CIBC upgraded Linamar (LIMAF) to Outperformer from Neutral with a price target of C$87, up from C$77, as the firm transfers coverage of the name from Krista Friesen to Ty Collin. CIBC notes that Linamar is its top pick within its auto coverage universe based on its best-in-class balance sheet, leading profitability and cash flow, modest tariff exposure, and growth upside. The firm believes that worst-case tariff risks for the auto industry have receded, and it sees Linamar as a fundamentally healthy business well positioned to navigate near-term challenges. Despite a strong rebound in the shares since April, the stock trades at a below-average valuation on earnings estimates that are at or near cyclical lows, and CIBC sees significant upside when a true earnings recovery starts to get priced in. The firm acknowledges the risk that its call may be early, but overall sees an attractive risk-reward setup with limited downside risk.
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