Leading Canadian stocks such as Royal Bank (RY), BCE (BCE), and Constellation Software (CSU) are getting a lift after data showed the country’s economy grew more than expected in the first quarter.
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Canada’s gross domestic product (GDP) increased 0.5% in the year’s first quarter, the same rate of growth as in the previous fourth quarter of 2024. GDP in Q1 grew by 2.2% on an annualized basis. Analysts polled by Reuters (TRI) had expected first-quarter GDP to expand by 1.7% year-over-year.
Statistics Canada said that exports of goods were largely responsible for the Q1 growth, followed by accumulations of business non-farm inventories. Higher imports and weak residential home sales were a drag on Canada’s economic growth between January and the end of March.
Preparing for Tariffs
Canada’s total exports rose 1.6% in the first quarter of 2025 after increasing 1.7% in the fourth and final quarter of 2024. Exports got a big boost from looming U.S. tariffs, said Statistics Canada, with exports of motor vehicles rising nearly 17% and industrial machinery and equipment jumping 12% higher.
At the same time, imports increased 1.1% in the quarter, following a 0.6% rise in the previous quarter. Among Canadian households, spending slowed to 0.3% in the year’s first three months after rising 1.2% in the fourth quarter of 2024. The household savings rate slowed to 5.7%, the lowest rate of growth since the first quarter of 2024. Investment income received declined 1.7% in Q1.
Is BCE Stock a Buy?
The stock of BCE has a consensus Hold rating among nine Wall Street analysts. That rating is based on one Buy, five Hold, and three Sell recommendations issued in the last three months. The average BCE price target of $33.22 implies 10.88% upside from current levels.
