01:20 PM EDT, 04/29/2025 (MT Newswires) -- Heading into fourth-quarter results, an improving advertising environment provided a constructive backdrop for the Canadian media group, notes RBC.

However, the backdrop has changed heading into the first quarter reporting, with few places to hide in any tariff-induced economic downturn or recession with valuation risks re-emerging, write analysts Drew McReynolds and Ryland Conrad. Against this backdrop, their best ideas are Cineplex ( CPXGF ) and Transcontinental.

"As 2025 progresses, we would not be surprised to see advertising spend soften considerably given how tariff-induced uncertainty is likely to weigh on advertisers and advertising budgets." Should North America enter a recession in 2025-2026, RBC sees the potential for downward earnings revisions for most companies in its diversified media coverage.

"We continue to recommend riding out the current volatility in the higher-quality names with respect to earnings resilience and/or balance sheets and FCF."

Cineplex ( CPXGF ), rated Outperform, with a $13 target, will report its first-quarter results on May 9.

Transcontinental, rated Outperform, with a $24 target, reported its first-quarter results on March 11.

Price: 9.56, Change: -0.14, Percent Change: -1.44