Analysts Warn of Weakening Advertising Market

As the earnings season approaches for Canadian media companies, RBC Dominion Securities' Drew McReynolds shared concerns over a potential economic downturn fueled by tariffs. He notes that the current environment offers limited options for hiding from valuation risks, with the prospect of diminished advertising spend becoming increasingly likely.

McReynolds declared, "Tariff-driven uncertainty has drastically cut earnings visibility among diversified media firms, leaving us cautious about stock recommendations. As we head into 2025, we suspect advertisers will tighten budgets, especially if a recession occurs in 2025 or 2026." Other analysts also echoed worries about an impending advertising slowdown, contrasting sharply with more optimistic sentiments from the previous earnings season.

Key Adjustments in Target Prices

In light of the forecasted slowdown, several target price adjustments have been made, including:

* **Spin Master Corp.** - Target cut to $32 from $41, citing significant tariff impacts on earnings visibility. * **Stingray Group Inc.** - Target raised to $12 from $11, pointing to new revenue opportunities like retail media and FAST channels. * **Thomson Reuters Corp.** - Target adjusted to US$182 from US$177 as revenue growth expectations rise. * **VerticalScope Holdings Inc.** - Target lowered to $9 from $10, addressed the growing need for authentic content.

Negative Outlook for Tech Services Amid Economic Woes

Scotia Capital's Divya Goyal has taken a bearish stance on North American technology services companies. She mentioned, "Given ongoing macroeconomic uncertainties, we anticipate lackluster growth across sectors aligned with global enterprises, leading to lower target prices across the board."

New Bullish Coverage on SmartStop Self Storage REIT

National Bank Financial has initiated its bullish coverage of SmartStop Self Storage REIT, highlighting an exciting growth opportunity, particularly in Canada. The REIT recently raised around US$932 million through a notable IPO and aims to take advantage of the undersupply of storage facilities in Canada.

Analyst Matt Kornack forecasts further expansion into Canada, expecting positive earnings growth driven by a strengthened balance sheet and a diversified portfolio. He set a target price of US$39 per unit.

Potential Upside for Kraken Robotics

Desjardins Securities analyst Benoit Poirier sees optimistic prospects for Kraken Robotics following a successful quarterly performance and promising guidance for 2025. With revenues expected to exceed prior estimates, Kraken's subsea battery business and prospective new clients are key growth drivers.

Alaris Equity Partners and Other Adjustments

Desjardins' Gary Ho anticipates continued growth for Alaris Equity Partners ahead of their upcoming report. Adjustments have been made across various firms, including Chemtrade Logistics and Magna International, advised by market uncertainties that have impacted their performance outlooks.

In summary, analysts are adjusting their expectations across multiple sectors as economic uncertainties loom, with varying degrees of optimism and caution influencing the market landscape.