After a strong 2021, TSX still has room to run: NBF

By James Langton | January 13, 2022 | Last updated on January 13, 2022
1 min read
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Canadian stocks had an exceptional 2021, with the S&P/TSX composite index producing a 25.1% total return, but there’s still room for stocks to rise, says National Bank Financial Inc. (NBF).

In a research note, the firm said that, despite the market’s strong performance last year, valuations remain reasonable, as the market gains came on the back of a record rise in corporate earnings.

“Importantly, the earnings forecasts underlying the 2022 forward [price-earnings ratios] are reasonably conservative in our view, calling for [earnings-per-share] growth of 7% in 2022,” it said.

As a result, even in light of last year’s market gains, “we believe there is still gas in the tank” for Canadian stocks in 2022, NBF said.

The firm continues to overweight stocks generally, and the Canadian market in particular, in its asset allocation models.

Within the equities segment, NBF said it favours value over growth stocks, “given our expectation of rising long-term interest rates and yield-curve slope.”

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.