As Canadian banks prepare to release their earnings, investors are urged to pay attention to more than just the numbers, with analysts emphasizing the importance of management’s outlook for the future. Among the top picks in the sector is the Canadian Imperial Bank of Commerce (CIBC), which remains a favorite despite its strong recent performance.
CIBC: A Top Pick Despite Re-rating Surge
CIBC closed at $91.42, down just 6 cents, but continues to capture the attention of Scotia Capital’s Meny Grauman. In a new report, Grauman raised his target price for the bank’s stock to $108 from $85, maintaining his “sector outperform” recommendation. While acknowledging the bank’s impressive outperformance, he advises investors to focus on management’s commentary about future growth. The consensus target stands at $87.12.
“The key for investors will be understanding where management sees opportunities and risks as we head into the next phase of economic recovery,” Grauman said.
Dollarama: Positioned for Strong Performance in 2025
Dollarama, a staple of Canadian retail, closed at $142.95, down $2.56, but remains highly favored by RBC Dominion Securities analyst Irene Nattel. Nattel maintains Dollarama as her top pick, highlighting the retailer’s solid positioning for Canadian consumers facing budget constraints. Dollarama’s value-focused approach is expected to sustain its role as the go-to destination for essential household and seasonal products.
“With consumer budgets under pressure, Dollarama’s deep-value positioning makes it well-suited for the current environment,” Nattel noted. She raised her target price by 9% to $160, up from $147, with a consensus target of $144.82.
Bitfarms: Speculative Buy Amid Bitcoin Optimism
As Bitcoin approaches the US$100,000 mark, boosted by the recent election of a pro-crypto candidate in Donald Trump, Stifel analyst Bill Papanastasiou has upgraded Bitfarms to a “speculative buy” with a target price of US$3.50. The company, which is heavily tied to the performance of Bitcoin, closed at US$2.05, down 6 cents.
“Bitcoin’s rise is set to drive top-line and margin expansion across the crypto sector,” Papanastasiou said, expressing optimism about the long-term outlook for digital assets. However, his new target is still below the consensus of US$4.06.
Barrick Gold: Downgraded Amid Challenges in Nevada
Barrick Gold closed at US$17.68, down 54 cents, and has been downgraded to “neutral” from “outperformer” by CIBC’s Anita Soni. After revising her model to reflect the company’s five-year outlook following its Investor Day event, Soni cited under-investment in Nevada Gold Mines and the post-pandemic inflationary environment as major challenges.
“Barrick faces significant headwinds from its Nevada operations, coupled with the rising costs in the current inflationary environment,” Soni explained. She reduced her target price for the stock to US$22, down from US$27, while the consensus stands at US$24.37.
Jamieson Wellness: Strong Long-Term Outlook
On a positive note, Jamieson Wellness showed resilience with its stock rising by 69 cents to close at $36.60. After meetings with institutional investors, National Bank Financial’s Zachary Evershed remains confident in Jamieson’s long-term strategy. The company has reiterated its commitment to driving margin expansion and sustainable growth.
“Jamieson remains on track to deliver sustainable long-term growth,” Evershed stated. He raised his target price for the company to $42, up from $36.50, with a consensus of $40.82.
Conclusion: A Mixed Bag for Canadian Equities
With earnings season on the horizon, analysts are offering a mixed outlook on key Canadian equities. While some companies, like CIBC and Dollarama, show promising growth potential, others, like Barrick Gold, face significant headwinds. Investors will need to carefully weigh these insights, focusing not just on past performance but also on management’s plans for the future.
