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  5. IMO: Hi. [Imperial Oil Limited]
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Investment Q&A

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Q: Hi.

Do you agree with TD's move on TOU from Buy to Hold? They also downgraded IMO to a sell. With the anticipated increase in demand for Nat Gas, in spite of TOUs low FCF yield, I would think there is runway for them. Any comments on both IMO and TOU?

Carl
Asked by Carl on October 02, 2025
5i Research Answer:

The downgrade stems from 'higher valuation' and 'significant capital expenditures'. But it is very cheap already and we think management deserves a premium. Capex historically has translated into very good growth and higher dividends. We would not read too much into the downgrade. IMO is up 41% this year and might consolidate. We would not view it negatively, however. TOU remains our favourite gas stock in Canada by far.