Credit Suisse sees three top Canadian stocks to buy and one sell
Sep. 16, 2022 9:02 AM ET Brookfield Asset Management Inc. (BAM.A:CA), BAM, AEM, AEM:CA, CM:CA, LB:CA, CM, LRCDF GOLD, BMO, ABX:CA, TA:CA, EDV:CA, INE:CABy: Kim Khan, SA News Editor 12 Comments
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Financials dominate a short list of top Canada investment ideas from Credit Suisse.
"Every Canadian research analyst identifies and ranks up to 3 Outperform rated stocks based on a 6-12 month time horizon," Credit Suisse's Andrew St. Pierre wrote in a note. "For the #1 Top Pick, we expand our analyst’s view by including Investment Thesis, Catalysts, Debates, Pushback, and Valuation."
The top Outperform picks are Brookfield Asset Management (NYSE: BAM) (BAM.A:CA), Agnico Eagle Mines (NYSE: AEM) (TSX: AEM:CA) and Canadian Imperial Bank (TSX: CM:CA) and the Underperform idea is Laurentian Bank of Canada (TSX: LB:CA).
"BAM's core franchise and the overall platform continues to be positively positioned on a longer-term basis and is benefitting from accelerated fund raising, deal deployment and monetizations," analyst Andrew Kuske wrote. "Continued progress with these efforts, growth from the insurance business along with accelerated real estate re-packaging could result in upside to our existing forecasts and valuation."
Kuske's second top pick was Innergex Renewable Energy ( INE:CA) and the third was TransAlta ( TA:CA).
"Agnico Eagle is our top gold pick," analyst Fahad Tariq wrote. "The new Agnico, following the merger with Kirkland Lake earlier this year, is a top 3 gold producer globally with the lowest production costs among senior gold producers and superior ESG performance. We think Agnico Eagle’s growing production profile and high-quality asset base (mostly in Canada) allow for re-rating potential, along with synergy realization and room for increased capital return."
Endeavour Mining ( EDV:CA) is the second top pick and Barrick Gold ( GOLD) ( ABX:CA) rounds out the top three.
"We believe CM is well positioned to deliver strong performance through many of its growth drivers, including its domestic P&C segment and the U.S business, in terms of loan growth and margin expansions (despite more muted expectations from the latter)," analyst Joo Ho Kim wrote. "The bank’s allowance levels and capital ratio also remain at a solid place, and we think its overweight domestic mortgage exposure could be favorable from a credit perspective in a slowdown. CM continues to trade at a steep relative discount to the group, and we see further upside for expansion."
He chose Bank of Montreal ( BMO) ( BMO:CA) second and National Bank of Canada ( NA:CA) third.
"LB is undergoing a significant strategic transformation that will take multiple years to execute and deliver, in our view," Kim added. "Revenue growth has lagged the peer group, reflecting a slowdown in its personal banking unit. Although many other areas of the bank are delivering, including commercial loan growth and the continued focus on expenses, we believe a consistent delivery of its objectives is the key. Despite the shares trading under book value, we look for signs of improvement." |
