In July, the S&P/TSX Composite Index advanced 1.06 per cent, ending the month near a record high.
There were nine sectors that delivered positive price returns in July. Sector leaders were energy, health care, consumer staples, consumer discretionary and technology with gains of 6.9 per cent, 2.23 per cent, 1.42 per cent, 1.1 per cent and 1 per cent, respectively. The two sectors that realized negative price returns were communication services and materials with losses of 3.3 per cent and 3.06 per cent, respectively.
Year-to-date, the TSX Index is up 11.08 per cent with positive price returns in eight of the 11 sectors. There are five sectors with double-digit returns. Energy, financials, utilities, industrials and health care have gains of 29.92 per cent, 22.16 per cent, 16.56 per cent, 10.29 per cent and 10.08 per cent, respectively. Technology is the worst-performing sector with a loss of 16.81 per cent and communication services is the second worst-performing sector with a loss of 10.62 per cent.
The top 10 performers in the S&P/TSX Composite Index in July were:
- Bausch Health Companies Inc. (BHC-T), up 38 per cent
- Mullen Group Ltd. (MTL-T), up 27 per cent
- Vermilion Energy Inc. (VET-T), up 26 per cent
- Suncor Energy Inc. (SU-T), up 23 per cent
- Cenovus Energy Inc. (CVE-T), up 20 per cent
- Canadian Natural Resources (CNQ-T), up 19 per cent
- Methanex Corp. (MX-T), up 19 per cent
- Thomson Reuters Corp. (TRI-T), up 19 per cent
- Imperial Oil Ltd. (IMO-T), up 14 per cent
- Kelt Exploration Ltd. (KEL-T), up 14 per cent
Stocks with material positive revisions to their average target prices over the past month include:
- Mullen Group Ltd. (MTL-T), increased 35 per cent to $29.50 from $21.80
- Great-West Lifeco Inc. (GWO-T), increased 21 per cent to $97.09 from $80.27
- Badger Infrastructure Solutions Ltd. (BDGI-T), increased 20 per cent to $111 from $92.44
- Power Corp. of Canada (POW-T), increased 17 per cent to $99.78 from $85.56
- IGM Financial Inc. (IGM-T), increased 15 per cent to $88.88 from $77.13
- Canadian National Railway Co. (CNR-T), increased 15 per cent to $194.83 from $169.51.
As of July 31, the S&P/TSX Composite Index was trading at a price-to-earnings multiple of 16.9 times the 2026 consensus earnings estimate, up from a multiple of 16.4 times last month, according to Bloomberg.
Double-digit earnings growth is expected over the next 12 months with current expectations pegged at 21 per cent, down from expectations of 23 per cent reported last month.
Now, here’s a look at analysts’ current target prices, recommendations, forecast returns and yields for all 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.