The holiday season is upon us. Planning for vacations and shopping is gaining momentum. And yet the stock market saw a correction on November 12 as the US government shutdown came to an end. The markets are waiting for the upcoming policy decisions around interest rates, as a lack of macro data has left investors and policymakers in the dark. The market correction has created a buying opportunity for the holiday season stocks.
A holiday opportunity to seize with these two TSX stocks
Air Canada
Air Canada (TSX:AC) stock has fallen 6% since November 12 despite reporting resilient third-quarter earnings. The stock made a sharp 15% dip in the first week of August as a labour strike cost the airline more than 3,200 cancelled flights, which converts to $375 million in lost Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).
Despite higher operating costs, labour unrest, and travel demand normalizing from the post-pandemic times, Air Canada ended the third quarter with a profit and positive free cash flow. This was possible as the airline significantly reduced its net debt to $4.8 million from $7.5 billion in 2022.
Air Canada has a strong balance sheet that can withstand headwinds. The airline has normalized its debt, which ballooned during the pandemic. It has started buying back shares to reduce the dilution from the equity capital raised during the pandemic. Three years later, the airline has recovered from the pandemic crisis, but the stock has not yet recovered to its pre-pandemic peak of $50.
| Particulars | 2019 | 2024 | 9 Months of 2025 |
| Revenue | $19.13 | $22.26 | $16.85 |
| Net Income | $1.48 | $1.72 | $0.35 |
| Liquidity | $7.38 | $9.15 | $8.30 |
| Net Debt | $2.84 | $4.92 | $4.80 |
| Adjusted EBITDA | $3.64 | $3.59 | $2.25 |
| Free Cash Flow | $2.08 | $1.29 | $0.21 |
| Adjusted EBITDA margin | 19% | 16% | 13% |
| FCF margin | 11% | 6% | 1% |
The main reason is volatility in EBITDA and the free cash flow margin. The 2024 numbers came close to the 2019 level, when Air Canada was at its performance peak. However, that was triggered by revenge travel, which was set to normalize in 2025.
The fourth quarter could see an uptick in the holiday season rally and drive Air Canada stock from below $18 to the holiday peak of $24, representing a 33% upside. Now is the time to buy the dip.
Shopify stock
Shopify (TSX:SHOP) stock dipped 19% in November after making a new all-time high of $253. This dip has created an opportunity to buy the stock as the seasonal rally of 40–50% picks up. The company witnesses its highest sales during Black Friday and Cyber Monday. This year, it will also see the effect of its artificial intelligence (AI) tools.
The past holiday season rallies have lasted till the first week of February, delivering an average upside of 50%. SHOP could deliver a similar rally as the third quarter numbers showed that Shopify was unaffected by tariffs.
Do these TSX stocks have long-term upside?
The two companies have been recovering from the pandemic impact. While Shopify stock managed to reach its pandemic peak, Air Canada stock has not yet broken the $15–25 post-pandemic range. The year 2026 could see a gradual recovery in the business as the headwinds subside. The two stocks are worth holding on to for the next five years to benefit from their business growth.
You can use the seasonality to make short-term gains and use that gain to buy the dips and hold that for the long term.
