Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
TD, National are top picks
BofA Securities analyst Ebrahim Poonawala previewed profit results for the major Canadian banks,
“Canadian bank stocks have benefited from a positive halo effect - a resource-rich economy, pro-business Carney government. Combined with earnings growth momentum (capital markets, wealth, share buybacks), investors have been willing to look past a challenged domestic macro-economic backdrop (jobs, housing) and USMCA uncertainty …Given that our constructive view on the group (Buy ratings on four of the six banks) has been met with strong stock performance over the last 18 months - not always for all the same reasons we expected - we wrestle with the proposition of moving to a more cautious tilt with stocks trading near all-time highs, premium valuations vs. history, strong EPS growth forecast FY26-28. Sensitizing FY27 estimated EPS for capital flex (to 12.5-per-cent CET1), normalized impaired PCLs, implies 5-per-cent average EPS upside … The reason for our optimism is the potential that we see for stocks to earn into a normalized valuation given our double-digit EPS growth forecast (13.1-per-cent avg. FY26-28), improving ROEs. Stocks trade at a PEG ratio of 1.2 times vs. 1.5x 5yr pre-pandemic average, with the relative discount reflecting the strong EPS growth outlook. Share buybacks also playing a greater role, accounting for approximately a quarter of our forecasted EPS growth, offers resiliency. Rising interest rates likely among the greatest risks … Messaging from management teams suggests upward pressure on credit costs (PCLs), muted loan growth in domestic P&C, and competitive deposit pricing. Offsetting this, net interest margins likely have another year of expansion, while capital markets momentum remains strong, which in turn should be supportive of wealth/asset management revenues. Revise estimates to reflect softer near-term loan growth and elevated PCLs. POs higher on roll forward to FY27e P/E and P/B. Top ideas into 2Q print: National, TD. TD Bank-TD and National-NA: screen most attractively, supported by capital markets tailwinds (TD secular, NA business-mix), above-average excess capital (TD 14-per-cent-plus CET1; NA additional boost from CWB capital synergies), and scope for better-than-expected efficiency (TD AI deployment, NA P&C strategic review)”
Industrial REITs
Scotiabank analyst Himanshu Gupta believes the backdrop for industrial REITs is improving,
“We hosted our 6th Annual Industrial Real Estate Panel in Toronto on May 14, featuring leading landlords including Dream Industrial (DIR), Granite REIT (GRT), and global heavyweight Prologis (PLD). We also welcomed Colliers (CIGI), one of the largest global brokerages, providing a comprehensive perspective across both landlord and tenant dynamics … Panel discussion lunch was very well-attended while 1x1’s with institutional investors were down slightly on year-over-year. ... We got a sense that the fundamental backdrop is turning more constructive. 2020-2022 was the period of ‘excess demand’ i.e. COVID surge. Then, came the ‘excess supply’ in 2023-2026 i.e. right sizing, and as we get into H2/26, the panel sees a period of equilibrium or normalization. Maintain SO [’sector outperform’] rating on DIR and GRT (remains our top pick)."
Copper miners
RBC Capital Markets analyst Sam Crittenden summarized the major market in volatile copper trading,
“Copper prices surged to near-record highs last week, up to a $6.40/lb peak as Chinese demand remained strong and global supply concerns intensified. We believe the rally was fueled by declining Chinese copper inventories signaling strong consumption from the world’s top consumer, while supply headwinds have risen on multiple fronts: a Middle Eastern sulfur shortage, while Peru’s political uncertainty ahead of a June 7 presidential runoff between leftist Roberto Sanchez and conservative Keiko Fujimori has raised fears that a Sanchez victory could trigger greater state intervention and higher mining taxes. Supply pressures are also emerging from major copper producers like Chile, where the economy recorded its sharpest annual decline in more than three years in Q1 due to lower copper grades, adverse weather conditions, and maintenance issues that reduced production. In Argentina, however, President Milei approved a number of incentives under the RIGI program for two large mining projects last week. We view this as a positive development for companies preparing to submit or that have already submitted their RIGI applications, such as Lundin (Vicuna) and First Quantum (Taca Taca)”
RBC analysts have “outperform” ratings on First Quantum (it’s a “speculative outperform” however), Capstone, Hudbay, and Sandfire.
Bluesky post of the day
The global stock market has virtually become “One Big Trade”, according to Goldman Sachs. “AI Is Penetrating Every Corner of Financial Markets”, notes Apollo. Is it really just one big Nvidia trade though? www.ft.com/content/29ad...
— Robin Wigglesworth (@robinwigglesworth.ft.com) May 20, 2026 at 4:31 AM
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Diversion
“Someone Dropped This Notebook in a Medieval Toilet 700 Years Ago—and It’s Still Legible” - Gizmodo