January was a positive month for equity investors.
The S&P/TSX Composite Index rallied 3.3 per cent with 15 per cent of stocks in the Index realizing double-digit gains. On Jan. 30, the S&P/TSX Composite Index closed at a record high. However, this uptrend has reversed course, at least in the near term.
February is off to a volatile start. Tariff announcements have created uncertainty surrounding the potential impact on economic growth, inflation and corporate earnings. Analysts’ forecast earnings, target prices and recommendations may be subject to material revisions depending on how events unfold -whether tariffs turn out to be temporary, scaled back or permanent.
Here’s a look at analysts’ current target prices, recommendations, forecast returns and yields for all 222 securities in the S&P/TSX Composite Index grouped by sector and ranked according to their expected price returns (excluding dividend and distribution income). The posted target price for each security is an average of all available target prices from analysts. A target price typically reflects an expected share or unit price 12 months from now based on an analyst’s financial modelling, such as a discounted cash flow or sum-of-the-parts model. For the yield provided, Bloomberg calculates this figure by annualizing the most recent announced dividend or distribution value.
It’s important to note that high target prices, which imply stellar returns that seem unbelievable may be just that - unrealistic. At times, when a stock price falls analysts may maintain their bullish expectations, inflating the forecast return. In addition, an outlier (extreme target price) can skew the average target price, to the upside or downside, particularly when the number of analysts covering a stock is low. Don’t let a huge projected gain lure you into a position – it is critical to look at the company and industry fundamentals.
Click here to download an Excel version of the report.
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