This TSX stock is making a global push with one analyst pricing in 40% upside for his top pick. The Week in Stocks also highlights why Dollarama bulls outnumber bears, how a possible Iran peace deal could smooth the waters for cruise line stocks, and more.
TMX Group Ltd.: A Global Push with 40% Upside Potential
TMX Group Ltd. (X/TSX) continues its global expansion with the acquisition of RAFI Indices, a global index company, for $683 million, approximately five per cent of TMX's market cap. Scotia Capital Markets analyst Phil Hardie views this deal positively, supporting TMX's goal of expanding recurring revenue and boosting international revenue. Hardie maintains TMX as his top pick with a price target of $71, representing about 40% upside from its recent close of $50.48. He believes the RAFI acquisition reinforces his thesis of continued earnings momentum and that accretive M&A remains a key catalyst over the next 12–18 months. While the deal adds to debt, Hardie notes TMX has a track record of successful deleveraging, and the company pledges to maintain its long-term dividend payout ratio of 40% to 50%. TMX shares have been volatile this year, falling to about $44 in February, rising 26% to $56 in May, then slumping to under $48 in early June before recovering nearly eight per cent. The 12-month price target based on eight analysts is $65.03, according to Bloomberg.
Dollarama: Bulls Outnumber Bears Amid Trade-Down Trends
UBS analyst Michael Lasser examined bull and bear cases for Loblaw, Alimentation Couche-Tard, and Dollarama. On Dollarama, bulls argue that financially-stretched Canadian consumers will continue to trade down to the discount chain, while bears warn that its move into Australia could drag on earnings amid immigration policy changes. Dollarama has a 12-month price target of $210.08 based on 17 analysts, with shares closing at $190.94. For Loblaw, sentiment is mixed: bulls see continued gains from its discount footprint, while bears worry about slowing population growth impacting its multiple. Loblaw's price target is $70, with shares at $65. Alimentation Couche-Tard has more positive sentiment due to its cheap meal offerings, with a price target of $92.82 and shares at $84.31.
Iran Peace Deal Could Boost Cruise Stocks
Shares of Carnival, Royal Caribbean, and Norwegian Cruise Line rose 6-8% on reports of a possible interim Iran peace deal that would reopen the Strait of Hormuz. TD Cowen analyst Kevin Kopelman cut his 2027 Brent crude oil estimate to US$60 from US$90, which could drive EPS revisions for cruise companies. His top pick is Carnival, with a 23% EPS increase estimate for 2027 to US$3. Carnival, which does not hedge fuel costs, is down 11% since the conflict started versus a 7.5% S&P 500 gain. Its 12-month price target is US$34.09, with shares at $29.18. Kopelman also increased EPS estimates for Royal Caribbean by 7% and Norwegian by 27%.
