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WHAT'S ON TAP
HOT OFF THE PRESS
Building permits fall 8%
Building permits fell 8% to $12.5B, coming up short of expectations…
… driven by non-residential activity, which fell 11% or $585M sequentially - led by a $607M institutional decline in BC and $227M industrial headwind in Ontario.
Weaker residential permitting also contributed, falling 6% on $430M less multi-family intentions in BC.
International investment position sheds $310B
Canada’s international investment position dropped by $310B in Q1 to $1.4T, the lowest level since Q3 of 2023…
… driven by a $380B headwind from negative market price movements.
With nearly 70% of our international assets in equities, weakness in US and European stock markets was the main drag - which should reverse next quarter…
… while our external debt should continue to rise, as banks borrow abroad to fund loan growth and Ottawa issues new paper to fund the deficit.
ON OUR RADAR
After the bell TMX Group (X) announced its $683M acquisition of RAFI Indices, representing a 13x EBITDA multiple - or 10x excluding $135M of tax benefits…
… supporting management’s expectation for year one EPS accretion. The transaction adds nearly $90M of run-rate revenue to the company’s VettaFi segment…
… which should support debt reduction post-close, with pro-forma leverage climbing to 2.7x including the recent $409M CBOE acquisition.
Looks good on paper, market should like it.
GAINERS & LOSERS
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Dollarama (DOL) ran 9% on the back of its Q1 results, which blew past estimates on the back of better same-store growth in Canada - driven by a rebound in transaction activity as consumers trade down…
… and continued help from basket growth, as prior price increases flow through. While small on a relative basis, the company’s Latin American unit continues to ramp…
… more-than-offsetting the margin drag from Australia, which is still in the early stages of its transformation. With DOL’s valuation recovering after a guidance-driven selloff earlier in the year…
… investors clearly have confidence in management’s ability to execute.
EARNINGS
YESTERDAY’S EARNINGS
| Company | Actual | Consensus |
|---|---|---|
| 🇨🇦 Dollarama (DOL) | 1.05 | 0.99 |
TODAY’S EARNINGS
| Company | Time | Consensus |
|---|---|---|
| 🇨🇦 Roots (ROOT) | AM | -0.17 |
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