Canadian real estate's post-COVID recovery is a slow, uneven battle, according to analysts. National Bank's Kornack and Thornhill highlight the lingering effects of the pandemic, with winners still feeling the benefits of a zero-interest rate environment and losers rebounding from pandemic-induced weakness. The REIT index, up slightly year-to-date, reflects this mixed picture. Analysts predict 2026-2027 as transition years, with investors seeking signs of positive or negative inflection points. Apartments may see improving leasing spreads, while seniors' rent increases hinge on stabilizing occupancy and margins. Retail shows modest growth, but office recovery stretches beyond forecasts. The analysts suggest investors favor companies with strong near-term operations, as broader capital allocation to REITs remains limited. They favor diversified retail/storage, industrial/apartments, and seniors' REITs, with office and diversified REITs trailing. Aggregate valuations appear reasonable, with potential for slight multiple expansion.
But here's where it gets controversial: Quebecor's Freedom Mobile maintains momentum despite Black Friday discounts, with strong wireless subscription additions and positive ARPU growth. TD Cowen's Valentini raises his target for Quebecor shares, but questions the sustainability of its outperformance. He highlights the company's effective management of capex and FCF, and the potential for further growth through MVNO offerings and its Fizz wireless brand. However, he also notes the aggressive pricing strategies of competitors, which may impact future estimates and share price appreciation.
Laurentian Bank's agreement to be taken over by Fairstone Bank is viewed positively by RBC's Mihelic, representing 72% of LB's Q4/25 tangible book value. Despite weaker-than-expected Q4/25 results, Mihelic upgrades Laurentian to 'sector perform' from 'underperform', with a target price of $40. Other analysts also recommend tendering into the offer, citing reasonable upside and high probability of transaction closing.
Canadian banks' Q4 earnings reports bring mixed reactions. RBC's Mihelic adjusts targets for Bank of Montreal, Canadian Imperial Bank of Commerce, EQB Inc., and Toronto-Dominion Bank, citing various factors. Desjardins' Li expects Dollarama Inc. to report solid results, emphasizing its strong value proposition and premium valuation. National Bank's Terentiew sees Endeavour Silver Corp. in a strong cash position after its recent offering, maintaining an 'outperform' rating. Jefferies' Tariq downgrades Ero Copper Corp. and Ivanhoe Mines Ltd. to 'hold', citing valuation concerns and potential delays in operations.
