BMO BMO analyst Sohrab Movahedi previewed bank earnings and provided top picks,
“The Q2/24 earnings season kicks off May 23 with TD. Across the “Big 5″ (excl. BMO), cash earnings are expected to be down ~4% y/y, with positive pre-tax pre-provision earnings growth more than offset by still elevated credit provisions (albeit stable q/q). Our estimates contemplate slow loan growth but stable margins, some firming in Capital Markets/Wealth revenue, and sticky expenses not yet showing full benefits from last year’s restructuring charges. We believe that the Canadian bank earnings trends are close to an inflection point; last year’s triple whammy of higher minimum regulatory capital requirements, credit reserve building, and negative operating leverage from double-digit non-interest expense growth should moderate starting this quarter and improve through FY25. Our Outperform-rated names are CM, RY, NA, EQB, and CWB”