TD upgrades Linamar to Buy on limited USMCA impact

TD Securities analyst Brian Morrison upgraded Linamar (LIMAF) to Buy from Hold with a price target of C$66, up from C$59. The firm believes the United States-Mexico-Canada Agreement will likely be renegotiated in favor of future U.S. production but with limited impact on the current North American supply chain and the added opportunity for near-shoring by foreign manufacturers. Linamar has seen sales declines in both its Mobility and Industrial segments, as anticipated, but these were more than made up for by “notable” operating margin expansion in both segments, the analyst tells investors in a research note. TD thinks sufficient risk is being priced into Linamar shares.