TSX breakouts: Bank stocks soar with one trading at a decade-high multiple
Gold stocks continue to shine, representing roughly 20 per cent of the securities on the positive breakouts list.
Another leading segment of the market is the banking sector. Shares of CIBC (CM-T), Scotiabank (bns-T) and TD (td-T) are all on the positive breakouts list. Not far behind are shares of Royal Bank (ry-T) and the Bank of Montreal (bmo-T), which are both within 1 per cent of their record closes reached earlier this month.
CIBC stands out based on its valuation. According to Bloomberg, shares of CIBC are trading at a price-to-earnings multiple of 11.7 times the fiscal 2026 consensus earnings estimate. Looking back over the past decade, this is the highest P/E multiple the stock has traded at and significantly above its 10-year average multiple of 9.4 times.
While all five Canadian bank stocks are trading above their 10-year average multiples, CIBC has the widest gap. For instance, at the other end of the spectrum is Scotiabank, which is trading at a P/E multiple of 10.1 times the fiscal 2026 consensus estimate compared to its 10-year average multiple of 9.7 times. Scotiabank is the only Big Five bank stock with a negative year-to-date price return. Its shares are down 0.65 per cent in 2025.
Given the recent run-up in the share price, CIBC's current dividend yield of 3.8 per cent is one of the lowest of the Big Five bank stocks - only Royal Bank has a lower yield.
During its recent rally, a senior executive was selling shares of CIBC. On June 30, vice-chair, North American banking Jon Hountalas exercised his options, receiving 43,490 shares at a cost per share of $55.845, and sold 43,490 shares at an average price per share of approximately $96.31. Net proceeds totaled over $1.7 million, excluding any associated transaction fees.
Shares of CIBC closed at a record high of $101.22 on July 22. However, based on the Street's average target price of $99.25, the stock may be fully valued, and price momentum in the near term could be limited.
The Breakouts file is a technical analysis screen intended to identify companies that are technically breaking out. If a stock appears on the positive breakouts list, this indicates positive price momentum, and that a company may be worthwhile for investors to look at the fundamentals in order to determine if the recent price strength is warranted and will continue. Conversely, if a stock appears on the positive breakouts list, it may reflect a stock that is overbought in the near-term and vulnerable to a pause in the price momentum or a pullback, especially if investors decide to take some profits off the table. If a security appears on the negative breakouts list, it indicates negative price momentum, and may signal deteriorating fundamentals or may reflect a buying opportunity if the stock is undervalued by the market.
Securities screened are from the S&P/TSX Composite Index, the S&P/TSX SmallCap Index, as well as Canadian small cap stocks outside of these indices that have a minimum market capitalization of $200-million.
A technical analysis screen does not replace fundamental analysis but can help identify companies worth having a closer look at.
This report should not be considered an investment recommendation for any of the listed securities.
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