Mark Zuckerberg, chief executive of Meta Platforms Inc., reveals the Muse Charm device during the Meta Connect event in Menlo Park, California, U.S., on Sept. 23, 2026. Photo by Minh Connors/Bloomberg files

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How bond yields are hitting utility stocks, why this REIT suspended its cash distribution and more from The Week in Stocks. 

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Stock of the week: Meta Platforms Inc.

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Meta Platforms Inc. (META:Nasdaq) was on its way to joining the US$2 trillion market capitalization club on Friday, with shares jumping this week nearly 13 per cent as it continued to build on gains from the Sept. 8 release of its artificial intelligence agent Muse. TD Cowen analyst John Blackledge hiked his price target to US$865 from US$750 following an event Wednesday during which Meta unveiled several new devices, all of which are linked to Muse. Shares closed Friday at US$751.66. Since its release, Muse has leapt to the top of Apple Inc.’s app store rankings, Blackledge said. However, the company faces some obstacles. On Friday, shares pulled back after a New Mexico court ruled Meta violated state laws in connection with the use of Facebook user data in the Cambridge Analytica scandal of the 2010s, Bloomberg said. Meta has a 12-month price target of US$787.68 based on the calls of 62 analysts, according to Bloomberg.

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Keeping score

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How Shopify is looking to ride the Muse wave

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Shares of Shopify Inc. (SHOP:TSX) rose 13 per cent this week on the S&P/TSX Composite, finishing among the top gainers as chief executive Tobias Lutke announced a partnership with Meta’s Muse AI agent. “By opening the door to Muse, we believe SHOP is positioning itself as a key checkout rail for agent-initiated purchases across its merchant base,” J. Parker Lane, Stifel U.S. Equity Research managing director, said in a note on Sept. 22. Stifel has a price target of $253.27. Shares closed Friday at $201.20.

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Utility stocks face bond yield headwinds, says CIBC

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Longer-term bond yields in the United States and Canada have hit multi-decade highs, resulting in higher potential borrowing costs and headwinds for utility stocks, said CIBC Capital Markets analysts in a note on Sept. 21. “The U.S. 10-year yield has continued to rise, which has historically been one of the strongest indicators of utility relative underperformance,” analysts led by Mark Javi said in the note. From last July, the S&P/TSX utilities sub index is down just over 11 per cent. In addition, rising oil prices are likely drawing investors to the energy sector and away from defensive sectors such as utilities, CIBC said. “We may not see a reversal in performance until one or more of these signals reverses,” the analysts said. Given the headwinds, CIBC has cut its price targets for all the Canadian utilities it covers, though it said that some companies are more exposed to the rising cost of debt than others. It tapped Emera Inc. (EMA:TSX) to take the biggest hit from higher bond yields, given the nature of its debt, and cut its price target to $72 from $76. Shares closed Friday at $67.48. In a higher rate environment, CIBC also sees potential for “modest” earnings per share gains for Atco Ltd. (ACO/X:TSX), 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 strong premium versus the S&P/TSX composite of plus-27 per cent,” CIBC said.

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Slate Grocery REIT suspends cash distribution

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Shares of Slate Grocery REIT (SGR/U:TSX) tumbled nearly 35 per cent this week after management said it was suspending its cash distribution in an “unexpected turn,” TD Cowen analyst Sam Damiani said in a note on Sept. 24. The REIT had been yielding eight per cent as of the close on Sept. 23, TD said. “In our view, 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 is maturing through 2028, Damiani said. CIBC estimated that refinancing debt at higher rates could cost the company an additional $14 million between 2026 and 2028. Slate is currently undergoing a strategic review that includes seeking out 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.

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Price target hikes, cuts and holds

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