Following Monday’s announcement of an increase to its full-year production guidance and an expanded capital program for the second half of 2026, National Bank Financial analyst Dan Payne believes Surge Energy Inc. (SGY-T) is “opportunistically expanding its annual capital investment and associated shareholder returns,” highlighting “the strength in commodity prices and continued execution & momentum of its ongoing capital program.”
“Notably, prevailing and projected commodity prices are substantially ahead of its initial budget expectations (i.e., $80/bbl vs. $65/bbl), which supports the company in pursuing this targeted acceleration,” Payne said in a client note. “With that, the company is expanding its capital budget by 15-20 per cent ($25-million) to $175-million, which should generate 5-per-cent annualized growth (from flat prior; expanded exit to 24 mboe/d from prior 23 mboe/d) within the context of a 55-per-cent payout ratio (from 60 per cent prior), with an implied incremental FCF yield of 15 per cent (from 10 per cent prior).”
“Importantly, the outcome of free cash to shareholder returns is notable, where that FCF yield is now explicitly being redirected to its 5-per-cent cash yield, with an incremental 3-4 per cent being returned through its strategic buyback ($5-million per month being returned), and the residual being redirected through continued deleveraging.”
Payne sees the Calgary-based company’s incremental investments supporting “the strength of its sustainable fundamentals, which paired with its expansive inventory (+900 locations, +12-year duration), serves to support the long-duration nature of free cash flow generation being validated within its portfolio.”
Maintaining his “outperform” rating for Surge shares, the analyst raised his target to $13.50 from $12.75 to reflect “the augmented pace of development and outcome of sustainable returns noted through its revised outlook.” The average target on the Street is $10.
Desjardins Securities analyst Frederic Tremblay sees Denver-based York Space Systems Inc.’s (YSS-N) announcement of the acquisition of Solestial highlighting “the strategic importance of space-grade solar power,” which he thinks is “a positive readthrough” for 5N Plus Inc.-owned (VNP-T) AZUR Space.
Accordingly, he emphasized the pending SpaceX IPO is not the only development “catching [his] attention.”
“York emphasized supply chain resilience amid rising power needs, reinforcing our confidence in AZUR as a proven leader in high-efficiency multi-junction solar cells for space applications,” he said. “Supply remains tight and concentrated among a limited set of providers. III-V cells (produced by AZUR and peers) remain the preferred choice (90-per-cent share) for high-performance missions requiring efficiency and reliability. Peers SolAero (Rocket Lab) and Spectrolab (Boeing) are vertically integrated, which may limit their availability to third parties. By contrast, AZUR’s independent model is a differentiator, positioning it as a preferred supplier for satellite OEMs. Overall, market capacity for space solar cells is constrained, with lead times exceeding two years, which reflects the limited number of scaled manufacturers and disciplined capacity expansion tied to backlog (avoiding overcapacity). Combined with demand for space solar cells expected to grow at a 10–12-per-cent CAGR (increases in satellite deployments, onboard power requirements, as well as commercial and defence activity), we envision a favourable pricing environment.”
Tremblay thinks investor interest in SpaceX has “contributed to valuation expansion across the broader space ecosystem.” “That said, valuations in the space sector have been volatile, with performance increasingly driven by event-based catalysts (eg SpaceX IPO developments, Blue Origin incidents). While some of the thematic enthusiasm around space investing may moderate over time, we do not view AZUR (or, more broadly, VNP) as a purely sentiment-driven or speculative story,” he added. “Rather ... the investment case is underpinned by durable secular tailwinds, as well as strong visibility via bookings and backlog. Accordingly, our valuation framework continues to reward VNP as visibility improves on the company’s strategic positioning within critical supply chains (eg space solar power, terrestrial solar power, health and pharma) and on the multi-year growth trajectory of its Specialty Semiconductors segment. This is particularly evident in space solar power (supported by AZUR’s capacity expansion initiatives) and in terrestrial renewable energy (via contracted volumes with First Solar across 2025–26 and 2027–28).”
Reiterating a “buy” rating for Montreal-based 5N Plus, Tremblay raised his target to $50 from $43. The average is $44.50.
“Despite valuation volatility, we do not view VNP as a purely sentiment-driven story. Our valuation framework continues to reward VNP for visibility improvements on its strategic role within critical supply chains, particularly in space solar power (AZUR’s expansion) and in terrestrial renewable energy (First Solar contracts). Our target increase to $50 is based on 24 times EV/EBITDA on our 2027E EBITDA (was 21x), supported by: (1) York-Solestial readthroughs; and (2) valuation benchmarks across space and non-space equities,” he explained.
Citi analyst Joanne Wuensch sees Bausch + Lomb Corp.’s (BLCO-N, BLCO-T) “seeing its pipeline strategy play out across the entire portfolio, investing in high-unmet-need areas where there is either no available treatments or where management can change the treatment paradigm.”
She met with the Vaughan, Ont.-based company’s management as part of its R&D Teach-In Series, which focuses on innovation in its Vision Care franchise, with discussions focused on two of the company’s “most innovative technologies” in contact lenses - its bioactive Project Halo lens material and novel myopia management lenses.
“Project Halo represents the first substantial disruption in contact lens material science since the introduction of silicon hydrogel (SiHy) in 1999,” she explained. “Management has designed this bioactive lens material ‘from the inside out with the user in mind,’ aiming to address key challenges like discomfort and end-of-day dryness, which contribute to the current 20-25-per-cent drop-out rate of new contact lens users (within the first year). Project Halo is a daily lens fundamentally different than hydrogel and SiHy lenses, using hyaluronic acid (HA) as the ‘backbone’ of the lens material; Halo is ‘bioactive’ as the HA is recognized and released by a naturally occurring enzyme, providing continuous hydration throughout the day. The material also provides oxygen permeability (or breathability) on par with leading daily SiHy lenses on the market. Management also highlighted Halo’s soft and smooth surface, which cushions the interaction between the eye, eyelid, and lens, plus reduces friction. It has conducted its first external performance study and plans to initiate its second study in the 2H26. Assuming positive results, management then plans to initiate its registrational study in 2027 to support FDA approval in 2028.”
“Growing the pie, with a bigger slice. With Halo, management’s goal is to both grow the size of the contact lens market globally and take greater market share. Halo’s differentiated material should advance this goal in three ways by: 1) reducing the new wearer drop-out rate; 2) bringing in new wearers to the market; and 3) re-engaging patients who ‘silently’ dropped out of the category and are looking to get back in. Management does not anticipate Halo will cannibalize the daily SiHy market immediately considering there remains substantial unmet need globally. Halo will be produced on existing low-cost manufacturing lines, minimizing capital investment and driving higher gross margins immediately. This should give management ‘flexibility’ around striking a balance between pricing and adoption, emphasizing that it wants to make Halo a ‘lens for everybody.’”
Wuensch says Bausch’s myopia management lens “leans on recent scientific breakthroughs in myopia progression to provide a differentiated offering focused on customizing and titrating treatment for individual needs.”
She reaffirmed a “buy” rating and US$19 target for the company’s NYSE-listed shares. The average is US$18.67.
When Transcontinental Inc. (TCL.A-T) releases its second-quarter financial report on Wednesday, RBC Dominion Securities analyst Ryland Conrad expects results to be weighed down by difficult year-over-year comparisons.
He’s projecting consolidated revenues and EBITDA of $280-million and $43-million, respectively, down 59.1 per cent and 60.2 per cent from the same period a year ago due largely to the late 2025 sale of its Packaging business to ProAmpac Holdings Inc.
“We expect year-over-year performance in Q2/26 to primarily reflect a tough year-over-year comparable (particularly in book printing) with management indicating with Q1/26 results the expectation of lower adjusted EBITDA year-over-year prior to improved performance in H2/26,” said Conrad. “We believe the key issues in focus this quarter include: (i) the outlook for in-store marketing (ISM) including the integration/contribution from recent tuck-in acquisitions (Middleton, Canva, PDI) and the potential for additional M&A; (ii) an update on the potential financial impact from the national expansion of raddar; (iii) the extent to which business development initiatives could benefit book printing; and (iv) any changes to the current F2026 outlook, which includes modest negative organic revenue growth and stable adjusted EBITDA (proforma the sale of Packaging).”
Moving forward, the analyst sees “returning to growth remains the primary catalyst for the stock.” “Following the sale of Packaging, the focus has shifted to the extent to which the remaining asset mix (Retail Services and Printing, Media/Educational Publishing) can return to sustained positive revenue and EBITDA growth, which in our view, remains the primary potential re-rating catalyst for the stock,” Conrad explained. “For F2026, management expects organic revenue growth to be slightly negative year-over-year with EBITDA largely stable. While the timing of any inflection point on growth remains unclear to us, we would not rule out F2027 reflecting the likelihood of additional growth-accretive tuck-in acquisitions within In-Store Marketing (ISM), the potential absence of Canada Post strike impacts, the realization of corporate cost reductions following the sale of Packaging, and other pockets of growth (raddar, Media, book printing). In the meantime, we expect investors to continue to benefit from ongoing capital returns (dividends, share repurchases) building upon what have been two special dividends amounting to $21/share paid over the F2024-F2026 period (including a reduction of stated capital).”
He reiterated an “outperform” rating and $9 target for Transcontinental shares. The average is $10.71.
