Vermilion Energy jumps 15% as analysts see 70% upside

Vermilion Energy Inc. led the S&P/TSX composite index this week, rising 15% after TD Cowen analyst Menno Hulshof upgraded the shares to a buy while keeping his C$18 price target. The stock closed Friday at C$15.89.

Hulshof said Vermilion is tracking toward the high end of its 2026 production guidance. Investors now have a clearer picture of near-term challenges, including second-quarter hedging losses and cyclone impacts at its Wandoo operations in Australia, he wrote in a note.

Vermilion has had a choppy 2026, down 20% from its mid-March high. Looking to 2028, Hulshof sees potential for share buybacks to pick up and for momentum in Germany, where Vermilion holds operations.

ATB Cormark Capital Markets analyst Amir Arif has one of the highest price targets on the stock at C$24. In a May 7 note after the company's last earnings report, Arif said the name offers exposure to European gas, an improved domestic portfolio of Deep Basin and Montney formations, and longer-term growth in Germany.

National Bank of Canada analyst Travis Wood has the highest target at C$27, implying a potential gain of nearly 70% from Friday's close. The consensus 12-month price target across 11 analysts is C$20, according to Bloomberg data.

U.S. Bank Strength Bodes Well for Canadian Peers

Strong second-quarter earnings from U.S. banks should give investors more confidence in the near-term outlook for large Canadian banks, Scotia Capital Markets analyst Mike Rizvanovic said in a July 22 note.

Rizvanovic looked at four big U.S. money centre banks and eight large regional banks. They beat earnings-per-share consensus by an average of 9%. Banking fees at Goldman Sachs and Morgan Stanley jumped 16% from the first quarter. Equities trading revenue hit record levels at JPMorgan Chase, Bank of America, Morgan Stanley and Goldman Sachs. Total loans grew, with commercial lending outperforming personal.

Toronto-Dominion Bank and Bank of Montreal are best positioned to benefit from rising U.S. personal and commercial lending, Rizvanovic said. BMO stands to gain the most because 78% of its U.S. personal and commercial banking is commercial lending, versus 48% at TD. Scotia Capital has 12-month price targets of C$239 and C$169 for BMO and TD. Shares closed Friday at C$250.77 and C$169, respectively.

CIBC Capital Markets analyst Paul Holden said U.S. capital markets results bode well for BMO, Royal Bank of Canada and National Bank of Canada due to their exposure to U.S. investment banking and equity trading desks. He warned that capital markets could shift from a tailwind to a headwind if market conditions change. National Bank could also benefit, Holden added.