Canadian Research at a Glance - May 14, 2026

Research evidence excerpt

Canadian Research at a Glance - May 14, 2026

CANADIAN RESEARCH AT A GLANCE

Rating: Sector Perform

Risk Qualifier: Speculative Risk

Price Target: 7.00 ↑ 6.00

Our view: Q1 results aligned with the pre-release, and forward guidance pointed to

break even EBITDA by year-end. Management expects sequential improvements in

profitability as legacy headcount and costs associated with the closed blast furnace

are shed. They also flagged several one-off cash benefits (~$300MM comprised of

tax, NWC, and insurance proceeds) that are expected to help liquidity. That said, the

current tariff backdrop meaningfully increases risk associated with Algoma's ability

to generate operating FCF longer-term. We therefore stay on the sidelines until a

transparent trade policy emerges, but believe Algoma is poised for a re-rating when

that potentially materializes.

Paul Treiber, CFA (Analyst) Constellation Software Inc. (TSX: CSU; 2,405.00)

(416) 842-7811; paul.treiber@rbccm.com Published May 13 2026 14:29:19 EDT

Steven (Pei Wen) Lin (Associate)

(416) 842-9980; steven.lin@rbccm.com M&A tracking to an annual high reaffirms our positive thesis

Ty Sullivan (Associate) Rating: Outperform(416) 842-8630; ty.sullivan@rbccm.com Price Target: 4,500.00 ↓ 4,800.00

Our view: Constellation's YTD M&A implies 2026 is tracking to a new annual high.

Strong M&A stems from the scalability of Constellation's decentralized model.

Due to the higher pace of acquisitions, we are increasing financial estimates.

Sequentially stable organic growth helps diminish AI headwind concerns. With

valuation near multi-year lows and expected continued compounding of capital, we

see compelling risk-reward on the stock. Maintain Outperform, target moves from

C$4,800 to C$4,500, given the continued decline in software peer valuations.