Canadian stocks did not have a good week. While U.S. indices rose last week, TD Bank (TD) dropped 5.89%, its worst one-day drop in years. The bank is booking $450 million in provisions for losses, bracing for U.S. regulators to crack down on its past money laundering.
TD may not have introduced strict enough anti-money laundering practices in the last three years. More recently, the firm canceled its plans to buy First Horizon for $13.4 billion. It cited a lack of clarity on when it would get regulator approvals.
Magna (MGA) closed at a 52-week low. Investors are selling shares of the firm, which makes EVs for the soon-to-be bankrupt Fisker. Instead, they are buying Advance Auto Parts (AAP) and Genuine Parts (GPC).
In the Canadian tech sector, Open Text (OTEX) lost 14.72% last Friday. After falling, shares still trade at a 49 times price-to-earnings ratio. It posted revenue of $1.45 billion, up by 16.9% Y/Y. However, cloud revenue accounted for $455 million in revenue and rose by just 4.4%.
For fiscal year 2025, Open Text’s guidance is too weak. BMO Capital downgraded the stock, revising its target price to $38, down from $50.00. Expect OTEX stock to continue falling. When selling pressures end, add the stock to the watch list.
