September was a record-breaking month for the S&P/TSX Composite Index, which closed at an all-time high on Sept. 30. The TSX Index rallied 5.11 per cent in September, closing out the third quarter with a solid 11.79-per-cent price return.
Market strength remained broad-based, led by materials (once again), energy, financials, and utilities with price returns of 18.68 per cent, 4.82 per cent, 4.37 per cent and 3.64 per cent, respectively. There were four sectors that realized losses last month. Communication services, real estate, industrials and consumer staples reported negative price returns of 3.11 per cent, 1.32 per cent, 0.98 per cent and 0.03 per cent, respectively.
Year-to-date, the S&P/TSX Composite Index is up 21.41 per cent as of Sept 30.
The top 10 performers in the TSX Index during the month were:
- Ero Copper Corp. (ERO-T), rallying 43 per cent
- IAMGOLD Corp. (IMG-T), up 41 per cent
- Seabridge Gold Inc. (SEA-T), up 40 per cent
- First Majestic Silver Corp. (AG-T), up 36 per cent
- Energy Fuels Inc. (EFR-T), up 35 per cent
- G Mining Venture Corp. (GMIN-T), up 34 per cent
- Bird Construction Inc. (BDT-T), up 33 per cent
- Centerra Gold Inc. (CG-T), up 33 per cent
- NovaGold Resources Inc. (NG-T), up 31 per cent
- First Quantum Minerals Ltd. (FM-T), up 31 per cent
Stocks with the largest positive changes to their average target prices over the past month include:
- NovaGold (NG-T), up 24 per cent
- Barrick Mining Corp. (ABX-T), up 20 per cent
- Energy Fuels (EFR-T), up 19 per cent
- BRP Inc. (DOO-T), up 18 per cent
- Equinox Gold Corp. (EQX-T), up increased 15 per cent
- SSR Mining Inc. (SSRM-T), up 15 per cent
- DPM Metals Inc. (DPM-T), up 14 per cent
Stocks with the largest negative revisions to their target prices over the past month include:
- MDA Space Ltd. (MDA-T), down 21 per cent
- NFI Group Inc. (NFI-T), down 6 per cent
- Canadian National Railway Co. (CNR-T), down 4 per cent
- Air Canada (AC-T), down 3 per cent
As of Sept. 30, the S&P/TSX Composite Index was trading at a price-to-earnings multiple of 17.3 times the forward 12-month consensus earnings estimate, according to Bloomberg. Earnings estimates have increased over the past four weeks. Over the next 12 months, earnings growth is now forecast to come in at 10.34 per cent.
Historically, October has been an unpredictable month. The S&P/TSX Composite Index rallied 0.65 per cent in October of 2024, declined 3.42 per cent in 2023, advanced 5.32 per cent in 2022, climbed 4.82 per cent in 2021 and dropped 3.35 per cent in 2020. The S&P/TSX Composite Index posted losses in eight of the past 20 Octobers.
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. Data is as of Sept. 30.
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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