Canadian stocks received a boost as the nation’s economy outperformed expectations in the first quarter of 2025, with leading names like Royal Bank of Canada (RY), BCE Inc. (BCE), and Constellation Software (CSU) drawing investor attention. Statistics Canada reported that real GDP expanded at an annualized rate of 2.2%, outpacing both analyst forecasts and the Bank of Canada’s own projections.
A surge in exports largely drove the growth, as businesses rushed to fulfill orders ahead of anticipated U.S. tariffs, offsetting softer domestic demand.
Royal Bank of Canada posted solid revenue growth in its latest quarter, supported by strong commercial loan activity and the integration of HSBC Bank Canada. However, the bank’s earnings per share fell slightly short of expectations, and increased provisions for credit losses highlighted ongoing caution in the sector.
Despite a modest dip in share price after earnings, RY has demonstrated resilience, maintaining a robust capital position and raising its dividend, signaling management’s confidence in long-term fundamentals.
BCE Inc. also saw its stock gain ground following better-than-expected first-quarter earnings, even as revenues declined year-over-year. The telecom giant’s strategic partnership with PSP Investments to expand U.S. fiber infrastructure was well received by the market, helping to drive shares higher. BCE’s focus on free cash flow and balance sheet strength has reassured investors amid ongoing industry and economic headwinds.
Constellation Software continued its impressive run, reporting double-digit revenue and earnings growth. The company’s disciplined acquisition strategy and consistent operational execution have positioned CSU as a standout in Canada’s technology sector.
With shares trading near all-time highs, Constellation’s performance underscores the broader strength in select Canadian equities despite global market volatility.
While the first-quarter economic surge has lifted sentiment, analysts caution that trade uncertainty and potential tariff impacts could weigh on growth in the coming months.
Nevertheless, the outperformance of key Canadian stocks like RY, BCE, and CSU reflects investor optimism in the resilience and adaptability of the country’s leading companies as they navigate a shifting economic landscape.
