3 Undervalued Canadian Stocks to Buy Before the Next Earnings Wave

Alright, you got me. Earnings season just passed. That said, the next earnings season can sneak up before you’re even past the last one. That’s why it’s important to start looking at those past earnings reports now to see where we’re headed next. It’s a great time to find undervalued stocks that look messy, but then quickly turn to obvious picks.

Pre-earnings buys can therefore have solid low expectations, with clear catalysts, and numbers that can surprise investors. That’s why today we’re looking at three that belong on your watchlist on the TSX today.

MG

Magna International (TSX:MG) is one of Canada’s biggest global auto suppliers, focusing on body structures, power and vision systems, seating, complete vehicle assembly, and advanced driver-assistance technology. And Magna stock fits this undervalued theme beautifully.

Auto suppliers faced a rough backdrop from tariffs, lower vehicle production, and uncertain electric vehicle (EV) demand. Despite that noise, Magna beat expectations in Q1 2026, with sales up 3% to US$10.4 billion and adjusted EPS of US$1.38, ahead of the US$1.01 analysts expected. While it lowered full-year sales guidance to US$41.5 billion to US$43.1 billion due to tariffs, this creates a way to get in on a discount as the company beats expectations. 

After all, the quarter was strong. Its 2025 numbers showed operating progress, and Magna stock generated US$1.9 billion in free cash flow (FCF) in 2025, up from US$1.1 billion in 2024. Furthermore, diluted earnings per share (EPS) rose to US$5.73 from US$5.41, even though reported sales slipped to US$42 billion from US$42.8 billion. That slip makes it look more valuable now trading at just 26.4 times earnings with a 3.2% dividend yield.

NTR

Next up we have Nutrien (TSX:NTR), the world’s largest potash producer and a major player in nitrogen, phosphate, and crop retail. Fertilizer markets have become more interesting again as global supply issues, strong planting demand, and higher nitrogen and phosphate prices lifted results. So the next earnings round could provide just as strong of earnings as the past.

During the first quarter of 2026, net income jumped to US$139 million from just US$19 million a year earlier. Potash sales rose 24% to US$926 million, nitrogen sales rose 15% to US$1 billion, and phosphate sales rose 35% to US$485 million. If fertilizer prices stay firm, earnings estimates may have even more room to move.

Yet despite these solid numbers, the market gave a muted response. It now trades at just 14.6 times earnings, with a 3% dividend yield. So not dirt cheap, but certainly more reasonable if fertilizer prices remain strong and Nutrien stock keeps pumping out cash. And when it comes to Nutrien stock, underestimating it has never gone well for investors.

TECK

Finally we have Teck Resources (TSX:TECK.B), one of Canada’s most important base-metals companies, with a copper, zinc, and steelmaking coal history. These days, however, the company leans heavily into the field of copper. That makes sense, as copper demand ties into electrification, power grids, data centres, vehicles, and industrial growth. In fact, Teck stock and Anglo American worked toward a merger that would create one of the world’s largest copper producers, though regulatory approvals remain key.

Earnings support even more growth and income for investors. Teck stock’s first quarter of 2026 brought in profit of $858 million, or $1.75 per share, compared with $303 million, or $0.60 per share, a year earlier. Cash flow from operations (FFO) hit $1 billion, making investors look at Teck stock differently during this earnings season.

As copper prices improve and production ramps up, Teck stock could be a solid bet. It recently reaffirmed its 2026 copper production guidance of 455,000 to 530,000 tonnes, in fact. Yet today, it trades at a reasonable 23.4 times earnings, and remains slightly below 52-week highs. So if copper stays strong, Teck stock’s earnings power could look much higher than investors assumed a year ago.

Bottom line

The next earnings wave could separate real bargains from cheap-looking traps. And together, these three offer the earnings momentum and long-term appeal that could also provide the next earnings report with a growth catalyst.

The post 3 Undervalued Canadian Stocks to Buy Before the Next Earnings Wave appeared first on The Motley Fool Canada.

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More reading

• This TSX Shift Could Create a Huge Buying Opportunity
• TSX Today: What to Watch for in Stocks on Friday, May 8
• 1 Magnificent Canadian Dividend Stock Down 13.9% to Buy and Hold for Decades
• One Canadian Dividend Stock That’s Down 10% — and Worth Holding for the Very Long Term
• 5 Dividend Stocks Worth a Spot in Nearly Any Canadian Portfolio

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Magna International and Nutrien. The Motley Fool has a disclosure policy.