Get ready for a deep dive into the world of analyst insights and market predictions! Today, we're exploring the latest upgrades and downgrades that are shaping the investment landscape. Brace yourself for some exciting revelations and a few controversial twists along the way!
Our journey begins with a warning from Scotia Capital's Jonathan Goldman, who highlights potential risks for Canadian engineering and construction shares in the near term. He paints a picture of a slow-moving environment, with projects advancing cautiously due to uncertainty. But here's where it gets interesting: Goldman predicts a potential turnaround in 2026, with growth re-accelerating in the second quarter.
In his report, titled "Seeing Is Believing," Goldman finds a silver lining in the reduced valuations, attributing them to concerns about U.S. growth and AI disruption. He believes these fears are overblown, presenting an attractive entry point for investors. And this is the part most people miss: he highlights the vibrant M&A activity in the sector, with WSP, STN, and ATRL leading the charge.
WSP Global Inc. takes center stage as Goldman's top pick for the year ahead, with an increased target price of $320. He emphasizes the significant deal with TRC, which catapults WSP into the best organic profile in its cohort. But the story doesn't end there; Goldman predicts further growth catalysts, including margin expansion, APAC recovery, and more M&A activity.
Stantec Inc. also receives a boost, with Goldman raising his target price to $162 and a "sector outperform" rating. He notes the company's need for M&A to meet its 2026 targets but assures it's not an unrealistic stretch.
AtkinsRéalis Group Inc.'s nuclear business is expected to reach another inflection point in the second half of the year, yet Goldman trims his target to $112. He highlights potential catalysts, including the signing of new projects and the announcement of CANDU as a preferred vendor. However, he cautions about potential adjustments to organic growth targets due to slower market activity.
Now, let's shift our focus to the precious metals sector. TD Cowen analyst Steven Green upgrades SSR Mining Inc. to "buy," citing an attractive valuation amidst surging gold prices. Green expects continued production increases and highlights the potential positive catalyst of a Copler restart.
The TD Cowen team predicts a "strong" fourth-quarter for producers, driven by record prices and seasonal production strength. They emphasize the supportive macro backdrop, with rising geopolitical tensions and Fed easing.
Looking ahead, the analysts forecast an average gold price of $4,650/oz in 2026, with a bullish backdrop driven by geopolitical uncertainty and new buyers like Tether. They expect margins and FCF expansion, despite some cost pressures.
Moving on to the technology sector, National Bank Financial analyst Richard Tse anticipates a large in-line earnings season for Canadian tech companies. He highlights the impact of cross-border trends and the continued market leadership of AI and semiconductors.
Tse expects valuation rewards for AI-resilient businesses and those entering strategic inflections. He singles out CGI, Kinaxis, OpenText, Shopify, Vitalhub, and Zedcor as potential outperformers over the next 12 months.
In the forestry and packaging sector, TD Cowen analyst Sean Steuart believes sentiment has started positively in early 2026, with investors reacting to encouraging U.S. home sales data and upward price momentum. He predicts an eventual demand recovery, led by supply closures.
Steuart updates his industry outlook through 2027, leading to higher target prices for several stocks. He highlights expected sector themes, including supply response and balance-sheet preservation.
Finally, National Bank Financial analyst Vishal Shreedhar expects Saputo Inc. to display strong earnings per share momentum, driven by a recovery in its international markets. He attributes this to efficiency initiatives and an improved commodities backdrop.
As we wrap up our journey through these analyst insights, remember that these predictions and upgrades are just the beginning. The market is a dynamic entity, and these opinions may spark differing views. So, what do you think? Are you ready to dive deeper into these investment opportunities? We'd love to hear your thoughts in the comments!
