Monday’s analyst upgrades and downgrades

Here’s a concise look at notable analyst actions and takeaways from a busy slate of corporate updates and outlook shifts across transportation, industrials, autos, gold developers, and real estate.

Canadian National Railway (CNI/CNR): strategy pivots, targets rise

CN’s Q3 adjusted EPS of $1.83 beat expectations and management reaffirmed its 2025 outlook for mid- to high-single-digit EPS growth on low-single-digit volume gains. More importantly, management signaled a strategic pivot: with volume growth lagging amid macro headwinds, CN plans to reduce 2026 capex by nearly $600 million from this year’s $3.35 billion. The company is emphasizing productivity, variable cost flexibility, and higher free cash flow, while targeting an operating ratio below 60 and leaning more on partnerships than transformative deals to drive volume.

• Citi raised its U.S. target to US$120, reiterating Buy, citing improved FCF and network advantages.
• RBC lifted its target to C$158 with Outperform, highlighting the beat, maintained guidance, substantial capex reduction, and increased buybacks.
• CIBC moved to C$146 with a Neutral rating.

Toromont Industries (TIH): margin beat, AVL ramp supports higher targets

Shares jumped after Toromont reported Q3 revenue of $1.315 billion (down 2% y/y) but delivered stronger-than-expected EBITDA of $256 million and adjusted EPS of $1.80. Equipment margins are stabilizing and Product Support is improving. The AVL Manufacturing acquisition is proving accretive with solid backlog visibility; Hamilton is near full capacity and Charlotte is ramping through 2026. Analysts expect sustained margin tailwinds into 2026–2027 supported by pricing, operating leverage, and disciplined costs.

• National Bank raised its target to C$176 (Outperform).
• Scotia to C$175 (Sector Perform), modeling a quicker AVL ramp.
• RBC to C$180 (Outperform); TD Cowen to C$180 (Buy).
• CIBC to C$172 (Neutral); Canaccord Genuity to C$172 (Buy).

TFI International (TFII): weak near-term guide, constructive 2026 setup

Q3 adjusted EPS of $1.20 was in line, while free cash flow of $199 million exceeded forecasts, supporting dividends and buybacks. Management guided Q4 EPS to $0.80–$0.90, below the Street, due to soft logistics volumes and freight demand. Offsetting actions include tighter cost control, improving LTL service and margins, and a reduction in 2025 capex to $150–$175 million aided by surplus equipment from Daseke. Management sees pricing firming and a potential upturn in 2026.

• RBC cut its target to US$102 (Outperform), noting a large valuation discount to peers despite cyclical upside potential.
• National Bank to C$145 (Outperform); Desjardins to C$157 (Buy).
• Citi to US$106 (Buy); CIBC to US$112 (Outperformer); JP Morgan to US$106 (Outperform).

Magna International (MGA/MG): Q3 beat, 2025 outlook nudged up

Magna posted better-than-expected sales (~US$10.3 billion), adjusted EBIT of US$613 million, and EPS of US$1.33, driven by Power & Vision and Seating. 2025 sales guidance increased to US$41.1–$42.1 billion, with operational excellence initiatives adding 35–40 bps of margin this year and capex trimmed. Management sees 2026 margins building on operational gains and new-launch economics; leverage is set to be back within target by year-end, and the NCIB has been renewed.

• Scotia to US$52 (Sector Perform); RBC to US$48 (Sector Perform).
• TD Cowen to US$58 (Buy); JP Morgan to US$57 (Overweight); CIBC to US$50 (Neutral).

Precious metals developers: constructive macro, M&A interest rising

With political uncertainty, easing real rates, persistent inflation, and ongoing central-bank buying, a supportive gold backdrop is boosting free cash flow across producers and sharpening interest in M&A. An analyst initiated coverage on four Canadian developers viewed as well positioned to advance projects and attract strategic interest. One developer advancing the Goldboro project in Nova Scotia is nearing final federal permitting after securing provincial approvals.

• First Mining Gold (FF): Outperform, target C$0.70; progressing Springpole permitting with construction readiness targeted post-approvals.
• Probe Gold (PRB): Tender, target C$3.65; board-backed all-cash acquisition offer recommends tendering.
• Thesis Gold (TAU): Outperform, target C$3.00; moving from PEA to PFS on its Lawyers–Ranch project in B.C., seen as a regional consolidation candidate.

Other notable calls

• Aecon (ARE): Q3 adjusted EBITDA topped forecasts despite legacy fixed-price losses; nuclear strength and a record ~$10.8 billion backlog support 2026 top-line visibility.
• Allied Properties REIT (AP.UN): Targets reduced (CIBC to C$15.50, Neutral; RBC to C$16, Sector Perform). Analysts flag elevated payout, leverage concerns, and potential distribution cut amid a slower recovery for its portfolio.
• Canadian renewable IPPs: Analysts see investors looking beyond weak year-to-date production toward a widening power supply deficit that could underpin higher development returns.
• Chorus Aviation (CHR): TD Cowen raised its target to C$30 (Buy), citing predictable CPA economics and growing confidence in Voyageur’s 2025 revenue target.
• Cogeco Communications (CCA): Desjardins trimmed its target to C$71 (Hold). U.S. revenue pressure persists despite better Canadian internet trends.
• Morguard REIT (MRT.UN): RBC noted a modestly improved outlook post-Q3 with better retail momentum partially offsetting office headwinds; balance sheet and tenant exposure remain in focus.
• Premium Brands (PBH): National Bank lifted its target to C$104 (Sector Perform), expecting Specialty Foods sales to accelerate and margin expansion toward 2026.

Across the board, analysts are rewarding companies tightening capex, protecting margins, and prioritizing free cash flow, while keeping a close eye on 2026 setups in freight, industrials, and autos—and on consolidation opportunities in Canadian gold.