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Meta Platforms shares jumped nearly 13% this week, approaching a $2 trillion market capitalization, driven by its new Muse AI agent and device launches.
Meta Platforms Inc. is on the verge of joining the US$2 trillion market capitalization club after its shares surged nearly 13 per cent this week, closing at US$751.66 on Friday. The rally builds on gains from the Sept. 8 release of its artificial intelligence agent Muse and the unveiling of several new devices at a Meta Connect event on Sept. 23 in Menlo Park, California.
Meta's Muse AI Agent and Device Launch
TD Cowen analyst John Blackledge raised his price target to US$865 from US$750 following the event, where Meta introduced multiple devices all linked to Muse. Since its release, Muse has climbed to the top of Apple Inc.'s app store rankings, Blackledge noted.
Meta now has a 12-month price target of US$787.68 based on calls from 62 analysts, according to Bloomberg. However, the company faces obstacles. On Friday, shares pulled back after a New Mexico court ruled that Meta violated state laws related to the use of Facebook user data in the Cambridge Analytica scandal of the 2010s.
Shopify and Muse Partnership Boosts TSX Stock
Shopify Inc. (SHOP:TSX) rose 13 per cent this week on the S&P/TSX Composite, finishing among the top gainers after CEO Tobias Lutke announced a partnership with Meta's Muse AI agent. J. Parker Lane, managing director at Stifel U.S. Equity Research, said in a Sept. 22 note that by opening the door to Muse, Shopify is positioning itself as a key checkout rail for agent-initiated purchases across its merchant base. Stifel has a price target of $253.27, and shares closed Friday at $201.20.
Bond Yields Pressure Canadian Utilities
Bond yields in the United States and Canada have hit multi-decade highs, leading to higher potential borrowing costs and headwinds for utility stocks, CIBC Capital Markets analysts said in a Sept. 21 note. Analysts led by Mark Javi wrote that the U.S. 10-year yield has continued to rise, historically one of the strongest indicators of utility relative underperformance. Since last July, the S&P/TSX utilities sub-index is down just over 11 per cent.
Rising oil prices are also likely drawing investors to the energy sector and away from defensive sectors such as utilities, CIBC added. The analysts said a reversal in performance may not occur until one or more of these signals reverses. CIBC cut its price targets for all Canadian utilities it covers, with Emera Inc. (EMA:TSX) expected to take the biggest hit from higher bond yields due to its debt structure. The price target was reduced to $72 from $76, and shares closed Friday at $67.48. CIBC also sees potential for modest earnings per share gains for Hydro One Ltd. (H:TSX) and Canadian Utilities Ltd. (CU:TSX) from regulated rate resets in Alberta and Ontario. Despite the pullback, Canadian utilities still trade at a plus-27 per cent premium versus the S&P/TSX composite.
Slate Grocery REIT Suspends Distribution
Shares of Slate Grocery REIT (SGR/U:TSX) tumbled nearly 35 per cent this week after management suspended its cash distribution in an unexpected turn, TD Cowen analyst Sam Damiani said in a Sept. 24 note. The REIT had been yielding eight per cent as of the close on Sept. 23, TD noted. Damiani said the announcement is likely a response to the recent increase in the government bond yield curve, given that 66 per cent of the REIT's debt matures through 2028.
CIBC estimated that refinancing debt at higher rates could cost the company an additional $14 million between 2026 and 2028. Slate is undergoing a strategic review that includes seeking interest in a potential sale. Damiani has a price target of $12 on the shares. ATB Cormark Capital Markets analyst Sairam Srinivas called the distribution elimination significant and negative and cut his price target to $8 from $13. Shares closed Friday at $10.75.
Other Analyst Actions and Stock Movements
TD Cowen analyst Craig Hutchison maintained his price target for Trilogy Metals Inc. (TMQ:TSX) at $8 on a de-risking milestone for its flagship Arctic project. Shares closed Friday at $4.54. RBC Capital Markets analyst Harrison Reynolds maintained his price target for Artemis Gold Inc. (ARTG:TSX) at $60 following the announcement of the purchase of Vista Gold Corp. (TSX: VGZ). Shares closed Friday at $40.20.
Raymond James analyst Brian MacArthur hiked his price target for Elemental Royalty Corp. In other calls, McDonald's Corp. (MCD:NYSE) had its price target cut to US$320 from US$340, with the analyst saying management's plan to boost U.S. sales makes the risk/reward attractive despite investor concerns about pressured sales trends. Shares closed Friday at US$236.50. Bird Construction Inc. (BDT:TSX) saw its price target raised to $90 from $75 to catch up to strong second quarter results and an expected catalyst-rich end to the year. Shares closed Friday at $79.20.
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