ATB Capital Markets Hosted the 13th Annual Investor Conference with 2025 Outlooks

ATB Capital Markets, the capital markets arm of ATB Financial and ATB Securities Inc., hosted its 13th Annual Institutional Investor Conference in Toronto last week, which brought together over 100 institutional investors that met with 53 management teams from multiple sectors.

The insights of these business leaders, alongside the deep sector knowledge of ATB Capital Markets' research analysts, provided an outlook on the challenges and opportunities to expect in 2025, focusing on energy, transportation, growth and innovation and engineering and construction sectors.

"Building on the success of our past conferences, this year's event equipped attendees with actionable strategies and forward-thinking perspectives from industry leaders and our expert analysts for the year ahead," said Darren Eurich, CEO of ATB Capital Markets. "As both Canada and the U.S. face changes in federal administration, the complex macroeconomic backdrop relating to the impact of tariffs, path of interest rate cuts, and consumer confidence reflect the need for investors to be more selective than ever before. While the valuation of broad market indices are at long-term highs, particularly in the U.S., performance has been concentrated amongst a select few companies, leaving opportunities for small- to mid-cap names with strong fundamentals that have not seen significant appreciation as yet, to outperform in 2025."

For ATB Capital Markets' full list of 2025 Outlook reports, click here.

Energy Outlook
Exploration & Production:
The current political landscape presents a complex situation for producers, with optimism surrounding potential changes in Canada's federal government and regulatory environment along with political uncertainty and risks associated with tariffs from the U.S. Panelists expect long-term data centre power generation tailwinds to boost confidence in potential future gas market demand and for M&As to remain a key theme through 2025 as companies pursue M&A-driven growth and optimize their portfolio inventories.

"Despite the near-term policy risks, such as potential tariffs, we expect continued strong medium and longer-term investment appeal for the Canadian upstream and integrated oil and gas sector based on the relative asset quality and inventory depths," said Patrick O'Rourke, Managing Director, Equity Research, Large-Cap E&P and Oil Sands. "We remain optimistic on the long-term returns outlook, particularly for businesses with strong operational execution and opportunistic valuations, inflation insulated companies, and those with high-quality outsized resource bases relative to enterprise value."

Energy Infrastructure:
Discussions highlighted the increasing demand for power and the role of natural gas generation to support electrification and data centre development. Panelists also discussed the growth of generative AI, the need for reliable power, and the potential for Alberta to be a new data centre hub.

Energy Services:
While the bullish electric power and natural gas outlook is a long-term positive for energy services, it has yet to be manifested in activity increases. For 2025, panelists expect modestly growing activity increases in Canada and a flattish U.S. and international outlook.

"With upstream spending slowing and the lack of macro tailwinds, we expect 2025 to be a transitional year for energy services," added Waqar Syed, Head of Equity Research, Energy Services. "This year will be a stock picker's year, and we expect companies with industry-leading EBITDA growth, positive inflection in cash return to shareholders, and investor-friendly corporate restructuring to drive performance."

Diversified Industries Outlook
Transportation:
For air travel, yield and load factors are expected to improve in 2025 with the exit of several ultra-low-cost carriers and limited aircraft supply. Demographics continue to support demand with wealthy millennials driving a shift towards premiumization for air travel. In the auto industry, while ATB Capital Markets remains cautious about the impact of macro pressures on market conditions, recent rate cuts and a potential increase in OEM incentives are supportive of new vehicle sales in 2025. For rail, ATB Capital Markets expects moderate volume growth, healthy pricing conditions, and a more normal operating environment in 2025.

Engineering and Construction:
Although the changing U.S. administration creates uncertainty around future infrastructure spending commitments, current backlogs and levels of public spending are supportive of organic growth in 2025. ATB Capital Markets expects earnings to be the main driver of growth and sees limited upside for incremental multiple expansion.

"With many names in our coverage universe in deep value territory and others continuing to extend their leadership in their respective subsectors, 2025 presents several opportunities for investors," says Chris Murray, Managing Director, Equity Research, Diversified Industries. "In the current economic environment, company and subsector-specific positioning and focusing on capital-efficient growth in cash flows and earnings will be crucial for investors in 2025."

Growth and Innovation Outlook
Artificial Intelligence:
AI is expected to remain the leading theme across tech in 2025 as companies continue to incorporate AI into their solutions. Due to its capital-intensive nature, AI is driving positive sentiment and attracting enormous levels of investment across the U.S. economy. ATB expects investments into power and data centre capacity from leading AI names to continue in 2025.

Cryptocurrencies:
The rally in cryptocurrencies that started in early 2023 and gained momentum post-election is expected to continue in 2025. Viewed as a superior store of value to gold, with a market cap still well below that of gold, Bitcoin has potential for further upside in 2025.

"As macroeconomic conditions improve, growth rates have increased, and the environment to raise capital has also been showing signs of life," said Martin Toner, Managing Director, Equity Research, Growth and Innovation. "AI will continue to be a key theme in 2025, especially if governments worldwide increase investments, which could add to the supply and demand imbalance."