Morning Markets for Thursday, Feb. 19, 2026

Key Concepts

• Trade Deficit (Canada): Canada recorded a record annual trade deficit of $31.3 billion in 2025 (excluding pandemic years).
• Cenovus Energy: Posted strong Q4 results, driven by increased upstream and natural gas production.
• Nutrien: Beat profit estimates but reported revenue shortfalls in key fertilizer areas (potash, phosphate, nitrogen). Increased dividend and share buyback program.
• TSX Performance: Up 0.42%, continuing record-breaking momentum.
• US Markets: Generally down, with S&P 500, Dow Jones, and Nasdaq all experiencing declines.
• Canadian Tire: Revenue beat expectations, driven by strong holiday sales and performance at Mark's Work Warehouse and Sport Chek.
• Walmart: Cautious outlook despite beating revenue and profit expectations; benefiting from trade-down consumers.
• Doordash: Shares up despite missing earnings expectations, driven by strong Gross Order Volume (GOV).
• Fortuna Mining: Record free cash flow in Q4 and full year, focusing on brownfield projects and resource expansion.
• GM Investment (Oshawa): $63 million investment to upgrade the Oshawa plant for next-generation pickup truck production.

Canada's Economic Snapshot & Market Performance

Canada recorded its largest annual merchandise trade deficit on record for 2025, reaching $31.3 billion (excluding pandemic years). Statscan data revealed a decline in annual exports overall, although exports of gold, silver, and platinum surged nearly 42% due to rising metal prices. Conversely, exports to the US fell by 5.8%, with December’s goods exports to Canada hitting their lowest level since January 2022.

The Toronto Stock Exchange (TSX) continued its upward trajectory, rising 0.42% and reaching record territory, fueled by strong performance in the energy and materials sectors. However, US markets experienced a downturn, with the S&P 500 down 0.17%, the Dow Jones down 0.29%, and the Nasdaq nearly flat.

Corporate Earnings & Performance

Cenovus Energy reported a strong fourth quarter, with profits and revenue exceeding estimates. This was attributed to a 5% increase in upstream output and higher natural gas production, resulting in cash from operations reaching $2.4 billion.

Nutrien exceeded profit expectations in Q4 but fell short on revenue, particularly in potash, phosphate, and nitrogen. Despite this, the company raised its dividend, approved a new share buyback program, and anticipates solidifying a path for its phosphate business in the coming year.

Canadian Tire posted better-than-expected revenue, driven by robust holiday sales. The strongest performance was observed at Mark's Work Warehouse and Sport Chek, exceeding expectations more significantly than the core Canadian Tire stores. Losses and write-offs on the Canadian Tire Financial Services credit card were also broadly within acceptable levels. The company trades at 12 times earnings, making it an attractive valuation given the strong results. Better winter weather contributed to increased demand for seasonal items. However, Canadian Tire faces increasing competition from Walmart and Costco, which leverage their scale purchasing power.

US Retail Landscape: Walmart & Doordash

Walmart reported strong results, but issued a cautious outlook due to economic uncertainty. The company is benefiting from a "trade-down" effect, where consumers are seeking value and shifting spending to Walmart in a higher inflation environment. Walmart’s advertising business is also a significant profit driver. Despite trading at 45 times earnings, the company is seen as a safe haven for investors amidst volatility in the technology sector. Walmart is adapting by offering a wider range of products, including pre-owned luxury goods and musical instruments online, mirroring Amazon’s “everything store” model. They are also seeing market share growth among consumers with incomes under $100,000.

Doordash shares rose despite missing earnings and revenue expectations, driven by strong Gross Order Volume (GOV). The company is expanding its grocery delivery business, acquiring Deliveroo in Europe and Walt in the Nordics and Baltics. Doordash is building a full operating system for local commerce, encompassing delivery, warehousing, fulfillment, and advertising. Analysts at The Benchmark Company have a $285 price target on the stock, based on a DCF model and projected EBITDA growth of 30% through 2030.

Mining & Resource Sector: Fortuna & Others

Fortuna Mining reported record free cash flow of $132 million in Q4 and $330 million for the year. The company is focusing on low-risk brownfield projects, including the expansion of its San Jose mine in the Ivory Coast (aiming for 200,000oz production) and the development of the Séguéla mine in Senegal. Indicated gold resources increased by 75% to 1.25 million ounces. Fortuna maintains a strong balance sheet with over $700 million in liquidity and a net cash position of nearly $400 million. The company sees no significant geopolitical risks in its operating locations (Ivory Coast and Senegal).

Other mining companies reported mixed results:

• B2 Gold: Shares declined after adjusted profit missed estimates and gold sales fell short of expectations.
• Teck Resources: Revenue fell short of estimates, but profit beat expectations due to surging copper prices. Capex outlook was higher than expected.

Automotive Sector: GM Investment & Market Trends

General Motors (GM) is investing $63 million in its Oshawa, Ontario plant to prepare for the production of next-generation pickup trucks. This investment reaffirms GM’s commitment to Canada, despite recent layoffs of 500 employees. The investment is not related to the layoffs and will be managed within the existing two-shift operation. GM is focused on maximizing production capacity and adapting to changing consumer demand. The company is also closely monitoring the renegotiation of the Canada-United States-Mexico Agreement (CUSMA), which is considered critical for the North American automotive industry. GM is also exploring opportunities in EV manufacturing but has no immediate plans to resume EV production at the Oshawa plant.

Synthesis & Takeaways

The Canadian economy faces headwinds from a widening trade deficit and challenging export conditions. However, the TSX continues to demonstrate resilience, driven by strong performance in the energy and materials sectors. Corporate earnings reports reveal a mixed picture, with companies like Cenovus and Fortuna demonstrating strong financial performance, while others like Nutrien face revenue challenges. The US retail landscape is characterized by cautious optimism, with Walmart benefiting from consumer trade-down behavior. The mining sector is focused on expansion and resource development, while the automotive industry is investing in future technologies and adapting to changing market dynamics. Overall, the market remains sensitive to economic uncertainty and geopolitical risks, requiring a prudent and adaptable investment strategy.