Analysts’ forecast returns and recommendations for all stocks in the S&P/TSX Composite Index

Valuations have come down significantly for stocks.

Year-to-date, the S&P/TSX Composite Index has declined 11 per cent with the Index now trading at trough levels on a forward price-to-earnings multiple basis. According to Bloomberg, the S&P/TSX Composite Index is trading at a forward P/E multiple of 11.2 times the 2023 consensus estimate - a 10-year low and well below its 10-year historical average of 14.4 times. The multiple has compressed rapidly since late 2021.

With earnings season set to ramp up, many investment professionals believe earnings estimates may also be headed significantly lower. However, we have yet to see meaningful revisions in earnings expectations.

Earnings growth for the S&P/TSX Composite Index is expected to be 1 per cent in 2022 and 4 per cent in 2023. In comparison, earnings growth was 30 per cent last year. Over the past month, earnings expectations for the TSX Index have remained relatively unchanged for 2022 and have increased 0.6 per cent for 2023.

To help investors navigate this challenging market, this report includes a link to a list of analysts’ target prices, recommendations, and forecast returns 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.

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.

All data is as of the close on Tues. July 19.

Buys, Holds, Sells, (Consensus Price Target)

Industrials

Finning International - 8 Buys, 1 Hold, 0 Sells ($43.22)
Cargojet - 10 Buys, 2 Holds, 0 Sells ($223.67)
ATS Automation Tooling Systems - 6/6 Buys ($55.50)
Exchange Income Corp - 11/11 Buys ($58.50)
Mullen Group* - 8 Buys, 2 Holds, 0 Sells ($15.40)
WSP Global - 12 Buys, 2 Holds, O Sells ($179.29)
CAE - 9 Buys, 3 Holds, 0 Sells ($40.29)
TFI International - 17 Buys, 3 Holds, 0 Sells ($136.99)

(* Clearly this article was completed before MTL came out with stellar results and received multiple upgrades.)