3 Top Canadian Stocks to Buy Ahead of Earnings
The Motley Fool
Published Oct 19, 2021 12:23
Updated Oct 19, 2021 12:46
3 Top Canadian Stocks to Buy Ahead of Earnings
Amid the U.S. financial institutions posting substantial numbers last week, the Canadian equity markets have continued their uptrend. The S&P/TSX Composite Index hit a new high yesterday and is trading over 20% higher for this year. So, amid increased investors’ optimism, here are three top Canadian stocks that you can buy ahead of earnings.
Waste Connections Waste Connections (TSX:WCN)(NYSE:WCN) has witnessed a strong buying this year, with its stock price rising by over 23%. The strong performance in the first two quarters and raising of 2021 guidance by the company’s management appear to have increased investors’ confidence, driving its stock price higher. Meanwhile, the company will post its third-quarter earnings after the market closes on October 27.
I am optimistic about the company’s performance, given the essential nature of its business, strategic acquisitions, rising demand for its services amid growing economic activities, and the recovery in the energy sector. Also, the company usually operates in secondary or exclusive markets, thus avoiding competition while maintaining its margins.
Waste Connections’ management has set optimistic guidance for the third quarter, with its revenue and adjusted EBITDA expected to grow by 12% and 14%, respectively. Meanwhile, analysts are expecting the company to beat its guidance. So, they look bullish on the stock. Of the 17 analysts following Waste Connections, 15 have issued a “buy” rating, while one each has given a “hold” and “sell” ratings. Their consensus price target stands at $168.79, with an upside potential of 4.8%.
Restaurant Brands International My second pick would be Restaurant Brands International (TSX:QSR)(NYSE:QSR), which will be reporting its third-quarter earnings on October 25 before the market opens. I expect a significant improvement in the company’s performance amid the reopening of the dining space due to the easing of restrictions, expansion and increased adoption of digital channels, the introduction of new menu items, and an acceleration in new restaurant openings.
Meanwhile, analysts expect Restaurant Brands International to post an adjusted EBITDA and adjusted EPS of US$606.62 million and US$0.74 per share, respectively. These estimates represent year-over-year growth of 8.1% and 8.8%, respectively. Despite its healthy growth prospects, the company is trading over 3% lower for this year. So, investors should utilize the discount on its stock price to accumulate the stock to earn superior returns.
Analysts also look bullish on the stock, with 20 of the 32 analysts covering the stock having issued a “buy” rating. The consensus price target stands at $87.67, representing an upside potential of 16.2%.
Get The App
Canfor (TSX:CFP) My final pick would be Canfor (TSX:CFP) , which has corrected over 18% from its May highs due to a pullback in lumber prices. However, lumber prices have increased by over 50% from August lows. So, the recovery in lumber prices and strong operating performances across all regions could drive the company’s third-quarter financials. Meanwhile, the company has planned to report its third-quarter earnings on October 27.
Analysts project Canfor to post revenue of $1.69 billion, representing year-over-year growth of 9%. Its adjusted EBITDA could grow by 6.4%. Despite healthy growth prospects, the company is trading at an attractive forward price-to-sales multiple of 0.6.
Analysts are also bullish on the stock, with six of the seven analysts issuing a “buy” rating. Their consensus price target stands at $38.83, representing an upside potential of over 32%.
The post 3 Top Canadian Stocks to Buy Ahead of Earnings appeared first on The Motley Fool Canada.
The Motley Fool recommends Restaurant Brands International Inc. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.