This TSX stock fought its way back from the AI software rout and may have ‘strong growth prospects’

Why now is not the time to buy the dips from the war in Iran, how projects of national interest could help Canada’s freight stocks and more from The Week in Stocks.

Stock of the week: Thomson Reuters Corp.

Thomson Reuters Corp.

(TRI:TSX) added this week to its nearly 35 per cent rebound from early February, more than gaining back the losses it suffered when it got caught in the recent

artificial intelligence

-related software rout. TD Cowen analysts led by Vince Valentini reconfirmed the company as a top pick and had a price target of $175 in a March 3 note based on the results of a survey of 100 U.S.-based law firms to assess their use of generative AI services. Shares closed Friday at $151.44. Thomson Reuters got swept up in a software stock selloff after AI company Anthropic released a set of tools markets believed would erode the business of legal software and publishing companies. However, based on the survey results, TD thinks Toronto-based Thomson Reuters can benefit more from AI than be hurt by it and that “new AI players are not disrupting its legal service.” TD said, “We believe the selloff in Thomson Reuters is overdone,” adding, “We believe TRI displays many attributes … to maintain a sustainable moat and strong growth prospects.” The 12-month consensus price target of $177.97 is based on 17 analysts, according to Bloomberg.

Now is not the time to buy the dips, says David Rosenberg

The price of West Texas Intermediate, the North American crude oil benchmark, is up more than 22 per cent since the war in Iran started, positioning rising

energy prices

as the top risk. “As is usually the case in military conflicts, as we saw early on after Russia waged war on Ukraine, it comes down to energy prices in terms of the shock waves to all corners of the financial markets,”

David Rosenberg

, president of Rosenberg Research & Associates Inc., said in a note. And those “shock waves” are being felt. Liquefied natural gas (

LNG

) prices in Europe soared 50 per cent after Qatar was forced to shutter its LNG plant, while the Strait of Hormuz, a critical “chokepoint” for oil transportation, is essentially closed. Further, investors seeking safety are flocking to the U.S. dollar, boosting its value and making it tougher for the economy and the “risk-on” — or higher tolerance for risk — trade. “For the global economy and capital markets, the timeline here cannot last much longer than the four weeks that has been bandied about by the (U.S.) administration,” Rosenberg said. However, investors who are thinking of buying the dips with the S&P/TSX composite index and the S&P 500 index down two per cent and just under one per cent this week, respectively, could get be getting ahead of themselves. Rosenberg said the VIX — the volatility or fear index index — needs to rise to 50 to signal “capitulation.” It’s currently sitting at around 24. “This typically is the most ideal time to start putting cash to work … unless this war with Iran is resolved first,” Rosenberg said.

11 major projects could help these Canadian freight stocks, says CIBC

There could be a light at the end of the tunnel for Canada’s freight carriers, which have suffered through four years of recession-like conditions due to sluggish volumes, according to CIBC Capital Markets. Analysts led by Kevin Chiang think freight volumes can ride the “tailwind” that will be created by Canada’s 11 projects of national interest. They assume $84 billion will be spent on the major projects over a 10-year period starting from 2025 that could lift freight volumes by 1.8 per cent year over year. CIBC covers four companies in Canada’s freight space —

Canadian National Railway Co.

(CN:TSX),

Canadian Pacific Kansas City Ltd.

(CP:TSX), Mullen Group Ltd. (MTL:TSX) and

TFI International Inc.

(TFII:TSX).

CN and Mullen Group are their top picks because they say these are situated to benefit the most from the group of projects. For example, CN operates in many of the areas where projects will be built including the North Coast transmission line and the Ksi Lisims LNG project in British Columbia, Canada Nickel’s Crawford Project in Ontario, and Nouveau Monde’s Matawinie Mine in Quebec. For Mullen Group, CIBC thinks its strong western presence sets it up to benefit from the Red Chris Mine and LNG Canada phase II, both in B.C., the McIlvenna Bay Copper Mine in Saskatchewan, and the other B.C. projects. “We would also make the case that these infrastructure projects are not being priced into Canadian freight equities today,” they said.

Price target hikes and a cut

• CIBC Capital Markets analyst Anita Soni hiked her price target for Agnico Eagle Mines Ltd. (AEM:TSX) to $427 from $404 on year-end reserve and resource updates that added additional ounces to projects in the Canadian Malartic region, at Detour Lake, and at Hope Bay. Shares closed Friday at $300.11.
• Analysts from several investments houses cut their price targets for Pet Valu Holdings Ltd. (PET:TSX) after it reduced its EPS for 2026. National Bank Capital Markets analyst Vishal Shreedhar reduced his target to $27 from $37, while TD Cowen analyst Michael Van Aelst cut his to $34 from $40. Shares closed Friday at $24.33.
• UBS Group analyst Josh Spector hiked his price target for Methanex Corp. (MX:TSX) to $82 from $73 on a “tighter” global methanol market. Shares closed Friday at $24.33.
• TD Cowen analyst Menno Hulshof hiked his price target for Canadian Natural Resources Ltd. (CNQ:TSX) to $64 from $51 on his belief that the company is a “core energy holding.” Shares closed Friday at $62.96.
• BMO Capital Markets analyst Thanos Moschopoulos raised his price target for MDA Space Ltd. (MDA:TSX) to $50 from $45 on “solid” fourth-quarter earnings and a possible pipeline of several low-Earth orbit constellation satellites. Shares closed Friday at $40.43.

Editor’s note: The Keeping Score charts will return in next week’s The Week in Stocks column. 

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• Email: gmvsuhanic@postmedia.com