Dividend increases ahead for these utilities

Globe and Mail

5 days ago

Daily roundup of research and analysis from The Globe and Mail's market strategist Scott Barlow
RBC Capital Markets analyst Paul Treiber published an earnings preview and top picks in the domestic technology sector,
'Our view: We are previewing calendar Q2 earnings for 12 stocks in our coverage universe. As part of our preview, we are raising our price target and estimates on Celestica [from $120 to $185]. We believe the macro environment was largely stable and IT/software demand was sustained through the quarter. Therefore, we expect Q2 results to be largely in line with consensus for the majority of our coverage and we expect most companies to reiterate 2025 guidance. In light of the more resilient than expected environment, valuations of Canadian tech stocks rebounded sharply during the quarter. Among our covered stocks, we believe the best positioned stocks for calendar Q2 are Kinaxis, Coveo and Shopify.'
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CIBC analyst Mark Jarvi is looking for a solid quarter for regulated utilities and more mixed results from power companies,
'We expect updates/questions on how evolving U.S. clean energy policy and tariffs are impacting growth outlooks—that said, we believe most firms remain in a good position and Power stocks are on a positive uptrend. With this note, we also roll out our 2027 estimates and make two rating changes—FTS to Outperformer and CWEN to Neutral. Variances Vs. Consensus: We're >5% above consensus for AQN, EMA and H. We're >5% below for BLX and NPI … we believe weak wind across key regions in Europe will weigh on BLX's and NPI's Q2 results (both >5% below consensus; could see consensus come down before both report). For other firms, generation conditions were generally soft, but not enough to drive material variances with consensus … we believe TA could post modestly stronger results vs. consensus. We expect a 1.5% quarterly dividend increase for CWEN, a 6% annual dividend increase for CPX, and CPX should revise its 2025 guidance upwards to reflect the closing of the recent PJM acquisition … We are above consensus for H, which should benefit from strong load demand in Ontario. On the regulatory front, EMA's plans for new rates at NSPI and the delay in hearings for the NMGC sale will be key to track as are multiple rate cases for AQN (Empire is key). CU/ACO.X's Yellowhead Mainline Pipeline should also have its need application approved soon … We've increased our price target for BEP to $31 (was $30) on hydro pricing uplift and NPI to $29 (was $28) to reflect derisking of Hai Long & Baltic Power); we've trimmed our target for H to $51 (was $52), after we rolled forward our utilities' valuation (now use the average of our '26 and '27 EPS estimates) and updated P/E multiples'
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Scotiabank analyst Nat Schindler identified the first real monetization trend for AI,
'AI excitement has yet to subside. Meta has dominated headlines with acquisitions and datacenter plans. Meta has been the strongest performer (up ~34% during Q2), with Google at ~19%, and Amazon rounding out the three at ~14%. As tariffs and ad spend worries have subsided, focus has returned to AI monetization, with coding front and center. Within AI as a whole, coding has emerged as the first and largest true monetization potential for AI, and the method of charging for tokens has offered differentiation from a simple subscription model. For us, Google still remains the best-positioned of the three names we cover, given the user-facing surfaces and AI embedded in each. Amazon has dominant enterprise distribution via AWS and is expanding its vertical integration into customer chips and partnerships like Anthropic. Lastly, we do see a path forward with Meta regarding increased ad ROI driven by better targeting, but given the huge spend, we will need to see a stronger monetization strategy before getting more positive. Our price targets come up on multiple re-rating.'
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BMO mining analyst Matthew Murphy surveyed his sector and presented top picks,
'Copper ended Q2 up ~4% on the quarter with the positive movement masking what was a significant round-trip with a maximum drawdown of 10% during the quarter. The impressive turn-around for copper since mid-April on the back of reduced recession fears allowed the equities to re-rate higher. Our copper equities managed a 30% return on the quarter, led by HBM and ERO up almost 40%, while returns for TECK were relatively more modest, up 11%. MTAL was subject to an acquisition offer … We would flag our below-consensus estimates on two names: HBM where the impact of Q2 wildfires on Manitoba production and costs is likely driving the softness in our numbers versus consensus, and TECK where the potential combination of a challenging quarter for sales from QB (port was down for part of the quarter), mill issues at Andacollo, and lost productivity due to safety reviews at Antamina may be driving our estimates below consensus. We continue to prefer TECK as we still see an opportunity for operating performance to inflect positively in H2/25'
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