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WHAT'S ON TAP
Here’s what we have on tap for you in this Morning Meeting:
Trump and Doug Ford go head-to-head with tariffs
Veren and Whitecap are combining in a $15B deal, the biggest Canadian energy transaction this year
After the selloff, we’re starting to see value again in the data center trade
All eyes on the Bank of Canada rate decision today at 9:45AM, check here!
Before we kick things off here, let’s take a breath… the news flow over the past few weeks certainly isn’t pretty, but the world isn’t ending. Volatility brings opportunity.
TRADE WAR MONITOR
Further emphasizing we’re in stage 1 (volatility & uncertainty) of our trade war framework was some flip flopping on tariff escalation to start the week:
Ontario implemented a 25% power tax on electricity exports to Michigan, Minnesota, and New York.
Trump responded by doubling steel & aluminum tariffs to 50% effective today, and threatened steep tariffs on automobiles on April 2nd.
The pair both walked back their tariffs after a “constructive” conversation between Ford and Lutnick… let’s see if it stays that way.
Our framework for navigating the trade war: https://www.bullpen.finance/content/51
HOT OFF THE PRESS
Veren and Whitecap to merge in $15B deal
The largest energy deal in Canada this year was announced on Monday, with a combined enterprise value of $15B. The deal makes sense for a few reasons.
First and foremost, scale.
The combined company becomes the 7th largest oil producer in Canada, the largest landholder in the attractive Montney and Duvernay regions, and the 2nd largest oil producer in Saskatchewan.
More scale = more institutional capital that can look at you.
Second, synergies.
The combined company expects to unlock >$200M through a combination of corporate savings (headcount), operational overlap (geography), and capital efficiency. Management is incentivized to market synergies, so take this with a grain of salt.
Overlapping land rights create opportunities for efficiency
Third, strong financial profile.
At closing, the combined company has a net debt / funds flow ratio of 0.9x which screens favourably versus peers. That balance sheet strength should open up optionality for buybacks on top of the current WCP dividend.
While it looks good on paper the market didn’t love it, sending WCP shares ~15% lower on Monday, before a 4% bounce yesterday.
Value is coming back to the data center trade
After the DeepSeek scare in January we highlighted that the AI trade isn’t dead, but could be changing.
Worries were further magnified by a TD Cowen note indicating Microsoft had cancelled data center leases on February 21st. Sentiment hasn’t recovered, with our data center basket down big YTD.
In our view, the structural setup remains clear.
Despite a 34% Y/Y jump in data center capacity in 2024, many still call for a future supply crunch driven by demand linked to advanced AI workflows…
… and big tech CapEx expectations aren’t showing signs of a slowdown:
Company | 2025E CapEx (US $B) |
|---|---|
Microsoft | 80 |
75 | |
Amazon | 100 |
Meta | 65 |
To give you a quick reminder on the main beneficiaries of this demand:
Grid infrastructure (transmission lines, voltage transformers, etc.)
Power producers (data centers could hit 4% of global power consumption by 2030, from 2% in 2022)
Server infrastructure (racking, cooling, etc.)
and the obvious… chips!
Should the backdrop continue to play out favourably, there could be an opportunity developing for those who missed the first leg up, as our basket now trades narrowly above its long-term average EV/EBITDA.
We spent yesterday digging into the theme at a higher level - this research will be the basis for some deeper dives to follow!
If the above link won’t work, try this: https://www.bullpen.finance/content/58
FUNNY BUSINESS
ON OUR RADAR
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GAINERS & LOSERS
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Aya Gold & Silver (AYA) shares were up 16% from the 52W low yesterday on the back of strong February 2025 production results. Silver production came in at ~357K ounces, a 37% increase M/M, demonstrating the successful ramp-up of the company’s Zgounder mine.
Endeavour (EDR) was up 25% on strong earnings, with $0.02 of EPS beating street estimates for a one cent loss, and silver equivalent production of 7.6M ounces coming in at the higher end of guidance.
Pollard (PBL) sold off after posting disappointing Q4 results, missing big on EPS due to manufacturing issues that led to higher spoilage on some instant ticket games.
INSIDER TRANSACTIONS
| Insider | Company | Value |
|---|---|---|
| Frank Gambioli | Loblaw (L) | $1.1M |
| Susan Yurkovich | Canfor (CFP) | $887K |
| Fabio Ribeiro | Aura Minerals (ORA) | $2.3M |
| William Brennan | Altus Group (AIF) | $2.7M |
| Stephen Smith | EQB Inc. (EQB) | $1.1M |
| Richard Dufresne | George Weston (WN) | $3.0M |
| Galen Weston | George Weston (WN) | $1.7M |
| Rashid Wasti | George Weston (WN) | $1.1M |
| Scott Burrows | Pembina (PPL) | $2.7M |
EARNINGS
YESTERDAY’S EARNINGS
| Company | Actual | Consensus |
|---|---|---|
| 🇨🇦 Step Energy (STEP) | -0.31 | -0.29 |
| 🇨🇦 Viemed (VMD) | 0.10 | 0.10 |
| 🇨🇦 Transcontinental (TCL-A) | 0.49 | 0.38 |
| 🇨🇦 Altius Minerals (ALS) | 0.06 | 0.05 |
| 🇨🇦 Peyto Exploration (PEY) | 0.39 | 0.48 |
| 🇺🇸 Dick's (DKS) | 3.62 | 3.51 |
Transcontinental (TCL-A) was up 4% on mixed Q1'25 results, with earnings growth despite lower revenue thanks to gains on asset sales and cost cutting initiatives. The leverage ratio tracked lower at 1.53x from 1.71x in October, highlighting the company’s commitment to balance sheet strength in a challenging market. TCL remains committed to buybacks, repurchasing ~935K shares for $16M during the quarter ($49M since June 2024).
TODAY’S EARNINGS
| Company | Time | Consensus |
|---|---|---|
| 🇨🇦 Propel Holdings (PRL) | AM | 0.39 |
| 🇨🇦 Cresco Labs (CL) | AM | -0.01 |
| 🇨🇦 Blackline (BLN) | AM | -0.04 |
| 🇨🇦 Freehold (FRU) | PM | 66.5M |
| 🇨🇦 ShaMaran (SNM) | PM | 42.1M |
| 🇨🇦 Ascend (AAWH) | PM | -0.11 |
| 🇨🇦 VerticalScope (FORA) | PM | 0.10 |
| 🇨🇦 Flagship (MHC-U) | PM | 12.2M |
| 🇨🇦 Currency Exchange (CXI) | PM | 3.6M |
| 🇨🇦 PRO REIT (PRV-U) | PM | 14.2M |
| 🇨🇦 Aris Mining (ARIS) | PM | 0.16 |
| 🇨🇦 Xtract One (XTRA) | PM | -3.4M |
| 🇨🇦 Galiano (GAU) | PM | 0.06 |
| 🇨🇦 Algoma Steel (ASTL) | PM | -0.91 |
| 🇺🇸 Adobe (ADBE) | PM | 4.97 |
| 🇺🇸 American Eagle (AEO) | PM | 0.51 |
Watch out for Algoma Steel (ASTL) as the results and conference call could add some much needed context around the impact of Trump’s steel & aluminum tariffs.
ECONOMIC DATA
YESTERDAY’S ECONOMIC RELEASES
| Release | Actual | Consensus |
|---|---|---|
| 🇺🇸 JOLTs Openings | 7.74M | 7.63M |
| 🇺🇸 JOLTs Quits | 3.27M | - |
| 🇺🇸 Biz. Optimism Index | 100.7 | 101 |
TODAY’S ECONOMIC RELEASES
| Release | Time | Consensus |
|---|---|---|
| 🇺🇸 Core Inflation M/M | 7:30AM | 0.3% |
| 🇺🇸 Core Inflation Y/Y | 7:30AM | 3.2% |
| 🇺🇸 Inflation M/M | 7:30AM | 0.3% |
| 🇺🇸 Inflation Y/Y | 7:30AM | 2.9% |
| 🇨🇦 Rate Decision | 8:45AM | 2.75% |
| 🇺🇸 EIA Oil Stock | 9:30AM | 2.1M |
| 🇺🇸 EIA Gas Stock | 9:30AM | -2.5M |
All eyes on the BoC rate decision… market is expecting a cut. With muted jobs data last week combined with tariff uncertainty, we should get one.
