This Hot TSX Stock Has Rallied 25% in the Past Month

Economic conditions are weighing down many stocks. Investors and consumers are concerned about the effect tariffs will have on growth in the near term, and whether a recession may be coming later this year.

But one stock on the Toronto Stock Exchange that has been showing signs of strength recently is Air Canada (TSX:AC).

In just the past month, shares of the top Canadian airliner have risen by around 25%. The last time it was at these levels was back in February, before the announcement of tariffs. And that would ultimately send the stock down to a low of $12.69.

Whether investors are ignoring the tariff risk or simply see the stock as too cheap of a buy is debatable, but Air Canada has been among the better TSX stocks to own of late.

The question, however, is whether there’s still room for it to go higher? For the past few years, the stock has struggled to go on a consistent rally, ultimately topping out at around $25 per share before falling back down.

Air Canada has posted an operating loss in each of its last two quarters and the full effects of tariffs haven’t been evident on its earnings numbers yet. When it reports earnings in August, investors will be able to see the impact of a slow down in travel to the U.S. and just how much tariffs are weighing on travelers.

I could still see Air Canada stock going higher but given that the headwinds are still there and the tariff risk isn’t gone, it may be approaching a peak, at least in the short term. I wouldn’t buy it today, only because I expect it’ll probably go down in the near future.