How Canada’s defence spending could boost this stock, why the bar is high for Canada’s big banks and more from The Week in Stocks.

Stock of the week: OceanaGold Corp.

Analysts at National Bank of Canada Capital Markets and RBC Capital Markets have priced in an 81 per cent increase in shares of OceanaGold Corp. (OGC:TSX), reinforced by the results released May 12 of ongoing exploration at the company’s Haile gold mine in South Carolina. National Bank and RBC have a price target of $76 and $78, respectively. Shares closed Friday at $43.07. Haile is Oceana’s largest-producing asset, the Vancouver-based company has said. National Bank analyst Don DeMarco said in a note on May 12 that prospects have improved since the company announced it will transition from open pit to underground mining. “Our thesis is supported by significant near-term production and EBITDA (earnings before interest, taxes, depreciation and amortization) growth and a robust balance sheet,” DeMarco said. TD Cowen analysts Wayne Lam and Jennifer Mao have a price target of $56 after visiting the Haile mine, noting that open pit operations “are performing well as the mine enters peak years of the current plan” and that the switch over to underground will support future operations. OceanaGold has a 12-month price target of $64.95 based on the calls of 11 analysts, according to Bloomberg.

Keeping score

Canada’s defence imperative boosts Calian Group, Desjardins says

Calian Group Ltd. (CGY:TSX) shares soared 21 per cent on May 14 on earnings that beat estimates on several metrics including revenue. The Ottawa-based defence, space, health and infrastructure services company’s revenue rose 18 per cent year over year, coming in at $229 million versus consensus of $215 million. “Overall, we anticipate a positive market reaction to the big beat across the board and strong margin and organic growth performance which was driven by the defence and space segment (exactly what the market wants to see),” Benoit Poirer, an analyst at Desjardins Group, said in a note on May 14, hiking his price target to $90 from $83. Shares of Calian closed Friday at $80.64. Despite the stock’s jump this week, Poirier said there exist several areas of “untapped” value, including room on the company’s balance sheet to add $400 million in revenue from mergers and acquisitions giving the shares a potential value of $107. For investors who are queasy about banking on unannounced M&As, there is more upside to be had from organic growth alone, especially from increased defence spending, Poirier said, adding that Calian is one of Canada’s few fully sovereign defence companies. Calian has a 12-month price target of $90.80 based on the calls of five analysts, according to Bloomberg.

The bar is high for Canada’s big banks, says Scotiabank analyst

Canada’s big banks start reporting earnings next week with Bank of Nova Scotia, National Bank of Canada and Bank of Montreal first out of the gate, with market expectations high. “ With valuation multiples increasingly stretched, we are a bit cautious on the group in the near-term, and we see some potential downside if results don’t live up to lofty expectations,” Mike Rizvanovic, a Scotia Capital analyst said in a note on May 14, referring to recent strong stock performance that has already baked in earnings per share (EPS) to come in comfortably ahead of consensus expectations. Loan losses, which could change sentiment on the group, are the danger area, he said. For now, Rizvanovic said he believes they are “manageable.” For the quarter, Scotia Capital expects EPS to come in seven per cent lower than the previous quarter but to expand year over year, a “modest uptick” in provisions for credit losses and loans and strong gains in capital markets. For investors looking to position themselves ahead of the quarterly results, his top picks are Royal Bank of Canada (RY:TSX) and National Bank of Canada (NA:TSX), the latter on expectations that EPS will beat expectations on capital markets performance and the former on the belief that it “provides investors with a bit of downside protection … if the group sees some selling pressure.”

Price target hikes, cuts and holds and more

  • TD Cowen analyst Vince Valentini hiked his price target for Quebecor Inc. (QBR/B:TSX) to $69 from $63 on strong revenue growth in the wireless division and and an improving trend in broadband. Shares closed Friday at $65.36.
  • Raymond James analyst Michael Barth hiked his price target to $67 from $65 for Keyera Corp. (KEY:TSX) on a strong balance sheet, “tailwinds” from marketing services to the oil and gas sector and room to pursue deals, growth or shares buybacks. Shares closed Friday at $57.26.
  • TD Cowen analyst Jonathan Kelcher maintained his price target of $39 for Extendicare Inc. (EXE:TSX) — a top performer amongst the stocks he covers — on increased estimates following the completed acquisition of CBI Home Health LP. Shares closed Friday at $33.32.
  • RBC Capital Markets analyst Irene Nattel cut her price target for Pet Valu Inc. (PET:TSX) to $26 from $27 after the company cut its guidance for 2026, but said in a note that the shares at their current level still represent an opportunity. Shares closed Friday at $17.67.
  • CIBC Capital Markets analyst Ty Collin hiked his price target for NFI Group Inc. (NFI:TSX) to $27 from $22 on North American production that is “on track,” an improved balance sheet and better than expected profitability. Shares closed Friday at $20.80.
  • National Bank of Canada Capital Markets analyst Baltej Sidhu maintained his price target of $20 for Polaris Renewable Energy Inc. (PIF:TSX) after it received final regulatory approval from Puerto Rico for a battery storage system. Shares closed Friday at $12.48.
  • Scotia Capital Markets analyst Mike Rizvanovic cut his price target for Manulife Financial Corp. (MFC:TSX) to $56 from $57 on an earnings-per-share miss and other concerns, including a miss in its Canadian segment. Shares closed Friday at $51.72.
  • This TSX stock is up 43% in April and price target hikes are rolling in as analyst calls out ‘unwarranted’ discount to peers
  • ‘Bullish on the fundamentals,’ analysts see 17% upside to this TSX stock

Every week, the Financial Post breaks down the most interesting developments in the week’s world of investing, from top performers to surprising analyst calls and stocks to have on your radar.

Are you an investor looking for stock ideas and market insight? Sign up for the weekly FP Investor Newsletter here to get the best of the Financial Post’s investing news, analysis and expert commentary straight to your inbox.

• Email: gmvsuhanic@postmedia.com