2 TSX Stocks Poised to Have a Big Summer

These two TSX stocks have come a long way down, but could come roaring back upwards this summer on strong earnings.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published June 6, 2024 3:30 pm EDT

Interest rates are coming down, and this has been big news for many companies already. Yet when it comes to investing in stocks that are now poised to have a big summer, there are some due to drive up more than others.

Today, we’re going to look at the TSX stocks most likely to see their shares surge this summer. And in my view, those could be Lightspeed Commerce (TSX: LSPD) and Canadian Tire (TSX: CTC.A).

dividends grow over time — Source: Getty Images

Lightspeed stock

First, let’s get into Lightspeed stock. After bringing back Dax Dasilva as chief executive officer (CEO) of the company, Lightspeed stock has been making some fairly big moves. First off, Lightspeed reported a robust financial performance for the fiscal year ending March 31, 2024, with a 25% year-over-year revenue growth to US$230.2 million. The company also showed improved net loss and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) figures. This can boost investor confidence and attract new investments.

Furthermore, the company recently announced a partnership with Uber to integrate Uber Direct and Uber Eats into Lightspeed’s platform. This move can significantly enhance Lightspeed’s service offerings, making it more attractive to a broader customer base, particularly in the retail and restaurant sectors.

Lightspeed stock has also undertaken cost-reduction initiatives, including a 10% reduction in headcount-related operating expenditures. Additionally, the company has authorized a share-repurchase program for up to 10% of its public float. This can support the stock price by reducing the number of shares outstanding and signalling management’s confidence in the company’s future prospects.

Now, Lightspeed stock continues to expand its market presence and innovate its product offerings. Recent updates include new product features aimed at helping businesses scale more effectively. This can drive revenue growth and market share.

Canadian Tire stock

Then there’s Canadian Tire stock, which also saw its shares drop in the last few years but could be in for a climb. First, let’s go over its recent expansion of its Triangle Rewards Program. Canadian Tire is set to launch a loyalty partnership with Petro-Canada in March 2024, extending its Triangle Rewards program to over 1,800 gas stations nationwide. This move is expected to boost customer engagement and sales.

Furthermore, the company has been investing in enhancing the customer experience. This has been through store refreshes, new store openings, and improved omni-channel capabilities like pick-up lockers and same-day delivery services. These improvements are likely to attract more customers and increase sales.

What’s more, in response to a decline in sales, Canadian Tire has implemented cost-saving measures, including layoffs at the corporate level. This is expected to save around $50 million and help stabilize the company’s financials in the face of softening consumer demand.

Despite mixed results in recent financial performance, analysts have provided a 12-month price target averaging $144.63. Some expect it to reach as high as $190. This indicates a potential upside for the stock if the company can navigate the current economic challenges successfully. So, with a current dividend yield at 5% as of writing, it’s looking like a strong stock to pick up for a hefty summer.