Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
BMO economist Robert Kavcic explains why the S&P/TSX Composite is well positioned – better than the technology-heavy S&P 500 – for a recovering North American economy,
“The TSX rallied to record territory Thursday, closing above the 18,000 level for the first time. This now firmly marks a full recoup of all the COVID-related losses through 2020. Canadian stocks have benefited from recent strength in banks and energy more broadly. Recall that Canada has little exposure, by weight, to what was working earlier in the pandemic—technology and consumer discretionary. This week’s Democrat wins in Georgia helped reinforce this rotation (especially into banks) … and a firmer U.S. economy is always a boon for Canada”
“@SBarlow_ROB now BMO: TSX well positioned for recovering NA economy” – Twitter
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Goldman Sachs U.S. equity strategists listed the stocks representing the highest sales growth for 2021 according to the company’s analysts.
The top ten in order are Booking Holdings, Tesla Inc. , Boeing Co., Qualcomm Inc., Advanced Micro Devices, Chevron Corp., ServiceNow inc., TJX Companies Inc., Facebook Inc. and Exxon Mobil Corp.
“@SBarlow_ROB GS: Biggest expected sales growth for 2021” – (full table) Twitter
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Citi analyst J.B. Lowe initiated coverage on Guelph, Ontario-based (but U.S.-traded) Canadian Solar (my emphasis),
“CSIQ shares were up over 130% in 2020, as a supportive macro outlook for solar installation growth was compounded by investor rotation into the energy transition theme. We think the stock has more room to run given 1) continued macro tailwinds support module capacity expansion and vertical integration; 2) a growing and stabilizing project development business should help improve the valuation multiple; and 3) upside from energy storage installations. Our $71 TP is the high on the Street and we are well above consensus in 2021 and 2022. Module Capacity Expansion to Support Margins:
The robust growth outlook for solar installations (10%+ CAGR [compound annual growth rate] through 2025) supports CSIQ’s planned capacity expansion. The company will spend $1.2B in 2020-21 to expand module capacity by nearly 2x”
The $71 price target implies 25 per cent upside to Thursday’s close. Mr. Lowe does qualify the stock as high risk, however.
“@SBarlow_ROB Citi likes Canadian Solar:” – (research excerpt) Twitter
“Friday’s analyst upgrades and downgrades” - Globe Investor
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Diversion: “The 20 Most Anticipated Movies of 2021” – The Ringer (podcast)
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Scott Barlow