Buzz on the Bullboards: TSX rebounds with energy, aviation, and battery power plays

After a long Civic Holiday weekend, Canadian markets returned with strength. 

The S&P/TSX Composite Index rallied by 2 per cent on Tuesday and 1 per cent on Wednesday, marking one of its strongest single-day performances in recent weeks.

This rally followed a rough prior week, where trade tensions and weak commodity prices had weighed heavily on investor sentiment. The rebound was led by gains in mining and energy stocks, with companies like First Quantum Minerals (TSX:FM, Forum) and Barrick Gold (TSX:ABX, Forum) posting strong intraday performances. Despite a shortened trading week, the TSX demonstrated resilience and investor optimism, setting a positive tone for the month ahead.

This article is a journalistic opinion piece which has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.

1. Baytex Energy Corp. (TSX:BTE, Forum)

Sector: Energy | Market cap: Mid-cap

Baytex Energy delivered a solid performance in Q2 2025, aligning with its full-year operational and financial plan. The company reported:

• Adjusted funds flow of C$367 million or $0.48 per basic share
• Net income of C$152 million or $0.20 per basic share
• Free cash flow of C$3 million, with C$21 million returned to shareholders via dividends and buybacks
• Net debt reduction of C$96 million, bringing total net debt to C$2.3 billion

Operationally, Baytex averaged 148,095 boe/d, with 84% weighted toward oil and NGLs. What really stood out, the company achieved record well performance in the Pembina Duvernay, with its first pad delivering 1,865 boe/d per well, the highest peak oil rates recorded in the West Shale Basin.

In the Eagle Ford, Baytex completed two successful refracs, extending inventory life and improving capital efficiency. The company has identified 300 refrac opportunities, with plans to expand the program in 2026.

Looking ahead, Baytex expects to generate C$400 million in free cash flow for the year, with the majority weighted to the second half. The company plans to allocate all free cash flow to debt repayment after dividends, targeting net debt of C$2 billion by year-end.

Investor takeaway: Baytex is demonstrating disciplined capital allocation and operational efficiency, making it a compelling pick for energy-focused investors seeking value and growth.

2. Air Canada (TSX:AC, Forum)

Sector: Transportation | Market cap: Large-cap

Air Canada is facing turbulence on two fronts: labour unrest and disappointing Q2 earnings.

• Revenue: C$5.63 billion (up 2 per cent YoY)
• Net income: $0.60 per share (down from $0.98 in Q2 2024)
• Free cash flow: C$183 million
• Adjusted EBITDA: C$909 million

Despite strong performance from Aeroplan, Cargo, and Air Canada Vacations, the airline’s profitability fell short of expectations, leading to an 11 per cent drop in share price following the earnings release.

Compounding investor concerns, nearly 10,000 flight attendants voted overwhelmingly to authorize a strike amid stalled contract negotiations. The union cited issues such as unpaid work during boarding, low wages, and rest rules. A strike could begin as early as August 16, pending legal cooling-off periods and notice requirements.

Air Canada has responded with a C$500 million share buyback and full repayment of convertible notes, signaling a commitment to shareholder value. The airline reaffirmed its 2025 adjusted EBITDA guidance of C$3.2 to C$3.6 billion and maintains a long-term revenue target of C$30 billion by 2028.

Investor takeaway: While Air Canada remains focused on long-term growth, short-term risks from labour disputes and declining profitability may weigh on investor sentiment.

3. Nano One Materials (TSX:NANO, Forum)

Sector: Clean Tech / Materials | Market Cap: Small-cap

Nano One Materials has been selected to join the Arkansas Lithium Technology Accelerator (ALTA)—America’s first lithium and battery supply chain accelerator. This move could position Nano One as a key player in reshoring battery materials production and reducing foreign dependency.

Key highlights:

• US$12.9 million in funding from the U.S. Department of Defense
• Expansion of its Candiac facility in Québec, targeting defense and energy storage markets
• Support for AI data centres and EVs through licensing and joint ventures
• Anchored by its Innovation Centre in Burnaby, which drives process development and scale-up

Nano One’s proprietary One-Pot process eliminates intermediate steps and foreign-controlled inputs, offering a scalable, modular solution for lithium iron phosphate (LFP) cathode production. This makes the company a strategic asset in both commercial and defense supply chains.

Investor takeaway: Nano One’s inclusion in ALTA and its growing relevance to national security and clean energy markets make it a promising long-term investment in the battery materials space.

Final thoughts

These three TSX stocks—Baytex Energy, Air Canada, and Nano One Materials—are navigating vastly different landscapes, from oilfield innovation to labour unrest and battery tech acceleration. For investors, each presents unique opportunities and risks.

As always, deeper due diligence is essential. Investors should review each company’s financials, strategic outlook, and sector dynamics before making any decisions. Consider how macroeconomic factors, regulatory changes, and global trends may impact these businesses in the months ahead. Staying informed and agile will be key to capitalizing on these developments.

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