Featured Research

Annual energy outlook: AI provides tailwind for gas, while conviction level on oil remains weak
After two years (2021 and 2022) as the best-performing sector across the S&P 500, Energy has now underperformed for each of the past two years, with 2024 ending mostly in the red. The Energy sector currently sits at only 3% of S&P market cap, but investor sentiment remains above pre-COVID levels. That being said, near-term uncertainty regarding the commodities (namely oil) has left investors with little conviction at the moment.

Energy Stat: No hope left for a 1.5-degree target, and we would say that regardless of how the U.S. election went
Clearly, the Paris Agreement has not succeeded in preventing global heating from topping 1.5 degrees. With that “high ambition” goal out of reach, does the base case goal of 2 degrees still stand a chance? The UN Environment Program predicts that existing climate policies around the world would result in an average global temperature increase of 3.1 degrees Celsius by 2100, versus pre-industrial levels. This outlook is substantially worse than every major climate agreement’s stated objective of limiting global heating to a maximum of 2 degrees, and preferably 1.5 degrees.

Banking 2025 outlook: Deregulatory agenda sets the stage for better times ahead
After a solid finish to 2024, which was buoyed by the commencement of the Fed’s easing cycle in September and the presidential election in early November, bank stocks are nearing a proverbial fork in the road as we enter 2025. Investors may be at somewhat of an impasse as valuations are no longer “cheap” when compared to history, but where we expect sector weightings to continue to increase from still-depressed levels should expectations begin to turn into realities.

2025 bank M&A outlook: M&A activity set to accelerate fueled by deregulatory agenda
Looking ahead into 2025, we expect bank M&A activity to accelerate fueled by prospects for a deregulatory agenda that is anticipated to be ushered in by the incoming administration. We also see the fundamental headwinds banks still face as driving increased activity levels. These include still-subdued loan growth, ongoing liquidity/deposit pressures, upward expense creep, succession issues with management teams/boards and still-soft fee revenues, especially mortgage.

What’s in store for 2025?
Our annual outlook for the Canadian infrastructure & construction stocks and select property services providers we cover includes companies that vary in business models, capitalization, geographic and sector concentration, cyclicality, and risk profiles. Overall, we believe our infrastructure and construction group is set for a constructive 2025. Supporting this outlook are the big efforts our management teams have expended to eliminate end-market concentration, reinforce balance sheets, and tailor service offerings that answer critical infrastructure needs.

2025 healthcare policy outlook
Is anywhere safe? We anticipate 2025 to have heightened policy volatility compared to recent years as a result of one party having complete control in D.C., heightening legislative risk, as well as a new presidential administration looking to change policy directions on a wide variety of topics. Both will likely increase the impact of policy developments on markets and healthcare will likely see notable volatility.

Canadian real estate 2025 outlook: A good defense can act as a good offense in tougher market conditions
Defensive investment attributes such as strong balance sheet metrics, increased stock buyback and non-core asset sale activity, and potential to generate above-average 2025E AFFO/unit growth y/y could be key factors for relative outperformance in 2025.

2025 housing outlook
Following November’s election results, we believe investors need to brace for a “higher for longer” view on mortgage rates and housing affordability. With affordability strained, we see entry-level builders with excess spec inventory facing more margin pressure this spring. Pent-up demand is still robust, but the incentives needed to unlock the right monthly payment for first-time buyers will be costly. Meanwhile, move-up and luxury demand should be buoyed by tailwinds from record-high home equity, investment gains, and generational wealth transfers.

2025 REIT outlook: Plenty of catalysts, compelling valuations, and strong balance sheets
REIT earnings growth tends to be more stable vs. the S&P 500 due to contractual leases, high operating margins, low labor intensity, limited supply, and little international exposure. Further, REIT sectors with defensive characteristics outperform in late cycle economies.

A crucible year for AI agents and hardtech
The year ahead marks a key period for GenAI commercialization as capex concerns could be assuaged as assistant-oriented use cases quickly develop into more agentic flows across consumer/enterprise software and hardtech applications. Hardtech broadly defined could develop into a more mainstream technology as robotaxis scale and humanoid activity ramps.

Semi-annual media usage trends survey
The Raymond James TMT team recently updated its US media usage survey to assess trends on: 1) video package retention; 2) interest in specific programming; 3) preferred video services; 4) price sensitivity; 5) broadband-related preferences; and 6) consumer usage behavior.

A primer on ITOps: From back office to the forefront
ITOps has historically been confined to back-office support functions that were generally viewed as a cost center for most customers. We believe this industry is undergoing a marked shift alongside the increased adoption of AI technology that has significantly expanded the value proposition and total addressable market opportunity. In this report, we define the core ITOps market and provide a visual roadmap for investors to think about various adjacencies, competitive dynamics and sizes of each submarket that comprises total ITOps.