Analysts Upgrade Canadian Rail Stocks and Highlight High-Liner Sale to Japanese Buyer

Stifel analyst Daryl Young said the North American rail sector is beginning to turn around after a prolonged freight recession. He noted that volumes are rising, yields are above cost inflation and service levels are improving, allowing rail companies to grow revenue at low- to mid-single-digit rates.

Young initiated Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) with buy ratings, citing their irreplaceable networks, diversified markets and strong free-cash-flow generation. He highlighted CN’s low valuation and improving operations, and CPKC’s growth prospects tied to near-shoring trends in Mexico. Young set 12-month price targets of $200 for CN and $150 for CPKC, both above the Street consensus.

Desjardins Securities analyst Aditya Gupta initiated coverage of IGM Financial with a buy rating, pointing to the upside of consolidating its economic interest in Wealthsimple. He projected a 12-month target of $93 for IGM shares, above the average analyst estimate.

RBC Dominion Securities analyst Ryland Conrad described the $800 million sale of High Liner Foods to Japanese seafood company Umios Corp. as a logical outcome for shareholders. He said the deal combines Umios’ marine resources with High Liner’s processing and distribution platform, creating a vertically integrated North-American operation. Conrad raised his price target for High Liner to $27 per share, reflecting the offer price.

Other analyst actions included ATB Cormark’s Kyle McPhee moving High Liner to a tender rating, TD Cowen’s Tim James forecasting flat Q3 revenue for Chorus Aviation and raising its target to $35, and Citi’s Tyler Radke lifting Shopify’s target to US$216 on expectations of strong quarterly growth.

"Industry volumes are positive once again, yields are trending above cost inflation, and rail service levels are improving," Young said. "We see more upside than downside from here particularly for the commodity-exposed Canadian rails," he added. "The transaction combines Umios’ marine resources with High Liner’s processing, brands and distribution network, creating a vertically integrated platform for future growth in North America," Conrad said. "We expect another strong quarter from Shopify, driven primarily by payments and Merchant Solutions growth," Radke said.

The analysts’ reports reflect a broader optimism for Canadian rail and food-processing sectors amid improving freight volumes, infrastructure spending and trade diversification initiatives.