This TSX stock could see nearly 32% upside after a huge India deal, analyst says

Which stocks are CIBC’s top picks to navigate volatile gold and silver prices, what are TD’s energy infrastructure picks and more from The Week in Stocks.

Fairfax Financial Holdings Ltd. (FFH:TSX) finished this week among the TSX’s top 10 gainers, up nearly eight per cent after the Toronto-based conglomerate led by billionaire Prem Watsa announced a deal for a controlling stake in India-based IDBI Bank Ltd. “The investment is a long-term play on the high-growth potential of India and its banking industry,” Phil Hardie, an analyst at Scotia Capital Markets said in a note on Oct. 15. He has a 12-month price target on Fairfax of $2,950. RBC Capital Markets analyst Bart Dziarski cut his price target to $3,170.85 from $3,260.11 on the news while BMO Capital Markets analyst Tom MacKinnon hiked his price target to $2,700 from $2,500. Shares closed Friday at $2,403.11. Scotia’s Hardie said there was concern the IDBI deal would muddle Fairfax’s efforts to be viewed more as an insurance company than a investment conglomerate. But since the announcement, management clarified its plans to expand its offerings with a growing Indian insurance company and an established provider of investment banking and wealth management services, he said. The deal has been approved by the government of India, but still requires other approvals. It is expected to close in the first quarter of 2027 or sooner, Hardie said. Shares of Fairfax have a price target of $2,910.12 based on the calls of seven analysts, according to Bloomberg.

Energy earnings season is nearing and TD Cowen analysts said in a note on Oct. 16 that they favour TC Energy Corp. (TRP:TSX) in the infrastructure sector as they expect the pipeline giant to make project announcements including on the Canadian NGTL system, and the Crossroads and other U.S. natural gas projects. TD Cowen analyst Aaron MacNeil hiked his price target slightly for TC Energy to $103 from $102, saying investors should focus more on the updates for 2027 and possible final investment decisions rather than earnings, which will be released on Oct. 30. Shares closed Friday at $87.13 and are up 15.3 per cent year to date. Shares got a boost when the company announced a deal on Oct. 13 with five Indigenous groups to sell them a share of the company’s stake in the Coastal GasLinkpipeline, which feeds the LNG Canada terminal on the B.C. coast. Still, risks lurk for the energy infrastructure sector including higher interest rates, which make debt-funded projects more expensive. Infrastructure stocks typically perform poorly as rates rise, MacNeil said. TD also hiked its price targets for Keyera Corp. (KEY:TSX) ($70 from $67), Pembina Pipeline Corp. (PPL:TSX) ($79 from $77), Gibson Energy Inc. (GEI:TSX) ($36 from $35) and Enbridge Inc. (ENB:TSX) ($83 from $81). Analysts cut the target for South Bow Corp. (OSOBO:TSX) to $52 from $53.

Gold and silver prices fell 5.4 per cent and 14.1 per cent in the third quarter, presenting a challenge for precious metals miners, CIBC Capital Markets said in a report on Oct. 15. “We expect softer production and higher costs for many,” Anita Soni, an analyst at CIBC said. It cut its price forecasts for the two metals, but also offered up its top picks for investors who want exposure to the sector but are risk averse. Among those names are Agnico Eagle Mines Ltd. (AEM:TSX). Its price target was cut to $339 from $298. Shares closed Friday at $267.50. Newmont Corp.’s (NEM:NYSE) price target was cut to US$154 from US$170. Shares closed Friday at US$118.60. Other names on the risk-averse roster included Wheaton Precious Metals Corp. (WPM:TSX), Pan American Silver Corp. (PAAS:TSX), Franco-Nevada Corp. (FNV:TSX) and Snowline Gold Corp. (SGD:TSX). CIBC analysts said they favour Kinross Gold Corp. (K:TSX), IAMGOLD Corp. (IMG:TSX), B2Gold Corp. (BTO:TSX), Alamos Gold Inc. (AGI:TSX), Orezone Gold Corp. (ORE:TSX) and Discovery Mining Ltd. (DSV:TSX) for those looking for more leverage. Other gold names not in the top picks list that saw their price targets increase were Allied Gold Corp. (AAUC), going to $40 from $39, and Aya Gold & Silver Inc. (AYA:TSX), rising to $55 from $48. Shares closed Friday at $29.65 and $37.64, respectively.

Shares of Coca-Cola Co. (KO:NYSE) are up nine per cent so far in October and TD Cowen analyst Robert Moskow is forecasting more potential upside after Yum! Brands Inc.’s (YUM:NYSE) U.S. restaurant chain KFC said it was switching to Coca-Cola from PepsiCo. Inc. (PEP:NYSE) as its drinks supplier starting in January 2027. Moskow maintained his price target of US$100 for Coke. Shares closed Friday at US$93.90. The Coke-KFC deal is “more symbolic than quantitative,” Moskow said in a note on Oct. 16, though he estimated that it will still add 20 basis points to total revenue when the contract starts. Coke gained 70 basis points in the pop market over the past two years compared with a loss of 150 basis points for Pepsi, Moskow said.

• BMO Capital Markets analyst John Gibson hiked his price target for Enerflex Ltd. (EFX:TSX) to $50 from $48 on its latest data centre win. Shares closed Friday at $35.23.
• CIBC Capital Markets analyst Mark Jarvi initiated coverage of a few U.S. energy companies including NRG Energy Ltd. (NRG:NYSE) and Vistra Corp. (VST:NYSE) on high free cash flow yield in the former’s case and “solid upside to tightening U.S. power fundamentals” in the latter’s. Price targets are US$173 and US$201, respectively. Shares closed Friday at US$103.75 and US$152.02.
• BMO Capital Markets analyst Brian J. Pitz cut his price target for Netflix Inc. (NFLX:Nasdaq) to US$125 from US$135 as investors remain pessimistic about growth in its U.S. and Canadian markets. Shares closed Friday at US$70.53.
• Stifel analyst Justin Keywood hiked his price target for Knight Therapeutics Inc. (GUD:TSX) to $12.25 from $11.00 on his belief there exists as much as 500 basis points of pent-up margin expansion, just not until 2029. Shares closed Friday at $11.04.
• Raymond James analyst Christian Reiter started coverage of Atlas Salt Inc. (SALT:TSXV) with a price target of $4.00 and an outperform rating on “key development milestones falling into place” for its Great Atlantic mine. Shares closed Friday at $1.45.

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.

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