Stocks continued to march higher in June. Last month, the S&P/TSX Composite Index rallied 2.6 per cent, closing the month at a record high.
The top performing sectors were health care, technology, materials, consumer discretionary and financials with price returns of 9.2 per cent, 4.9 per cent, 3.6 per cent, 3.4 per cent and 3.4 per cent, respectively. Only two sectors finished the month in negative territory. The utilities and consumer staples sectors delivered negative price returns of 0.1 per cent and 2.3 per cent, respectively. Year-to-date, the S&P/TSX Composite Index is up 8.6 per cent.
The top 10 performers in the TSX Index during the month were:
- Bausch Health Companies Inc. (BHC-T), rallying 46 per cent
- Endeavour Silver Corp. (EDR-T), up 36 per cent
- Celestica Inc. (CLS-T), up 34 per cent
- First Majestic Silver Corp. (AG-T), up 33 per cent
- Cameco Corp. (CCO-T), up 26 per cent
- MDA Space Ltd. (MDA-T), up 24 per cent
- Bombardier Inc. (BBD-B-T), up 24 per cent
- First Quantum Minerals Ltd. (FM-T), up 19 per cent
- Ero Copper Corp. (ERO-T), up 19 per cent
- Sprott Inc. (SII-T), up 18 per cent
Stocks with positive changes to their target prices of 10 per cent or more over the past month include:
- Cameco Corp. (CCO-T), up 19 per cent
- Empire Company Ltd. (EMP-A-T), up 18 per cent
- Dollarama Inc. (DOL-T), up 17 per cent
- Definity Financial Corp. (DFY-T), up 16 per cent
- OceanaGold Corp. (OGC-T), up 13 per cent
- NovaGold Resources Inc. (NG-T), up 13 per cent
- New Gold Inc. (NGD-T), up 13 per cent
- K92 Mining (KNT-T), up 10 per cent
Stocks with negative revisions to their target prices of 10 per cent or more over the past month include:
The S&P/TSX Composite Index is currently trading at a price-to-earnings multiple of 17.1 times the 2025 consensus earnings estimate, slightly above the 10-year historical average forward P/E multiple of 16.6 times, according to Bloomberg.
Looking ahead, the S&P/TSX Composite Index has posted gains in July for seven consecutive years. Most recently, the index delivered a price return during the month of July of 5.6 per cent in 2024, 2.3 per cent in 2023 and 4.4 per cent in 2022.
The upcoming earnings season, which kicks off in a few weeks, may extend the market rally. Earnings estimates have decreased 1.1 per cent over the past four weeks with earnings growth of 5 per cent now expected over the next 12 months.
Now, here’s a look at analysts’ current target prices, recommendations, forecast returns and yields for all 213 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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