Scotia Capital Raises Target With companies in his Industrial Products coverage universe continuing to see share price appreciation through the end of the third quarter alongside support for “further multiple expansion,” Scotia Capital analyst Jonathan Goldman sees “a number of positive themes emerging – acceleration of nation-building projects, increased defence spending, synchronized rate easing cycle, elevated commodity prices, visibility on trough earnings.”
However, in a research report title Party Like It’s 1999?, he also warned “a lot of potential upside is already priced-in, particularly for the equipment dealers and consumer cyclicals.”
“Moreover, we believe markets are minimizing risks related to ‘tariff-push’ inflation and USMCA renegotiation in 2026. Our advice is to position for the cheaper names (ADEN, ATS, NFI, SJ), event-driven catalysts (CEU, TVK), or companies with lots of B/S optionality and willingness for M&A (E&Cs),” he added.
The analyst’s other target revisions are: * Toromont Industries Ltd. ( “sector perform”) to $171 from $140. Average: $152.22.
Analyst: “For TIH, we struggle with valuation, which has expanded 6 times year-to-date to 24.2 times P/E (NTM [next 12 months]), compared with the company’s 10-year average of 20 times. Part of that is warranted, in our view, given exposure to data centres via AVL and CIMCO, which provides data centre cooling solutions. The company is doubling capacity at AVL, which we believe is significantly margin accretive, while we forecast CIMCO growing at a 15-per-cent CAGR [compound annual growth rate] over the next two years. However, we believe a larger portion of the re-rate is driven by supply and demand factors as Toromont is considered a flight to safety and there is a paucity of high-quality cyclicals in Canada with a stellar track record and enormous B/S optionality. We raised our target price to $171/share (from $140/share) supported by a higher valuation multiple.”