Scotiabank: Canadian Stocks May be Headed for Another Leg Higher

Canada’s stock market may be headed for another leg higher as corporate earnings approach fresh record levels, according to Scotiabank strategists. The firm projects that third-quarter profits for companies on the S&P/TSX Composite Index could surpass the previous record of $405 per share, with consensus forecasts already nearing $400.

Scotiabank analysts said strong U.S. bank earnings are a positive sign for Canadian financial institutions, which make up about 30% of the TSX index. Canada’s major banks are expected to benefit from steady loan growth, stable credit conditions, and higher net interest margins despite lingering concerns about the domestic economy.

Mining companies — another heavyweight sector in the index — are also set to lift overall earnings. The sharp rally in gold prices, driven by global economic uncertainty and safe-haven demand, is expected to boost profit margins across Canada’s resource-heavy equity landscape.

Together, these two sectors could continue to drive profits above expectations and reinforce the 23% gain the TSX has posted so far this year, Scotiabank said. This momentum could help offset broader economic headwinds, including the impact of global trade frictions and slower export growth.

In related news, Scotiabank raised its price target for Enbridge Inc. (TSE: ENB, NYSE: ENB) from C$65.00 to C$69.00, maintaining a “sector perform” rating. The new target implies a potential upside of nearly 4% from Enbridge’s current share price. Analysts cited the company’s stable cash flow, consistent dividend growth, and expanding North American energy infrastructure portfolio as key strengths.

With earnings season underway, Scotiabank’s upbeat outlook suggests that robust financial and mining results could propel the TSX to new highs — reinforcing investor confidence in Canada’s market resilience even amid global uncertainty.

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