Market Overview: Key Analyst Actions

In today's roundup of critical analyst actions, Air Canada (AC-T) takes center stage as National Bank Financial's Cameron Doerksen lowers his rating from 'Outperform' to 'Sector Perform.' While he acknowledges that the airline's valuation is attractive, he cites headwinds that could dampen share price growth in the near term.

Doerksen warns that Air Canada's upcoming third-quarter results, expected on November 4, could be negatively impacted by a recent Flight Attendant strike. He sees the potential for lower earnings, reducing his EBITDA estimate from $1.3 billion to $913 million, explaining that yield erosions and operational costs from the strike will play a significant role.

Challenges Ahead for Air Canada

The analyst points to a concerning trend: while air travel in Canada held steady through summer, rising unemployment and low consumer confidence in Canada may trigger a downturn in travel demand. Looking forward to 2026, Doerksen flags labor-related risks, as Air Canada has faced disruptions in two consecutive years.

His new target price for Air Canada shares is reduced to $22 from $26, still below the Street average of $25.54. He notes the airline trades at a significant discount compared to its peers, reflecting ongoing uncertainties.

Open Text Corp. Gets an Upgrade

On a brighter note, Scotia Capital's Kevin Krishnaratne has upgraded Open Text Corp. (OTEX-Q, OTEX-T) to 'Sector Outperform.' He cites a strong outlook for its Content Management business, which make up about 40% of revenue, as a hidden gem. Krishnaratne is optimistic that upcoming changes in leadership and a shift in strategy will enhance the company's growth prospects.

He has raised his target for Open Text shares from $35 to $50, which surpasses the current average of $36.84.

Bullish Calls for Precious Metals

Analysts at National Bank Financial are bullish on precious metals, attributing this to factors like political uncertainty and persistent inflation. They revised gold price targets up to an astounding $3,750 per ounce, with silver projected at $42.50, evidencing unprecedented demand.

Stocks such as Alamos Gold (AGI-T), Artemis Gold (ARTG-X), and Barrick Mining (ABX-T) received upgrades based on favorable operational performances and promising growth forecasts.

Infrastructure Spending: A Golden Opportunity

National Bank's Maxim Sytchev predicts a surge in Canadian infrastructure spending due to a supportive federal government stance and looming 'nation-building' projects. He sees potential capital expenditures reaching $400 billion, offering significant investment opportunities, especially in construction and heavy equipment sectors.

Valuation gaps between Canadian and U.S. players are expected to narrow, promising potential growth for companies positioned favorably.

New Horizons for Dominion Lending Centres

Canaccord Genuity's Matthew Lee is optimistic about Dominion Lending Centres Inc. (DLCG-T), initiating coverage with a 'buy' rating and a target of $11.50. With homeownership intricately tied to mortgage financing in Canada, the rising trend of consumers using brokers for mortgage advice bodes well for DLCG's growth.

Analysts believe this company has all the right tools to drive revenue growth amid a sluggish housing market.

Groupe Dynamite: A Retail Star in the Making

Also catching attention is Groupe Dynamite Inc. (GRGD-T), as National Bank's Vishal Shreedhar highlights strong same-store sales and growth potential. With a raised target of $66, he emphasizes that the company could see further multiple expansions if performance continues to shine.

Overall, the market is witnessing dynamic shifts, making it a crucial time for both investors and analysts alike!