by 17.2 per cent).

“We are increasing our 2026 revenue and adjusted EBITDA estimates to $502-million and $112.4-million, respectively (from $487-million and $109.4-million), above management’s $100–105-million EBITDA guidance. Our forecasts imply Q4/26 revenue of approximately $125-million and adjusted EBITDA of $25.6-million, below the record $31.1-million reported in Q3.”

Maintaining a “buy” rating for 5N Plus shares, Mr. Lavoie raised his target by $1 to $45.

“Strong execution, improving operating leverage, and an increasingly diversified set of growth opportunities reinforce our long-term investment thesis,” he said.

Elsewhere, other analysts making target adjustments include:

* Desjardins Securities’ Frederic Tremblay to $46 from $45 with a “buy” rating.

“3Q26 revenue and sequential margin improvement were ahead of expectations. While 2026 guidance still leaves room for upside, our focus increasingly shifts to the next leg of growth. Approximately two-thirds of VNP’s revenue base benefits from strong multi-year growth visibility through First Solar and AZUR, while several potentially meaningful organic opportunities remain within reach across IRIS/European space, U.S. defence and medical imaging,” said Mr. Tremblay.

* Scotia’s Jonathan Goldman to $39 from $37 with a “sector outperform” rating.

“Post-3Q results we see the earnings trajectory higher for longer,” said Mr. Goldman. “Main incremental data points were: (1) margins recovering from 2Q lows with pass-throughs on track to restore price/cost spread by 2H27; (2) revenue exceeding elevated expectations with continued momentum i.e., up 25 per cent to 30 per cent this year per management; and (3) bullish commentary around space pipeline stretching into 2030 with the company currently evaluating another capacity expansion (on top of the 35-per-cent increase in 2025, 30-per-cent increase in 2026, and 25-per-cent increase coming online in 2027). Specialty Semiconductors backlog is/has been maxed out at 365 days of annualized revenue, a level that historically signaled another capacity expansion. There were few questions on defense, but that is a large source of upside.”

“We raised our estimates and sit modestly above the high-end of guidance. Admittedly that incorporates a good deal of conservatism: the guide implies 4Q EBITDA margins of 15 per cent, or down 800 basis points quarter-over-quarter, whereas flat is a more reasonable base case, in our view. VNP shares trade at 16 times EV/EBITDA on our 2027E, which is not expensive in the context of durable secular trends supporting a long runway for mid-teens earnings growth; upside to guidance and forward estimates; and a still underappreciated pivot to higher margin downstream operations.”

In a client report titled Earnings Can Do the Heavy Lifting, Scotia Capital analyst Jonathan Goldman said he continues to view Toromont Industries Ltd. (TIH-T) with “a positive risk/reward bias” in the wake of its third-quarter earnings report, pointing to potential increasing return potential from its 60-per-cent controlling stake in AVL Manufacturing Inc., a Hamilton, Ontario–based designer and fabricator of power generation and storage enclosures.

“Either you believe the AI build out has a long runway and ascribe a multiple to AVL comparable to AI infra plays in the mid-20s P/E – and a decent premium for legacy given strong fundamentals that were further reinforced by the 3Q print (i.e., commodity backdrop, improving construction, early stages product support cycle, technician adds, Build Canada greenshoots, and B/S net cash) – to arrive at a share price in the mid-$240s,” he said.

“Or you don’t believe in AI and value AVL as a declining perpetuity, we estimate $50/share (assuming AVL doesn’t surprise to the upside again!) – and $150/share for legacy using a modest 10-per-cent premium to historicals – to arrive at a share price in the low-$200s, or close to where shares are trading today. Alternatively, use 22.5 times P/E, a 3.5-times premium to CAT-US [Caterpillar Inc.], in-line with historicals, to get $215/share. With CAT shares trading 40 per cent below 52-week highs, we think it’s a good anchoring point for AI valuation reset.

Shares of Toromont jumped 8.5 per cent on Tuesday after it reported third-quarter EBIT and earnings per share of $279.3-million and $2.35, respectively, topping the Street’s forecast by 17 per cent and 11 per cent, respectively ($239.2-million and $2.11). The beat was driven by better-than-anticipated revenue and margin performance.

“We estimate EPS would have beat by 18 per cent excluding one-timers related to AVL purchase commitment expenses and amortization of acquisition-related intangibles (reported $0.19 negative impact) and excluding the M2M adjustment on DSUs [deferred share units] (estimated $0.06 positive impact),” said Mr. Goldman. “Equipment Group revenues 6 per cent ahead of consensus and up 26 per cent year-over-year including new equipment ex-AVL up 22 per cent year-over-year with ‘improved construction activity’ (i.e., the end-market that has been lagging) and product support up 14 per cent year-over-year on accelerating two-year stack.

“AVL revenues $220 million continued to exceed our estimates demonstrating either a quicker ramp at Charlotte or higher than expected capacity (TBD).”

With his “sector outperform” rating for Toromont shares, Mr. Goldman raised his target to $244 from $239. The average on the Street is $253.22.

“While we acknowledge limited room for multiple expansion, double-digits earnings growth through 2027 at least (with upside potential) should be enough to support commensurate unit price returns,” he added.

Elsewhere, CIBC analyst Krista Friesen upgraded Toromont to “outperformer” from “neutral” with a $256 target.

Analysts making target revisions include:

* National Bank’s Maxim Sytchev to $254 from $261 with an “outperform” rating.

“We have no idea how long the data centre buildout will persist (management is seeing strong demand as far as 2029E) as access to funding/power, ROI, pushback from the people living in the vicinity of these projects, etc. are real considerations, but it is encouraging to see the core ex-AVL business operating strongly (same goes for PS inflecting),” said Mr. Sytchev. “AVL contributed 13.7 per cent of top line to Q3/26; on an annualized run-rate basis (and depending on a multitude of assumptions), we suspect AVL could contribute 20 per cent to 25 per cent to TIH EPS in 2027. The question remains regarding this vertical’s sustainability and ultimately terminal values. We therefore need to balance that dynamic against an objectively stronger core performance (and ahead of a generational level of spending in Canadian infrastructure). As CAT shares have seen a multiple compression , we are therefore lowering the target P/E for TIH shares.”

While Desjardins Securities analyst Jerome Dubreuil warns Telesat Corp.’s (TSAT-T) pivot from its legacy geostationary satellite business to low-Earth orbit “comes with material execution, financing and commercial risk,” he also thinks it “creates an opportunity to gain meaningful share in a very large market.”

Emphasizing “the magnitude of the potential upside more than compensates investors for these risks,” he initiated coverage of the Ottawa-based with a “buy” rating on Wednesday.

“We do not believe TSAT needs to compete head-on with Starlink, the dominant player in LEO, on scale or capacity,” said Mr. Dubreuil. “Indeed, Lightspeed (TSAT’s LEO constellation) is positioned toward government, defence and enterprise customers that place greater value on sovereignty, resiliency, network redundancy and contractual service level agreements (SLAs). For example, we believe the recent media reports about Starlink throttling its network in Ukraine highlight the importance of redundancy and/or sovereignty for mission-critical services. The US$1.9b Enhanced Satellite Communications Project-Polar (ESCP-P) program awarded in August also provides an important validation of that point.”

He did acknowledge the potential impact of the company’s looming debt-repayment deadline, calling it an immediate “hurdle” to be monitored by potential investors.

Telesat evaluates alternatives as December deadline to repay debt looms

“TSAT’s balance sheet situation is complex, and we believe the stock reflects significant refinancing risk,” he said. “However, beyond the protection we believe is provided by TSAT’s strategic importance to the government, our estimated enterprise value should comfortably cover debt obligations and Lightspeed investments, while leaving meaningful equity upside. We therefore expect a resolution of the near-term maturities that is satisfactory for all stakeholders, even if an equity issuance is probable. ”

The analyst set a 12-month target of $91 for Telesat shares. The average is $88.14.

“TSAT does not need to hit guidance — the stock still works with a more down-to-Earth forecast,” he said. “Our investment thesis does not require TSAT to achieve its ambitious US$4.9-billion 2032 revenue target. We forecast $3.4-billion of LEO revenue in 2032, less than half of the $6.9-billion company guidance, but our DCF nonetheless supports a $91 target price. Plugging management’s guidance into our model would return an equity value several times higher than our target price. ”

National Bank Financial analyst Dan Payne said International Petroleum Corp. (IPCO-T) is “increasingly rising up [his] depth chart, as a function of the organic catalyst at Blackrod, but also an evolving consolidation theme for similarly styled assets (increasing scarcity of scalable thermal assets)

Accordingly, following the release of in-line third-quarter results, he raised his rating for the Toronto-based company to “outperform” from “sector perform” previously.

“Blackrod remains the key operational highlight, with production ramping and first sales achieved during the quarter, and on track to achieve plateau by late 2027 (30 mbbl/d),” said Mr. Payne. “At present, the asset is producing approximately 10 mbbl/d from 16 well pairs, with rates to type-curve producing in-line to ahead of expectations (positively suggestive of the efficiencies being realized from the resource), with a further 14 to come on stream through YE26 and 10 in 2027 (while a further six have been drilled). As production scales at Blackrod, we expect material operating leverage to cash flow to be realized, with that building free cash to provide a meaningful value catalyst (delivered through the return of capital initiatives), and poise the company for the next stage of value expansion in further phases of development.”

Before the bell on Tuesday, International Petroleum “modestly” increased its full-year guidance, with capital now expected to be $185-million (from $163-million) to ”support modest incremental activity across its portfolio of assets (largely long-term production oriented items), to support unchanged average production of 45.5 mboe/d (midpoint) within the context of solid funding (given rising prices.“

Changes were also made to the company’s Brent forecast (US$95 per barrel from US$80) with its 60-per-cent payout ratio remaining unchanged, which the analyst said implies free cash of 2-3 per cent “to continue to be directed towards its ongoing buyback as leverage organically falls.”

“In association with the update and outlook for a building catalyst at Blackrod (expanding production, increasing operating leverage, FCF and return of capital inflection), paired with an increasingly active transactional landscape with strong valuation metrics being ascribed (accentuating scarcity and value for scalable thermal assets, akin to Blackrod), we are upgrading the stock to Outperform and increasing our target price to $50 (from $47.50),” he said. “Our increased target price is based on a 7 times 2027 EV/DACF target multiple (from prior rounded 6.5-7.0 times) that is in line with recent peer transaction metrics and comparable asset trading metrics.”

The analyst’s new $50 target exceeds the average on the Street of $43.50.

In other analyst actions:

* Following the completion of its acquisition of the remaining 27.5-per-cent interest in subsidiary Aecon Utilities for $320-million, RBC’s Sabahat Khan hiked his Aecon Group Inc. (ARE-T) target to $62 from $53 with a “sector perform” rating. The average is $62.50.

“Overall, this is a directionally positive development for Aecon longer-term as it allows for a simplified capital structure (and business), and positions the company to more directly benefit from the growing demand in the utilities end-market. With the closing complete, Aecon now owns 100 per cent of Aecon Utilities, with no change to pro-forma net debt,” said Mr. Khan.

* Desjardins Securities’ Gary Ho moved his Alaris Equity Partners Income Trust (AD.UN-T) target to $27 from $27.50 with a “buy” rating. The average is $29.54.

“3Q results were mixed,” he said. “Revenue topped 3Q guidance and our estimate, and NDCF [net distributable cash flow] rose 46 per cent year-over-year, but BVPU [book value per unit] fell short, weighed by a $58.9-million unrealized FV loss — 40 per cent from partner-specific adjustments (Sono Bello, Shipyard, DNT) and 60 per cent from rate-driven declines. AD also tempered near-term exit expectations. We look for updates on Sono Bello, 4Q FV recovery (rate decline post-3Q) and the deployment pipeline on the call. ”

* RBC’s Maurice Choy raised his target for Fortis Inc. (FTS-T) to $90 from $89 with a “sector perform” rating. Other changes include: Desjardins Securities’ Brent Stadler to $90 from $85 with a “buy” rating, National Bank’s Patrick Kenny to $84 from $83 with a “sector perform” rating and TD Cowen’s John Mould to $90 from $87 with a “buy” rating.. The average is $80.43.

“While the market foresaw the potential upgrade in Fortis’ rate base CAGR, we believe the magnitude of the increase to 7.5 per cent (up from 7.0 per cent) came as a positive surprise to many. Further, the opportunities beyond this plan will excite investors, with material investments yet to be factored across ITC, UNS Energy, and FortisBC. Along with improving earnings predictability (stemming from the upcoming conclusion of TEP’s rate case) and a funding plan that supports its investment grade credit objectives, all these will help Fortis to durably extend its track record of increasing dividends annually.” said Mr. Choy.

* TD Cowen’s Aaron MacNeil raised his Gibson Energy Inc. (GEI-T) target to $40 from $36 with a “buy” rating. Other changes include: RBC’s Maurice Choy to $34 from $33 with an “outperform” rating and National Bank’s Patrick Kenny to $35 from $34 with an “outperform” rating.. The average is $33.17.

“The call commentary shifts Marketing from a one-quarter beat to a more normalized earnings base, partly hedged into 2027, lifting our 2027E EBITDA 6 per cent,” said Mr. MacNeil. “One or several larger organic project announcements are expected next year, a sanctioning is the next catalyst and should support further upside in the shares.”

* TD Cowen’s Mario Mendonca raised his Intact Financial Corp. (IFC-T) target to $309 from $303 with a “buy” rating. The average is $307.75.

" Q3/26 op. EPS $3.63 was down 19 per cent year-over-year, but higher than our $2.76 est. (cons. $3.05). DWP and earned premium were up 5 per cent (estimate 6 per cent). EPS beat came from higher U/W inc. reflecting lower claims ratio (better PYD and current year losses vs. estimate), and a lower expense ratio. Distribution income was up 16 per cent year-over-year (estimate 10 per cent). Investment income was in line," said Mr. Mendonca.

* Following Tuesday’s earnings release, National Bank’s Doug Taylor increased his Shopify Inc. (SHOP-Q, SHOP-T) target to US$185 from US$180 with an “outperform” rating, while Wells Fargo’s Ken Gawrelski cut his to US$205 from US$208 with an “overweight” rating.

“Our increase in our target price ... is deliberate as we think sustaining aggressive growth outweighs a minor near-term margin reset. We believe the share price reaction (down 5 per cent as of writing) reflects lofty expectations vs. a deterioration in Shopify’s financial profile/prospects and therefore represents an interesting entry point. We maintain an Outperform rating while our new target reflects 10.0 times (from 10.5 times) NTM+1 Sales given the temporary margin pressure,” said Mr. Taylor.

* TD Cowen’s Aaron Bilkoski cut his target for Spartan Delta Corp. (SDE-T) to $16 from $17 with a “buy” rating. The average is $17.11.

“Higher-than-expected 2027 capital may grab attention, but we think the headline misses the bigger picture. Infrastructure investment supports a higher 75 mBOE/d Duvernay plateau, lower third-party reliance and a multi-year development plan that should sustain Spartan’s industry-leading liquids growth profile,” said Mr. Bilkoski.

* Seeing its quarterly results a “solid,” National Bank’s Adam Shine increased his Thomson Reuters Corp. (TRI-T) target to $190 from $180 with an “outperform” rating. The average is $174.45.

“TRI appears poised to dial back previously-telegraphed 100-basis-points margin expansion post-2026 to expand its medium-to-longer term growth profile via AI-driven investments. This messaging has been in market since Sept. 22. Post-2026 consensus EBITDA may still be achieved via different growth/margin profile. We made some related adjustments to our post-2026 forecast,” said Mr. Shine.

* Despite third-quarter results that “slightly” exceeded his expectations and a reiteration of its full-year guidance, National Bank’s Patrick Kenny trimmed his TransAlta Corp. (TA-T) target by $1 to $23 with an “outperform” rating. The average is $23.94.

“Based on an improving balance sheet ahead of the Centralia conversion FID (expected Q1/27), and a further $3/sh incremental valuation upside from the full development of 1.6 GW data centre load at the Boreal Technology Hub, we reiterate our Outperform rating,” he said.