Analysts at TD Cowen think Canada is entering the end of 2025 “under a cloud of uncertainty,” with a soft labour market and negative second-quarter GDP growth pointing to “a deteriorating economic backdrop, though the household sector has nonetheless been more resilient than feared.”
“We see risks skewed to the downside given ongoing trade uncertainty and slowing population growth, though fiscal policy stands out as a potential offset,” said the firm.
In a research report released Thursday revealing its annual “Canada Best Ideas” list, which is considered the firm’s “highest-conviction” investment ideas, the analysts warned investors are being met with a “fairly weak” economy with growth expecting to be “just above zero” for the remainder of the year.
“We do not look for a recession, but the margin for error is razor thin,” they added. “Inflation pressures appear to be moderating, and as such we believe the conditions are in place to support two more Bank of Canada cuts this year. We see three key risks to our view: 1. Broadening tariff impacts 2. More fiscal stimulus 3. 2026 mortgage resets.
“Many of the risks facing the economy are to some extent two-sided. Take the tariff situation as an example: while there is clearly scope for the Canada-US trading relationship to deteriorate further, it’s also plausible that the two countries could resolve the recent dispute. Nonetheless, it seems likely to us that the full impact of U.S. tariffs has yet to be felt in Canada, as the trade outlook has been too volatile for businesses to fully adjust to the new reality.”
Given that turbulent backdrop, TD’s top stocks for the remainder of the year are:
Capital Goods/Industrials
* AtkinsRealis Group Inc. (ATRL-T) with a “buy” rating and $124 target. The average target on the Street is $113.45.
Analyst Michael Tupholme: “We see potential for an increase in already strong 2025 Nuclear rev. guidance, and expect a pickup in H2/25 ESR organic growth. We also expect further ESR margin improvement. With a strong balance sheet, management aims to deploy $1-1.5-billion toward acquisitions in the next 18 months. ATRL’s valuation discount vs. peers is not justified, in our view; we expect multiple expansion with solid execution.“
* Cargojet Inc. (CJT-T) with a “buy” rating and $160 target. Average: $142.
Analyst Tim James: “Cargojet is our Best Idea. It stands to benefit from eventual trade clarity. We believe most future trade scenarios support earnings that should drive shares much higher. It is currently at a 1.3-times discount on forward EBITDA (more than 1 times STD from 5-year average) to comps vs trailing 5-year avg of 0.3 times. Long-term agreements with global shipping heavyweights include price escalators and minimum volume guarantees.“
* Doman Building Materials Group Ltd. (DBM-T) with a “buy” rating and $11 target. Average: $11.
Analyst Kasia Kopytek: “DBM was acquisitive in 2024, which drove leverage higher and positioned the company as a leading treated lumber producer. There is unrecognized value in DBM shares in our view: even against a muted market backdrop, we model a deleveraging path with expected FCF yields of 11-13 per cent. The regular dividend (6-per-cent yield) rewards investor patience as a cyclical building products market recovery unfolds.”
* GFL Environmental Inc. (GFL-T) with a “buy” rating and $89 target. Average: $78.42.
Analyst James Schumm: “Recently accelerated M&A activity should drive upside to consensus 2026 revenue estimates. Additionally, we believe GFL has the largest opportunity to raise profit margins via self-help measures that could lift EBITDA $400-million from the current run-rate. These two catalysts should force a re-rating of the company’s unwarranted discount valuation.”
Consumer
* Gildan Activewear Inc. (GIL-N, GIL-T) with a “buy” rating and US$67 target. Average: US$63.98.
Analyst Brian Morrison: “The proposed acquisition of HanesBrands Inc. could prove a share price catalyst should Gildan’s EPS growth accelerate. HBI’s retail strength and Gildan’s industry leading cost structure create a diversified industry leader capable of market share gains and in turn strong EPS growth/FCF. We anticipate upward financial revisions to consensus and Gildan’s multiple gravitating to its average.“
* Maple Leaf Foods Inc. (MFI-T) with a “buy” rating and $47 target. Average: $38.64.
Analyst Michael Van Aelst: “An on-trend focus on protein coupled with industry-leading brands is driving above-average rev growth (relative to peers) for the CPG business. Combined with substantial investments in scale and automated processing, this is expected to deliver higher margins, significant FCF generation, B/S deleveraging, and return of capital to shareholders…all while returning valuation to historical averages.”
* Primo Brands Corp. (PRMB-N) with a “buy” rating an US$35 target. Average: US$34.20.
Analyst Derek Lessard: “After a strong positive 22-per-cent share price performance in 2024, the stock is down 20 per cent year-to-date (32 per cent from its 52-week high) due to integration-related service disruptions. However, service levels have rebounded, demand is healthy, and PRMB is taking share. With the stock trading at 8.8 times EBITDA (down from 12.5 times), compared to 18 times for its beverage peers, we think it offers a compelling risk-reward opportunity“
* Transcontinental Inc. (TCL-A-T) with a “buy” rating and $27 target. Average: $24.
Analyst Sean Steuart: “Our TCL Buy rating is supported by a robust underlying FCF base and a history of value-accretive capital deployment, including returns to shareholders, debt reduction, consistent capex, and opportunistic M&A. Our FCF yield estimates for TCL (2025E = 13 per cent; 2026E = 16 per cent) are the highest in our coverage universe. In our view, the company’s valuation discount is excessive given a compelling growth path.”
Energy, Power, Utilities
* Capital Power Corp. (CPX-T) with a “buy” rating and $69 target. Average: $67.50.
Analyst John Mould: “We believe CPX’s multiple points of potential exposure to growing demand for electricity (Alberta, PJM, recontracting) are attractive; its valuation is the lowest among Canadian IPPs (8.3 times 2026E EV/EBITDA). We take a positive view of CPX’s track record in assembling a high-quality thermal asset base critical for system reliability.“
* Cenovus Energy Inc. (CVE-T) with a “buy” rating and $27 target. Average: $27.54.
Analyst Menno Hulshof: “U.S. downstream TARs complete (approximately $900-million over 18-months), setting stage to showcase capability in Q3+. First of several FCF-generating projects now online (Narrows Lake); WWR tracking to first oil in Q2/26. We see 150mbbl/d of upstream growth and 15-per-cent less capex in 2026 triggering material FCF inflection. Unjustifiably discounted on our 2026 estimates and the only Integrated whose multiple compresses“
* Enerflex Ltd. (EFX-T) with a “buy” rating and $17 target. Average: $17.82.
Analyst Aaron MacNeil: “Enerflex offers investors direct exposure to the natural gas demand growth/export thematic, and is fundamentally mispriced, in our view. With challenges associated with the Exterran transaction now in the rear view, the business is beginning to show consistent performance driven by a positive natural gas macro, and we believe that the sum-of-the-parts value represents meaningful upside.“
* Pembina Pipeline Corp. (PPL-T) with a “buy” rating and $64 target. Average: $56.99.
Mr. MacNeil: “We acknowledge that Pembina has underperformed this year, and investor sentiment remains negative. However, we see a path to improvement in H2/25 and 2026, with the Alliance settlement and a seasonally challenging quarter in the rear-view, several growth opportunities in the pipeline, several high quality attributes, and a compelling valuation profile.“
* Prairiesky Royalty Ltd. (PSK-T) with a “buy” rating and $27 target. Average: $30.16.
Analyst Aaron Bilkoski: “We believe now is an opportune time to accumulate PSK given commodity price volatility, valuation relative to capital-intensive E&Ps, and FCF resiliency. We see tailwinds emerging from several high-growth liquids plays where the company holds strong royalty interest. Cash accumulating on the balance sheet (and no debt) in 2026E should allow PSK to lean into the NCIB or accretive acquisitions.”
Financial Services
* Brookfield Corp. (BN-N, BN-T) with a “buy” rating and US$83 target. Average: US$75.18.
Analyst Cherilyn Radbourne: “BN’s share price is up 16 per cent year-to-date, outperforming all of its subs except Brookfield Business Partners (BBU). Even still, the share price is assigning cents on the dollar to BN’s unlisted assets/carried interest. Our target price offers a healthy return of almost 25 per cent, but we could potentially add $8.00-$13.00 or 10-16 per cent by taking a more favourable view on certain aspects of our NAV (insurance, carry, RE).“
* IA Financial Corporation Inc. (IAG-T) with a “buy” rating and $158 target. Average: $153.71.
Analyst Mario Mendonca: “IAG has improving stability in investment income, lower new business strain, better morbidity and mortality experience, and improving conditions in US Dealer Services. Although IAG trades in line with peers (market-cap weighted average P/BV ex. CSM), strong capital generation, strength in WM (high ROE), and meaningful potential for buybacks support our call on IAG.“
* Onex Corp. (ONEX-T) with a “buy” rating and $148 target. Average: $136.
Analyst Graham Ryding: “We believe ONEX’s valuation is attractive (0.71 times P/NAV) given the improving fundamentals. We see several areas that could support share price upside. This includes potential for further PE portfolio realizations (NAV validation and proceeds for buybacks), strong credit platform momentum, an improving FRE outlook, and the sunset of multi-voting shares (MVS) in May 2026.“
* Trisura Group Ltd. (TSU-T) with a “buy” rating and $55 target. Average: $51.80.
Mr. Mendonca: “TSU is our best idea. TSU’s current 2.3 times P/BV presents an attractive entry point as investors realize that the Q4/24 exited lines charges were truly a one-time occurrence, management continues to prioritize low CRs and high-margin U/W income growth, and the company operates a defensive business model that delivers consistently high ROE.”
Health Care
* Well Health Technologies Corp. (WELL-T) with a “buy” rating and $7.50 target. Average: $7.04.
Analyst David Kwan: “With the stock down 7 per cent since its Q2 beat-and-raise a few weeks ago, we think the recent weakness is a great buying opportunity, particularly given several key near-term catalysts. Also, consensus/expectations for this year appear low to us (e.g., consensus Adjusted EBITDA is below guidance), which could lead to upward revisions ahead given WELL’s strong track record of execution.”
Materials
* Equinox Gold Corp. (EQX-T) with a “buy” rating and $15 target. Average: $12.74.
Analyst Wayne Lam: “We highlight EQX as one of our Canada Best Ideas with the company representing a turnaround story backed by the ramp up of two flagship Canadian assets. As outlined in our recent upgrade (see July 17: A New Beginning) we view re-rating potential on execution given discounted valuation and investor focus on assets in Tier I jurisdictions.”
* G Mining Ventures Corp. (GMIN-T) with a “buy” rating and $28 target. Average: $26.17.
Analyst Steven Green: “GMIN is uniquely positioned to outperform through its ability to buy, build, and operate mines with their proven in-house team. GMIN’s Oko West project, which is expected to drive the next leg of growth, received its final environmental permit earlier this week and is among the most attractive development projects globally, with upside potential in our view.“
* Lundin Mining Corp. (LUN-T) with a “buy” rating and $19 target. Average: $17.13.
Analyst Craig Hutchison: “We believe that LUN’s recent relative outperformance could continue, driven by their ability to track well to current copper guidance, combined with a solid gold business, strong balance sheet, and copper growth pipeline. LUN shares gained momentum after two solid quarters in a row, which is in contrast to many of their peers who have had operational issues.”
* Royal Gold Inc. (RGLD-Q) with a “buy” rating and US$237 target. Average: US$220.
Analyst Derick Ma: “RGLD is positioned to outperform as it benefits from three significant recent transactions. The pro forma company will be in a much stronger position to compete with its larger peers. Pro forma RGLD benefits from (1) increased scale and cash flows to fund future deals, (2) a more robust long-term growth outlook, and (3) reduced single asset concentration.”
Real Estate
* Boardwalk REIT (BEI-UN-T) with a “buy” rating and $87 target. Average: $84.01.
Analyst Jonathan Kelcher: “Boardwalk is our pick for Canada Best Ideas. With a portfolio overweight in AB/SK markets that should outperform, we see a long runway for favourable fundamentals to translate to sector leading earnings growth. Combined with BEI’s low payout ratio which gives balance sheet flexibility, we expect sector leading NAV growth to continue, which we believe is not fully reflected in BEI’s valuation.“
* First Capital REIT (FCR-UN-T) with a “buy” rating and $22 target. Average: $21.42.
Analyst Sam Damiani: “FCR remains a high-conviction pick for us based on its ability to deliver above average growth from its largely necessity-based tenants. Q2 results added further confirmation of market rents being squeezed higher, with the lack of new supply providing a long runway for sustained rent growth. We see today’s premium multiple as well-deserved, with further room to run.”
Technology, Media and Telecom
* Rogers Communications Inc. (RCI-B-T) with a “buy” rating and $58 target. Average: $53.17.
Analyst Vince Valentini: “As the largest wireless carrier in Canada, Rogers has the largest percentage of consolidated revenue derived from wireless and it should benefit as pricing stabilizes. Additionally, the sale of sports assets could unlock $10/share that is not attributed in the share price. Meanwhile, RCI.B is less expensive versus peers and should close the valuation gap against BCE/T.”