Four changes to Scotia strategist’s top 30 Canadian stock picks

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

TD and Centerra in, Celestica and Empire out

Scotiabank strategist Jean-Michel Gauthier made four changes to his quantitatively driven top 30 stock lists, adding Toronto-Dominion Bank (TD-T) and Centerra Gold Inc. (CG-T) and removing Celestica Inc. (CLS-T) and Empire Co. Ltd. (EMP.A-T).

The list now is: Enerflex, Parex Resources, NuVista Energy, CES Energy Solutions, Peyto Exploration and Development, Athabasca energy, Advantage Energy, Tamarack Valley Energy, OceanaGold, New Gold, Centerra Gold, IAMGOLD, SSR Mining, DPM Metals. Endeavour Mining PLC, G Mining Ventures, K92 Mining, Kinross Gold, Wesdome Gold Mines, Lundin Gold, Badger Infrastructure Solutions, Finning, Linamar, Magna, Gildan Activewear, Saputo, TD Bank, CIBC, Fairfax Financial Holdings and Altagas.

High single digit returns for banks

BMO bank analyst Sohrab Movahedi is constructive on the sector and ranked the major banks by preference,

“2025 marked a year of strong momentum for the Canadian banks. The Canadian bank index returned almost 46 per cent during the year, outperforming the S&P/TSX Composite Index by 1,380 basis points on a total return basis. All of the ‘Big 6′ Canadian banks beat the composite, with TD, the best performing bank, outperforming BMO, the worst, by 4,380bps. The Canadian bank index has a strong history of outperforming the broader market; since 1970, the bank index has outperformed the composite in 71 per cent of the years.

“Looking ahead, we are increasingly constructive on the operating environment for Canadian banks and expect a high-single-digit total return on the Canadian bank index over the next year or so. Our Outperform-rated names, in order of preference, remain RY, TD, NA, and CM, among the large banks”.

Headwind for oil sands

The daily Morgan Stanley summary of high importance research reports included analysis of global crude markets that might negatively affect oil sands producers,

“MS Research Analyst and Commodities Strategist Devin McDermott and MS Research Analyst Joe Laetsch think recent events could eventually lead to higher oil exports from Venezuela, a potential tailwind for coastal US refiners (better access to heavy crudes) and headwind for most oil producers (especially Canadian oil sands). Devin points out that CVX (OW, $180 PT) and COP (OW, $117 PT) stand out as relatively better off. He notes that Venezuela produced ~900 kb/d of oil and exported ~800 in 2025. He states this compares to >2 mb/d 10 years ago and a peak of 3.5 mb/d in the late 1990s. Devin believes that the NT [near term] supply impact appears limited (beyond a return of ~200 kb/d recently lost from the US blockade), but the oil market is already very oversupplied in 1H26. In the event of an easing of sanctions, he thinks well workovers and [infrastructure] repairs could potentially add at least 300-400 kb/d of supply over 12-18 months. Devin states that CVX is the one US operator that has retained a presence in Venezuela and is arguably best positioned to scale up production if conditions warrant, while COP and XOM (OW, $137 PT) both have unpaid arbitration awards for asset expropriation by the Venezuelan Government (most material for COP). Devin thinks US producers would likely need to see a viable path to recouping any outstanding payments or arbitration awards, have confidence in the stability of the (new) government, and be comfortable with the fiscal terms before allocating any large amounts of capital to the country - something that might take time. Joe notes that the US refining system and the Gulf Coast in particular is designed to process heavy crude, including Venezuela grades. Should the recent events lead to increased heavy crude availability through higher production and/or rerouting of Venezuela trade flows, he would expect light-heavy oil differentials to widen, providing a tailwind to realized refining margins. Within his coverage, VLO (EW, $175 PT) and MPC (OW, $200 PT) have the most USGC exposure. Should increased Venezuela crude availability pressure other heavy grades including WCS-WTI differentials, he states that PSX (EW, $140 PT), DINO (OW, $60 PT), and PBF (UW, $27 PT) could also see tailwinds”

Bluesky post of the day

Diversion

“Something grim is happening to people who go off GLP-1s” - Futurism