Desjardins 2022 Top Picks Desjardins Securities’ Equity Research team revealed its 2022 outlook and top stock picks in a research note released Monday before the bell.
Expressing caution as the Omicron variant continues to spread and bring volatility to global stock markets, the firm selected 30 equities possessing “the best growth prospects and/or the largest number of expected catalysts” for the next calendar year in 2022.
“While the end of 2021 has served to highlight the ongoing threat of COVID-19 with a surge in cases related to the Omicron variant, prompting new restrictions and the accelerated rollout of booster shots, the economy and markets have proven to be relatively buoyant,” the firm said. ”The TSX reached an all-time high in November, up ~25% on the year before retreating on the back of Omicron fears, with a year-to-date return of close to 19% as of mid-December, well above the long-term average of approximately 9 per cent.
“Following a massive recovery in commodity prices, energy led the way with a remarkable year in 2021 after a very tough 2020. Honourable mentions go to the financial and real estate sectors. While 2022 could be more muted in terms of performance given an expected rough start—with Omicron, capacity restrictions and ongoing labour and supply chain issues, less stimulus, expected interest rate hikes to combat inflation, and a tough comparison vs 2021 — we do expect that navigating toward a full recovery post-pandemic will provide another leg of growth.”
Here are Desjardins’ top investing ideas for 2022:
TFI International Inc. (TFII-T, “buy”) with a $161 target. Average: $132.65.
Mr. Poirier: ““n transportation, we favour TFII for the multiple avenues of value creation embedded in the story, of which the vast majority do not depend on market conditions. Notably, we estimate the stock could be worth $230 per share if management delivers an adjusted operating ratio (OR) of 80 per cent at UPS Freight in 2024, assuming multiples of 10.5 times EV/EBITDA and 22.0 times P/E (all else equal).”