Thursday’s analyst upgrades and downgrades

The article is a broad analyst-actions roundup, led by upgrades for Finning International and Franco-Nevada on improving earnings trajectories, strong backlog/asset-level optionality, and more attractive valuations. Finning was upgraded to outperform with a target raised to $115 from $89 after Q1 net revenue of $2.5B and backlog of $3.8B, while Franco-Nevada was upgraded to outperform with its target lifted to $420 from $410 after adjusted EBITDA of US$591.9M and EPS of US$2.38 beat estimates. The piece is more mixed for names like Power Corp. and Goeasy, where valuation and credit concerns prompted downgrades or target cuts, while Boyd Group, Constellation Software, Hydro One, Manulife and Torex also saw mostly incremental target revisions.

Analysis

The common thread is not just better earnings, but higher visibility converting into multiple expansion for capital-intensive names with underappreciated duration. Finning and Franco-Nevada are the cleanest examples: both have a growing annuity-like tail embedded in assets already on the ground, which usually matters more to stocks than quarter-to-quarter beats once backlog/production inflects. The market is still discounting cyclicality, but the setup is shifting toward a longer earnings runway, which tends to re-rate faster than consensus expects when the driver is installed-base utilization rather than new end-market demand.

The bigger second-order loser is the levered consumer-credit complex. Goeasy is not simply facing weaker credit; it is facing a credibility overhang that can suppress funding flexibility, valuation, and growth simultaneously. That combination is dangerous because it creates a self-reinforcing loop: tighter funding slows originations, which pressures scale economics, which keeps credit costs elevated, which further constrains liquidity. In this kind of repair story, the stock usually bottoms well before the fundamentals do, but only once investors gain confidence that losses are peaking and controls are genuinely fixed.

Boyd looks like a classic expectation reset rather than an operating break, and that is where the opportunity is. If industry data continue to support elevated total-loss frequency and a steady normalization of fleet age, the near-term weakness is likely to reverse over 1-2 quarters as margin progress becomes visible into the back half. On the other hand, Power Corp. is increasingly a valuation call rather than a fundamentals call: strong execution plus buybacks can still work, but upside is likely capped unless capital deployment becomes more aggressive or a spin/monetization catalyst emerges.

The contrarian angle is that the market may be overpaying for perceived defensiveness while underpricing embedded operating leverage in the better compounders. The names with the best asymmetry are those where optionality is not yet in the numbers: Finning from data-center and LatAm mix, Franco from Cobre Panamá plus higher gold/O&G sensitivity, and Boyd from a later-cycle repair tailwind. By contrast, Goeasy’s rebound will likely be slower than bulls want because regulatory/control remediation is a multi-quarter, not multi-month, process.

Key Decisions for Investors

• Go long FTT.TO on post-upgrade momentum; use any pullbacks over the next 1-2 weeks to build. Base case is continued multiple re-rating over 3-6 months as backlog converts and service mix expands; downside is limited unless commodity/resource capex rolls over sharply.
• Add FNV on weakness, with a 3-6 month horizon. The cleaner trade is to own the royalty quality compounder into Cobre Panamá headlines; risk/reward improves if the market remains skeptical and assigns little value to reopening optionality.
• Short GSY.TO or buy puts for a 3-6 month horizon. The setup is asymmetric because control remediation, funding, and credit normalization all need to go right; if loan growth stalls again or charge-offs stay elevated, downside can extend well beyond current consensus.
• Buy BYD.TO on continued post-selloff dislocation, or express via call spreads for 6-12 months. The thesis is that margin/TCOR benefits should reassert before sentiment does; stop if same-store sales continue to decelerate for two consecutive quarters.
• Consider a pair: long BYD.TO / short GSY.TO. Both are quality-sensitive names that sold off, but Boyd has an operational explanation and latent tailwinds, while Goeasy has balance-sheet and control remediation risk that can keep the multiple compressed.