Analyst Upgrades and Downgrades: What You Need to Know!

In the fast-paced world of finance, analyst ratings can greatly influence stock movements. Here's a breakdown of some key upgrades, downgrades, and notable price target changes from industry experts.

Onex Corp. (ONEX-T): A New Buy Recommendation

TD Cowen analyst Graham Ryding has made headlines by upgrading Onex Corp. from "hold" to "buy," with a noticeable jump in his price target from C$111 to C$140. This bullish stance followed a quarterly report that Ryding described as "good on several fronts." Key reasons for optimism include strong fundraising activities and an improving outlook for free-related earnings. The average analyst price target now reads C$141, showing that confidence is returning around this holding company.

Stantec Inc. (STN-T): A Valuation Play

Canaccord Genuity’s Yuri Lynk has also upgraded Stantec Inc. from "hold" to "buy," raising his price target to C$135 from C$125 after a solid third-quarter performance. Despite Stantec’s shares underperforming their peers this year, Lynk emphasizes the company's improving fundamentals, including a projected 18% increase in adjusted EPS and strategic growth plans for 2024. With an average analyst target of C$130.32, it seems Stantec is one to watch!

Canadian Apartment Properties REIT (CAR-UN-T): Analysts Turn Cautious

In contrast, Canadian Apartment Properties REIT is facing scrutiny as at least five analysts have lowered their price targets following disappointing quarterly results. The consensus suggests a cautious approach with one analyst stating, "an active capital rotation program in Canada and Europe over the next 12-18 months could constrain CAPREIT’s unit growth." The average target now stands at C$56.53, signaling a shift in investor sentiment.

Docebo Inc. (DCBO-T): A Sector Downgrade

ATB Capital Markets analyst Martin Toner downgraded Docebo Inc. from "outperform" to "sector perform" due to valuation concerns. Despite reporting a Q3 revenue of $55.4 million, impressive compared to expectations, Toner felt the stock had surged too quickly—up 21% in the past month—making the downgrade prudent. Nonetheless, he remains optimistic about long-term growth potential in IT spending.

Constellation Software Inc. (CSU-T): Slower Growth Ahead?

Constellation Software, while still reaping solid revenues of C$2.54 billion, might find its growth trajectory below the historical 20-30% range through 2025. TD Cowen analyst David Kwan raised his price target to C$4,800 but cautioned about the need for significant acquisitions to maintain high growth rates.

Definity Financial Corp. (DFY-T): Time to Take Profits?

Scotiabank analyst Phil Hardie is advising caution with Definity Financial, downgrading it from "sector outperform" to "sector perform." Though the company recorded impressive results, its stock's roughly 50% rise over the past year suggests limited room for further gains. The average price target remains at C$58.60.

Canopy Growth Corp. (WEED-T): Struggles Continue

Canaccord analyst Matt Bottomley slashed his price target on Canopy Growth Corp. to C$2.50, reiterating a "sell" rating. He describes the company’s quarterly performance as muted, raising concerns about cash flow and the potential need for equity raises to sustain operations.

Galaxy Digital Holdings Ltd. (GLXY-T): A Silver Lining

In more uplifting news, ATB Capital Markets analyst Martin Toner has substantially increased his price target for Galaxy Digital Holdings to C$30 from C$20 following impressive quarterly results. Despite reporting a net loss, the company’s trading performance and new partnerships are encouraging signs of resilience.

Telus Corp. (T-T): Modest Optimism

RBC’s Drew McReynolds cites a solid earnings report from Telus, raising his price target to C$26. While the company faces challenges in its digital sectors and competition remains stiff, its long-term outlook appears favorable, bouncing back with projected strong EBITDA and free cash flow growth.

Summary of Other Notable Analyst Actions

Bank of America: Citigroup raises target price to US$54 from US$46, upgraded to “buy.”

Brookfield Corp.: TD Cowen increases target to C$74 from C$63, noting a favorable market backdrop.

Enbridge Inc.: Barclays raises target price to C$59 from C$54, showcasing confidence in future performance.

In a volatile market, staying informed about analyst actions can provide valuable insights for investors. Keep your eyes peeled for these changes as they could lead to opportunities or risks in your investment portfolio!