RBC Target of $74Quarterly preview Here are the 4 things that we believe investors will focus on for Equitable’s Q4/17 results: EPS: We forecast normalized EPS of $2.59 (was $2.55), above consensus of $2.35. Originations: We forecast originations of $2.15B (was $1.80B), down -1% Y/Y. Our increased origination forecast primarily reflects higher securitization activity. Loan-loss provisions: We forecast loan-loss provisions of $1.0MM (unchanged), which is higher Q/Q from $0.0MM in Q3/17 and Y/Y from $0.9MM in Q4/16. Our loan-loss forecast reflects our expectations for modest growth in credit losses from the current, relatively low levels. Impact from B-20 Guidelines: We expect investors will look to management for any early indicators of the impacts of OSFI’s recently implemented B-20 Guidelines. Valuation Our 12-month price target is $74/share (was $68). Our 12-month target is based on a 1.0x multiple (was 0.95x) applied to our Q4/18 BVPS forecast. The increase to our target multiple reflects higher ROE forecasts. Our target multiple is in-line with the average of its peer group reflecting higher forecast EPS growth and ROE, offset by lower share liquidity. The impact of rolling forward our financial forecast and increasing our target multiple increases our 12- month price target to $74/share. Our price target supports our Sector Perform rating. Why we are Sector Perform: (1) in the short-term, we are concerned about the potential impact of OSFI’s recently implemented mortgage stress test and the Canadian and provincial government changes announced in the last two years; and (2) we expect earnings growth to slow for our mortgage universe, which is likely to limit share price upside. However, we think EQB offers higher EPS growth potential within our mortgage coverage.