Analysts’ forecast returns and recommendations for all stocks in the S&P/TSX Composite Index

The second quarter is off to a very tumultuous start.

Month-to-date, the S&P/TSX Composite Index is down 5.5 per cent with 10 of the 11 sectors in the red with losses. The S&P/TSX Composite Index is now in negative territory for the year with a decline of 2.5 per cent.

With the first-quarter earnings season underway, it will be interesting to see if positive quarterly financial results reported by companies can lift the markets. However, the bar seems to be set quite high with analysts’ expectations remaining bullish.

According to Bloomberg, earnings estimates for next year have increased by 1.5 per cent over the past four weeks . Out of the 239 stocks in the S&P/TSX Composite Index, 50 stocks have average 12-month target prices that imply price returns of 50 per cent or more. Meanwhile, just six stocks have negative forecast price returns.

We have included a link to a list of analysts’ target prices, recommendations, and forecast returns for all securities in the S&P/TSX Composite Index grouped by sector and ranked according to their expected price returns (excluding dividend and distribution income). The posted target price for each security is an average of all available target prices from analysts. A target price typically reflect an expected share or unit price 12 months from now based on an analyst’s financial modelling, such as a discounted cash flow model or sum-of-the-parts model. All data is as of the close on Tuesday.

Once all companies have reported their financial results in the weeks ahead, earnings expectations, multiples, and target prices could be adjusted meaningfully depending on the reported earnings and management’s outlook, if provided.

It’s important to note that high target prices which imply stellar returns that seem unbelievable may be just that - unrealistic. At times, when a stock price falls analysts may maintain their bullish expectations, inflating the forecast return. In addition, an outlier (or extreme target price) can skew the average, to the upside or downside, particularly when the number of analysts covering a stock is low. Don’t let a huge projected gain lure you into a position – it is critical to look at the company and industry fundamentals.

Click here to download an Excel version of the guide.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.