A survey of North American equities heading in both directions
On the rise
George Weston Ltd. (WN-T) gained 2.8 per cent on Wednesday after it reported a profit in its fourth quarter compared with a loss a year ago.
The company, which is the controlling unitholder of Choice Properties Real Estate Investment Trust (CHP.UN-T) and the controlling shareholder of Loblaw Companies Ltd. (L-T), says it earned a profit attributable to common shareholders of $664-million or $5.05 per diluted share for the three months ended Dec. 31.
The company says the result compared with a loss of $38-million or 30 cents per diluted share in the last three months of 2023.
On an adjusted basis, George Weston says it earned $3.15 per diluted share in its latest quarter compared with an adjusted profit of $2.51 per diluted share a year ago.
Revenue for the quarter totalled $15.1-billion, up from $14.7-billion a year earlier.
Chairman and chief executive Galen Weston says the results were driven by the consistent and positive performance of its operating businesses.
“Loblaw’s focus on retail excellence provided unmatched quality and value to Canadians, and Choice Properties’ necessity-based portfolio generated stable and growing cash flows,” Mr. Weston said in statement.
“Our businesses are well-positioned to deliver on their strategy and financial objectives in 2025.”
Shares of EQB Inc. (EQB-T) closed up 1.1 per cent following a first-quarter earnings beat, driven by a stronger-than-anticipated credit performance
After the bell on Tuesday, the Toronto-based bank reported adjusted earnings per share of $2.98, exceeding the consensus forecast of $2.74. The beat was attributed to lower-than-expected provisions for credit losses and taxes.
“FQ1/25 adjusted EPS beat us and consensus due to higher non-interest revenue and lower PCLs,” said TD Cowen analyst Graham Ryding. “However, adjustments were material and take away from earnings quality, in our view. A lower tax rate helped. Loan growth remains muted (on-balance sheet), and impairments continue to build (albeit improved equipment finance arrears are encouraging).”
“We have made modest changes to our F2025 estimates, but F2026 has come down due to lower on-balance sheet loan growth. Our $110 target price is unchanged. Lower F2026 estimates are offset by rolling forward valuation by one quarter, and a slightly higher multiple (8.6 times vs. 8.4 times previously) given the improvement in equipment finance arrears. We maintain our Hold rating.”
Nvidia Corp. shares (NVDA-Q) gained 3.9 per cent ahead of the release of its quarterly results and forecasts after markets close, which are likely to set the tone for Wall Street, after low-cost AI models from China’s DeepSeek rattled the industry in January and raised questions around Big Tech’s heavy investments into the technology.
Investors have raked in big returns over the last few years from the AI boom that has accrued largely to the so-called “Magnificent Seven”, a group of tech giants that includes Nvidia, Microsoft (MSFT-Q) and automaker Tesla (TSLA-Q).
That rally marched on despite growing wariness of the stocks’ high valuations - and whether the billions of dollars in investment would yield significant returns.
Those concerns have come to the fore over the last month as several of the stocks declined, led by a 25-per-cent drop in Tesla, while the S&P 500 outperformed the group this year.
The stocks have been further shaken this week after an analyst report said Microsoft scrapped some data centre leases. Shares of Nvidia have declined nearly 6 per cent in that time, fed by worries over the low cost of China’s DeepSeek.
“Nvidia has the heavy task of lifting the market mood this week. If it cannot, the selloff in stocks could accelerate,” said Ipek Ozkardeskaya, market analyst at Swissquote Bank.
“Hopes rest on Nvidia’s shoulders.”
Nvidia, the world’s second most valuable company, has been the top beneficiary of Wall Street’s picks-and-shovels AI trade, adding about US$2.7-trillion in market value since ChatGPT’s November 2022 debut — hailed as AI’s “iPhone moment”.
Lowe’s Cos (LOW-N) joined rival Home Depot (HD-N) in forecasting lacklustre annual sales and profit on Wednesday, signaling that a downturn in the home improvement sector would linger amid higher interest rates.
Shares of the Mooresville, North Carolina-based retailer were up 1.9 per cent as it reported a surprise rise in fourth-quarter same-store sales, helped by demand for water cans, generators and cleaning supplies after Hurricanes Helene and Milton last year.
The home improvement sector has witnessed a sharp slowdown over the last two years as high mortgage rates, rising home prices as well as refinancing costs stifled demand.
Lowe’s forecast follows conservative projections from Walmart (WMT-N) and Home Depot in recent days, which analysts said is a signal to keep expectations intact, given how early in the year it is.
U.S. consumer confidence deteriorated at its sharpest pace in three-and-a-half years in February, data on Tuesday showed, with Americans becoming more worried about the potential economic impact of President Donald Trump’s policies.
Since taking office in January, Trump has promised tax cuts as well as broad tariffs on imports and is cracking down on illegal immigration , which could worsen the shortage of skilled laboUr in the U.S.
The retailer cited near-term pressure in do-it-yourself projects such as flooring as well as kitchen and bath remodeling, which make up about 70 per cent of its annual revenue.
Despite diversifying their supply chains, home improvement retailers are exposed to tariffs on lumber and metal product imports from Canada. Imports of hardware, tools and other durable products such as appliances and home-related goods from China also affect them.
Lowe’s has said it sources 40 per cent of its goods, including its own private brands, internationally. Home Depot, which sources about half its goods from outside North America, said a day earlier it was well placed to manage any impact from tariffs.
Lowe’s expects full-year 2025 comparable sales to be flat to up 1 per cent compared to analysts’ estimate of a 1.13-per-cent rise, according to data compiled by LSEG.
It forecast earnings per share in the range of US$12.15 to US$12.40, compared to analysts’ estimate of US$12.49 per share.
The company reported a 0.2-per-cent rise in same-store sales for the quarter ended January 31, compared to analysts’ average estimate of a 1.9-per-cent decline.
It earned US$1.93 per share on an adjusted basis, above an estimate of US$1.84 in profit.
General Motors Co. (GM-N) said on Wednesday it would increase its quarterly dividend by 25 per cent and undertake a new US$6-billion share buyback program to return excess cash and increase shareholder value.
Shares of the automaker rose 3.7 per cent in response to the premarket announcement.
The U.S. automaker said it expected to repurchase US$2-billion of shares by the first half of this year, with the remainder to be bought at any point of the company’s choosing.
The quarterly dividend increase from 12 US cents to 15 UScents a share will take effect with the company’s next planned dividend in April 2025, it said.
GM had announced a dividend increase and a US$10-billion share buyback program in November 2023.
The automaker said in the fourth quarter it completed that buyback program and also repurchased 87 million shares in the open market. At the end of the quarter, GM had an outstanding share count of 995 million, hitting its goal of reducing the share count to less than 1 billion shares.
GM in June 2024 approved another US$6-billion share buyback, of which US$300-million is outstanding.
Anheuser-Busch InBev (ABEV-N) on Wednesday reported forecast-beating fourth-quarter profits and progress in cutting debts that have hung over the company for a decade, sending its shares up over 5 per cent even as China weakness dragged on sales.
Pricier labels like Corona and Michelob Ultra helped AB InBev to push revenues to an all-time high. The world’s largest brewer said cost management also drove margin expansion, producing a 10.1-per-cent rise in fourth-quarter profits versus analyst forecasts of 7.7 per cent.
The company cut its debt down to a range that investors and analysts said could unlock returns for shareholders that have been stymied for years by high leverage.
“We are turning a corner on debt repayment,” said Johannes Moeller, portfolio manager at MW Compounders, an AB InBev investor.
“I expect them to significantly step up both buybacks and dividends over the coming years,” he said.
An earlier acquisition drive left AB InBev with some US$100-billion in debt built up following the company’s blockbuster takeover of SABMiller announced in 2015.
The debt came down to 2.89 times earnings before interest, tax, depreciation and amortization (EBITDA) by the end of 2024, within the range investors generally see as acceptable for companies.
Analysts described the company’s results as a strong end to the year. That follows bumper results from rival Heineken , the world’s No.2 beer maker, and Carlsberg.
All three brewers forecast further profit growth next year, with AB InBev forecasting between 4 per cent and 8 per cent, adding to optimism around the sector. Its shares were higher, despite a 19-per-cent drop in volumes in China that dragged AB InBev’s fourth-quarter volumes below expectations.
The brewer makes around a fifth of its sales in the country, analysts estimate, where a weak economy has hit demand for AB InBev’s portfolio of pricier labels.
3M Co. (MMM-N) turned higher and finished up 0.6 per cent after it said on Wednesday it would return at least US$10-billion in cash to shareholders and targeted an operating margin of about 25 per cent by 2027, as the diversified manufacturer benefits from a restructuring under its new CEO.
Bill Brown, who succeeded Mike Roman as CEO in May, has focused on developing new products, redirecting spending from the company’s earlier priorities of mitigating legal liabilities and reducing supply-chain costs.
Saint Paul, Minnesota-based 3M has also focused on reining in costs and exiting less-profitable consumer product lines to combat slowing demand as part of its restructuring efforts.
3M also reaffirmed its annual forecast of organic sales growth in the range of 2 per cent to 3 per cent.
The company, which will host its annual investor day later on Wednesday, reported an operating income margin of 19.6 per cent last year.
On the decline
Shares of National Bank of Canada (NA-T) were lower by 5.5 per cent after it reported higher first-quarter profit that beat analysts’ expectations as capital markets and wealth management activity surged amid market volatility, offsetting a jump in provisions for loan defaults.
Major Canadian bank earnings have received a boost this quarter from strong performance in trading activity as equity markets whipsawed in the aftermath of the U.S. presidential election in November. National Bank’s net income rose 8 per cent to $997-million, or $2.78 per share, in the three months that ended Jan. 31.
Adjusted to exclude certain items, including which costs related to the acquisition of Canadian Western Bank, the bank said it earned $2.93 per share. That edged out the $2.66 per share analysts estimated, according to Refinitiv.
“In a context of heightened macroeconomic and geopolitical uncertainty and an evolving credit cycle, we remain committed to maintaining our usual discipline regarding credit, capital and costs,” National Bank chief executive officer Laurent Ferreira said in a statement.
National Bank set aside higher provisions for credit losses – the funds banks reserve to cover loans that may default.
The bank reserved $254-million in provisions, higher than analysts anticipated and more than double the amount the bank allocated in the same quarter last year. This included $196-million against loans that the bank believes may not be repaid – a 33-per-cent increase from the previous year quarter.
The boost was driven by deteriorating loans in commercial and retail banking.
- Stefanie Marotta
Alimentation Couche-Tard (ATD-T) was down 2.1 per cent after reaffirming its commitment to a takeover of Japan’s Seven & i Holding after Japan’s Itochu withdrew from a buyout proposed by the retailer’s founding family.
After receiving a takeover bid from the Canadian company last year, Seven & i’s founding Ito family began talks to take the convenience store owner private for an estimated $58 billion.
The Nikkei newspaper first reported earlier on Wednesday that Itochu had decided not to participate in the buyout.
Itochu had considered investing 1 trillion yen ($6.69 billion) in the deal but ultimately saw few synergies between its food and beverage business and Seven & i, Nikkei said.
Itochu’s decision to bow out casts a shadow on the prospect of the Ito family’s proposed management buyout, which would be the largest in history if successful.
Going private would allow the operator of more than 80,000 7-Eleven convenience stores around the world to retain its management and remove pressure from shareholders to sell off more of its assets - as well as eliminate the threat from a bidder that it may see as hostile.
A management buyout offer could also be a tactic to force Couche-Tard to bid more.
A spokesperson for the Canadian retailer said on Wednesday that Couche-Tard remained committed to reaching a mutually agreeable transaction with Seven & i and would retain the store chain’s role in emergency response infrastructure.
Japanese officials have said convenience stores and their distribution networks could be used to help disaster victims and have scrutinized how a foreign company’s takeover could impact national security.
U.S.-listed shares of BP PLC (BP-N) declined 1.7 per cent after it slashed planned investment in renewable energy and said on Wednesday it would increase annual oil and gas spending to US$10-billion, in a major strategy shift aimed at boosting earnings and shareholder returns.
The oil major cut planned annual investment in energy transition businesses by more than US$5-billion, from its previous forecast, to between US$1.5-billion and US$2-billion per year.
“We will grow upstream investment and production to allow us to produce high margin energy for years to come. We will focus our downstream on markets where we have leading integrated positions,” CEO Murray Auchincloss said in a statement.
Under Mr. Auchincloss’s predecessor, Bernard Looney, BP pledged in 2020 to cut oil and gas output by 40 per cent while rapidly growing renewables by 2030. BP lowered the reduction target to 25 per cent in 2023.
BP now aims to grow oil and gas production to between 2.3 million and 2.5 million barrels of oil equivalent per day (boepd) in 2030.
Across the energy sector, major companies that shifted their position in response to the need to lower carbon emissions and curb climate change have returned the focus to oil and gas, where returns have become easier as fossil fuel prices have rebounded from COVID-19 pandemic lows. “We will be very selective in our investment in the transition, including through innovative capital-light platforms. This is a reset BP, with an unwavering focus on growing long-term shareholder value,” Mr. Auchincloss said.
BP is seeking to regain investor confidence after underperforming its peers and has come under added pressure to make transformative changes after activist investor Elliott Investment Management built a stake in the company.
“The refocus on hydrocarbons is positive for BP as is the overall lower spending, which is driven by lower renewable spending,” said Allen Good, director of equity research at Morningstar.
“Along with the asset divestitures it should improve the balance sheet and returns. However, there still is little, if any, production growth, and BP’s repurchase rate has been reduced materially,” Good said.
BP plans to raise its dividend by at least 4 per cent per share annually and expects first-quarter share buybacks of US$750-million to US$1-billion, a downward revision from its previous US$1.75-billion forecast.
It said it was reviewing its lubricants business, Castrol, and targeting US$20-billion in divestments by 2027.
BP plans to spend between US$13-billion and US$15-billion annually through 2027, trimming US$1-billion to US$3-billion from 2024 levels, with 2025 capital expenditure expected at around US$15-billion.
Electric-vehicle maker Lucid Group (LCID-Q) said on Tuesday its Chief Executive Officer Peter Rawlinson will step down from the role, and forecast that vehicle production will more than double this year, sending the company’s shares lower by 13.6 per cent.
The company’s operating chief, Marc Winterhoff, will take the position of interim CEO.
“Now that we have successfully launched the Lucid Gravity, I have decided it is finally the right time for me to step aside from my roles at Lucid,” Mr. Rawlinson said.
The firm also forecast vehicle production this year to be around 20,000, compared with around 9,000 cars it made in 2024.
Andres Sheppard, senior equity analyst at Cantor Fitzgerald, said the CEO transition is “surprising” but not unexpected, adding that the production forecast is “encouraging.”
The company hired veteran finance professional Taoufiq Boussaid as its chief financial officer last month. Boussaid was previously group CFO of Belgium-listed steel and coatings technology company NV Bekaert SA and contributed to reducing debt load.
As the EV demand in the United States remains uncertain, Lucid has been trying to diversify its product lineup and step into the SUV market with the Gravity model, going toe-to-toe with Tesla’s model X and Rivian’s R1S vehicles.
“They (Lucid) still have an amazing product. Now it’s just a matter of can they turn the company around, can they increase demand and production with the Gravity, and really that’s going to bridge the gap to their mid-size vehicle in 2026,” Mr. Sheppard said.
With files from staff and wires