Inside the Market’s roundup of some of today’s key analyst actions
TD Cowen analyst Michael Tupholme downgraded Ag Growth International Inc. (AFN-T) to “hold” from “buy” previously, emphasizing “the level of risk and expected cost associated with AFN’s ability to manage upcoming debt maturities (one this year and two converts next) has risen considerably since early-August.”
Last week, the Winnipeg-based company announced that it is seeking various amendments to the terms of its $85-million, 5.25-per-cent senior debentures due Dec. 31, including the maturity date to Dec. 31, 2030, and increasing the interest rate from 5.25 per cent to 9.0 per cent.
“AFN’s elevated leverage ratio (5.2 times) and how it planned to deal with upcoming debt maturities have been focus areas for investors (AFN also has two converts maturing in 2027),” said Mr. Tupholme in a client note. “However, relative to when we last published on AFN (early-August), we now see an increased level of risk and cost associated with AFN’s ability to manage upcoming maturities (bond yields in general and yields on AFN’s own debentures have both risen sharply). Until now, AFN provided few details on its refinancing plans.
“While the path AFN is pursuing for its 2026 debentures has now been revealed, uncertainty and questions remain. First, it remains to be seen if the proposed amendments will be passed (Oct. 28, 2026 meeting; 66 2/3-per-cent approval needed). If not passed, precise next steps are unclear (we believe options exist, but lack of clarity on potential structure/terms). Second, we believe risk/uncertainty has increased around how AFN will handle its two 2027 convert maturities ($115-million due Jun. 30, 2027; $104-million due Dec. 31, 2027), and we do not expect near-term clarity.”
After updating his forecast to reflect higher interest expense and lower cash flow estimates), Mr. Tupholme dropped his target for Ag Growth shares to $11 from $23. The average target on the Street is $20.57.
“We expect pending debt maturities to act as an overhang on the stock. Likelihood of a favourable re-rating is limited, in our view, until clarity is obtained on pending 2026/2027 maturities (i.e., any improvement in agriculture fundamentals likely to be too gradual and overlooked for the time being given balance sheet/refinancing focus),” he said. “Visibility into AFN’s Strategic Review Committee’s work is very low, but we note that a value-surfacing event (such as a sale of AFN) represents a potential source of upside risk to our PT.”
Scotia Capital analyst Jonathan Goldman sees the current price for 5N Plus Inc. (VNP-T) as “an attractive entry point for a business that could continue to compound EBITDA/share in the [double digits] over the next several years – before considering upside from defence.”
In a client report released before the bell titled Underappreciated and Overreacted, he said the Montreal-based producer of specialty semiconductors and performance materials is becoming “a defence one-stop shop” and the upside potential from its position in that industry “could be material.”
“We believe 5N has become embedded in the U.S. military supply chain and that relationship should only deepen,” said Mr. Goldman. “It started with a DoD grant in 2024 supporting germanium (Ge) crystal growth and substrate manufacturing at St. George. Earlier this year, the company received another grant to increase Ge recycling and refining by 7 times. Supplying upstream Ge opened the door to downstream opportunities, including the recent award to establish domestic production of gallium arsenide (GaAs) components. The U.S. is fully reliant on gallium (Ga) imports according to the U.S. Geological Survey.
“Last week, the company announced plans to increase capacity at St. George by 50 per cent. That’s an increase to entire site capacity, which encompasses other product lines besides Ge recycling/refining, including aforementioned GaAs. None of this is in our numbers, but we estimate Ge tolling alone could add 5-10 per cent to our 2028 estimates. Further, U.S. imports of GaAs wafers were US$120-million in 2025. At 25 -per-cent market share, we estimate that could add another 10 per cent to our 2028 estimates.”
While 5N Plus’ shares have recovered most of the losses since second quarter, Mr. Goldman noted they are still off their highs by 35 per cent, emphasizing “we expect margin compression to be a blip as pass-throughs work their way through the system.”
“2Q results likely dredged up outdated perceptions that 5N is still a commodity pass-through business tied to a metal margin – but, the business has been completely transformed over the past five years into higher margin downstream operation underpinned by long-dated customer relationships,” he added. “For context, LTM [last 12-month] EBITDA margins are up nearly 2 times since 2021 despite the cost of its main input rising by 3 times. Already strong end-markets are incrementally positive with AZUR (space) bid value up 2 times year-over-year in 1H and recent DoW awards.
“We think the market is underappreciating how material the defence opportunity could be underscored by the recent 50-per-cent capacity expansion announcement at its St. George, Utah facility.”
Maintaining his “sector outperform” rating for 5N Plus shares, he raised his target to $37 from $35. The average on the Street is $45.31.
“VNP shares are trading at 16.1 times EV/EBITDA on our 2027 estimates, down 25 per cent from peak of 21.5 times in June,” he said. Sector valuations have also come off, but not to that degree.
“Sector valuations have also come off, but not to that degree: Defence (down 15 per cent), Semis (down 15 per cent), Solar (down 3 per cent), Space (down 15 per cent). However, we do not view VNP as a purely sentiment-driven or speculative story. The company is already benefitting from durable secular trends with 2/3 of top-line contracted out to 2027/2028 supporting high double-digits growth before any contribution from defense. Gross margin compression is a temporary blip while operating leverage supports additional margin expansion. The balance sheet is in great shape with net debt to EBITDA including leases of 0.5 times as at 2Q26 down from 1 times last quarter.”
With its flagship Morelos Property in Mexico continuing to demonstrate “long-life potential, delivering broad, high-grade intersections across all major mining fronts,” ATB Cormark analyst Richard Gray upgraded Torex Gold Resources Inc. (TXG-T) to “outperform” from “sector perform” in response to the release of its third-quarter exploration results.
“The exploration results continue to demonstrate the exceptional potential of the Morelos property for resource expansion and mine life extensions, while the Morelos operation should have a much stronger H2/26 and generate significant FCF,” he said.
“These results position Torex well for another year of successful resource and reserve replacement ahead of the upcoming 2027 MRE.”
Mr. Gray hiked his target to $89 from $71. The average is $91.20.
TD Cowen analyst Wayne Lam views Artemis Gold Inc.’s (ARTG-X) acquisition of Vista Gold Corp. (VGZ-T) in an all-stock deal valued at US$427 million “constructively, adding a large-scale asset in a similar vein to the purchase of Blackwater that kickstarted the path to production in 2020.”
“We view the addition of the Mt Todd project in Australia providing another large-scale asset to complement Blackwater with total reserves of 5.2 Moz [million ounces] at 0.94 g/t [grams per ton] Au and a large resource base totaling 10.6 Moz at 0.83 g/t Au (M&I+I),” he explained. “We model upfront construction of the 50 Ktpd [tons per day] operation but note potential for ARTG to pursue another phased build out strategy similar to Blackwater. Based on capital intensity of the Blackwater build to 21 Mtpa ($83/tpa) along with inflation, we estimate total capex of $1.82B for a 50 Ktpd operation representing capital intensity of $100/Mtpa (page 4), which compares vs Cote ($218/tpa) and Greenstone ($125/ tpa). We estimate production of 406 Koz/yr at mine-site AISC of $1,626/oz over 12 years with potential upside via conversion of the larger M&I resource, which could double the current life.”
Mr. Lam now expects Artemis to focus on the upcoming work plan to be released post-closing in early-2027.
“Key focus items include (1) ore hardness and corresponding cost impact with flowsheet including a multi-stage crush and HPGR circuit, (2) ongoing consultation with the Jawoyn Aboriginal Community and protection of sacred sites across the mining license while noting Aboriginal Areas Protection Authority (AAPA) Certificate in hand, and (3) optimization of the mine plan and design given similarities to Blackwater,” he said. “Given the success of the ARTG mine build team on construction and ramp up at Blackwater to date, we view investors having a higher degree of confidence in execution and identification of upside opportunities.”
“In our view, the planned construction of Mt Todd post completion of EP2 positions ARTG on a path to production of 1 Moz annually. However, given growth capex of C$1.44-billion anticipated with the EP2 build to be completed by mid-2028 and our subsequent estimate of $1.82-billion for Mt Todd starting in mid-2029, we estimate relatively limited FCF generation for ARTG through 2030. As such, we anticipate near-term focus on guided timeline and spending to advance Mt Todd to a construction decision. Lastly, we view investors potentially viewing the acquisition as a signal that a takeout is not imminent, which may provide a modest overhang for those who had viewed ARTG being well positioned as a candidate for consolidation.”
Maintaining his “hold” rating for Artemis shares, Mr. Lam raised his target to $44 from $39. The average is $53.75.
“On a pro-forma basis, we estimate ARTG trading at 0.7 times spot NAV, representing a 30-per-cent discount vs Intermediate peers reflecting construction risk ahead with potential for gradual rerating as growth objectives are achieved,” he said. “While we estimate the acquisition being significantly accretive on a NAV basis, we remain on the sidelines given limited near-term FCF amidst construction of EP2 and Mt Todd.
“Our rating is based on a more tempered FCF outlook as ARTG moves through an investment cycle with build out of the Phase 1A and EP2 expansion projects, followed by anticipated construction of Mt Todd. We continue to view the company constructively on a longer term basis given large-scale, low cost output in Tier I jurisdictions with Blackwater in Canada complemented by Mt Todd in Australia.”
National Bank Financial analyst Mike Stevens thinks the growth and margins for Calian Group Ltd.’s (CGY-T) Global Navigation Satellite System (GNSS) “appear stronger than investors may appreciate.”
He said a tour of the company’s GNSS manufacturing facility in Ottawa last week highlighted it “as one of the clearest examples of Calian’s technology-led growth opportunity, supported by attractive margins.”
“While still a relatively small contributor to Calian overall, we estimate GNSS now generates close to $50-million in annual revenue, or 6-per-cent-plus of consolidated revenue, up from just $9-million when Calian acquired Tallysman Wireless six years ago,” said Mr. Stevens. “Demand remains broad across commercial and defence applications, supporting continued double-digit growth, with defence becoming a more meaningful contributor. Further, we believe the business generates strong Adj. EBITDA margins above Calian’s 23-per-cent Defence & Space segment margin, reinforcing GNSS as a particularly attractive source of organic growth within the portfolio.
“Customization and design-in capabilities support a durable competitive position. Calian can efficiently tailor antennas around a customer’s platform requirements, supported by deep radio frequency (RF) expertise, a broad product catalogue and relatively short lead times. Once designed into an OEM platform, Calian participates as production scales, while the engineering, testing and qualification work required to change suppliers can make those positions durable over time.”
Mr. Stevens thinks the GNSS’ capacity should also “support the next leg of growth.”
“The operation is running at high utilization, but additional shifts, selective automation, third-party board assembly and better use of the 65,000 sq. ft. footprint provide meaningful room to scale before a major new facility is required,” he added.
“The tour reinforces a key element of our thesis that Calian’s proprietary technology businesses can support organic, modernization-led growth, with GNSS a strong example.”
He reaffirmed his “outperform” rating and $100 target for Calian shares. The average is $103.83.
Desjardins Securities’ Lorne Kalmar said he came away from Crombie Real Estate Investment Trust’s (CRR.UN-T) analyst day in Halifax last week “impressed with the REIT’s newest addition to its multi-res portfolio, renewed conviction in the Empire/ Crombie relationship, and a high degree of optimism regarding Nova Scotia’s near- and longer-term economic prospects.”
“We found management’s update to be an informative refresher of the REIT’s strategy and where it sees meaningful opportunities within the portfolio,” he explained. “Leasing commentary remained constructive, with management emphasizing that its coast-to-coast platform, including 6msf of retail GLA in regional markets, provides a competitive advantage with retailers seeking a presence in markets of various sizes. Of its top 20 tenants, 19 operate in regional markets. The Marlstone, where the event was hosted, showed very well, in our view, with condo-quality finishes, a strong amenity offering and a centre-ice location. While no leasing update was provided, we are optimistic this unique offering in the heart of downtown Halifax will perform well.
“The Empire Strikes Back. Empire’s SVP of Real Estate and Construction, Mark Eaton, provided constructive commentary around CRR’s future participation in store growth and modernizations. He believes Empire’s GLA will continue to grow at 1–2 per cent annually. As the landlord for 20 per cent of Empire’s stores, this should provide a good runway of growth for the REIT. With Empire aiming to refresh its stores every 10 years, we expect modernizations to remain an important component of CRR’s non-major development program for the foreseeable future.”
In a note titled East Coast Kitchen Party, Mr. Kalmar updated his forecast for Crombie to reflect the recent rise in bond yields, and he now sees mortgage renewal rates of 5.0 per cent and unsecured refinancing rates of 4.85 per cent.
“These changes did not have a material impact on our estimates,” he said. “Our 2026 and 2027 estimates were largely unchanged, while 2028 declined less than 1 per cent. We expect 2.5-per-cent annual FFOPU growth in 2026 and 2027, before moderating slightly to 2 per cent in 2028.
Mr. Kalmar reaffirmed his “buy” rating and $18 target for Crombie units. The average is $18.58.
“Following the recent sell-off, CRR offers a 28-per-cent total return to our target,” he said. “We believe the REIT will remain well insulated in the current environment, while offering upside via acquisitions and non-major developments.”
Elsewhere, RBC’s Pammi Bir kept a “sector perform” rating and $18 target.
“CRR’s analyst day provided an ‘inside baseball’ peek at its operating and capital allocation strategies,” said Mr. Bir. “Rather than a multi-year outlook or guidance, presentations underscored the strengths of its national portfolio of grocery anchored properties, ability to create value through portfolio optimization, and advantages afforded by its strategic ties with Empire (EMP). A tour of The Marlstone and other Halifax retail properties also highlighted the quality of its assets. At current levels, we see steady growth and a reasonable valuation.”
Canaccord Genuity’s Carey MacRury upgraded Montage Gold Corp. (MAU-T) to “buy” from “speculative buy” to reflect “the transition from developer to producer following the company’s announcement of the first gold pour at its Koné mine in Côte d’Ivoire.” His target jumped to $22.50 from $21, exceeding the $21.19 average on the Street.
“On September 26, the Koné mine achieved its first gold pour on budget and ahead of its guidance for late 2026 and initial schedule of Q2/27, an impressive feat in less than two years. The oxide circuit now shifts from commissioning to ramp-up, with commercial production expected in Q4/26. The hard rock comminution circuit is on track and on budget for completion in Q2/27. Results from the company’s ongoing 130,000-metre drilling program at Koné are expected in Q4/26, with Montage targeting a life-of-mine plan update alongside its year-end 2026 reserves and resources,” said Mr. MacRury.
Elsewhere, calling the first gold pour a “derisking event,” Beacon Securities’ Bereket Berhe hiked his target to $26 from $21.50. with a “buy” rating.
“Reaching this significant milestone after only starting construction in December 2024, is a rapid and significant derisking event for the Koné gold project. Achieving this milestone also bodes well for the company’s strategy of creating a multi-asset, Africa-focused gold producer as the company plans to move to rapidly advance its development pipeline, especially the Didievi project in Côte d’Ivoire to development,” said Mr. Berhe.
In other analyst actions:
* Touting “a more durable backlog than historically,” Ventum Capital’s Daniel Lavoie initiated coverage of Terrebonne, Que.-based steel fabricator ADF Group Inc. (DRX-T) with a “buy” rating and $20.50 target. The average is $21.
“Our investment thesis rests on five key pillars: infrastructure spending provides a multi-year demand runway; structurally improved core margins following investments in automation; Groupe LAR as a new growth platform with exposure to hydroelectric infrastructure; capacity expansion and revenue visibility driven by durable backlog; and a compelling valuation relative to peers at an inflection point on ADF’s improved earnings durability.
“The key change in the ADF story, in our view, is not simply the size of the backlog, but its duration and composition. Multi-year contracts now provide revenue visibility several years forward, while the Canadian share of backlog has increased substantially. We believe this should reduce the historical volatility associated with ADF’s project-based business and provide greater visibility around production, labour requirements, and capital investments.”
* In a preview of its third-quarter results. RBC’s James McGarragle moved his target for Algoma Steel Group Inc. (ASTL-T) to $7 from $6, keeping a “sector perform” rating. The average is $5.55.
“We decrease our Q3 EBITDA estimate to negative $40-million (from negative $3-million; consensus negative $37-million) and revise our full-year 2026 EBITDA to negative $226-million (from negative $221-million; cons. negative $241-million), reflecting the volume impact from the turbine outage, partially offset by higher steel prices,” he said. “We remain focused on the 2027 EBITDA trajectory, as we expect higher steel prices and improved fixed cost absorption on recovering volumes to drive an earnings inflection. We continue to view tariff normalization as the key re-rating catalyst for Algoma.”
* TD Cowen’s Derek Lessard increased his target for The Cronos Group Inc. (CRON-T) to $7 from $6, reaffirming a “buy” rating. The average is $4.73.
“We came away more bullish on CRON following the company’s inaugural investor day, with the GrowCo tour reinforcing that this is far more than a cultivation story. Proprietary genetics, purpose-built assets, and focused hero brands are driving stronger growth, margins, and FCF. CRON’s debt-free balance sheet also positions it to fund expansion, repurchase shares, and pursue value-enhancing M&A,” said Mr. Lessard.
* ATB Cormark’s MacMurray Whale reduced his NanoXplore Inc. (GRA-T) to $2.25 from $3 with an “outperform” rating. The average is $1.98.
“We have updated our long-term estimates following revenue guidance provided by Management for F2027 and F2028, as part of Q4/F26 reporting. In today’s note, we put this guidance in the context of updates Management provided on initiatives to expand adoption of graphene drilling fluids, foams, plastic films and recycled materials,” said Mr. Whale.
* ATB Cormark’s Kyle McPhee cut his target for Zedcor Inc. (ZDC-X) to $9.25 from $10 with an “outperform” rating. The average is $7.
“ATB Cormark marketed Zedcor Management through Toronto on September 24. Evidence and commentary leave us convinced there is no pending slowdown for the impressive rate of growth and cash earnings compounding, with whitespace demand remaining abundant across the U.S. and Canada. The current market pricing of the stock contrasts with our view on growth durability, and we think the stock divergence from fundamental performance over the last year has translated into an attractive setup of growth + value for investors,” said Mr. McPhee.