Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.

Royal Bank of Canada T.RY

Alternate Symbol(s):  RY | T.RY.P.H | RBCPF | T.RY.P.J | T.RY.P.M | T.RY.P.N | T.RY.P.O | T.RY.P.S | RYLBF

Royal Bank of Canada is a global financial institution. Its business includes Personal & Commercial Banking, Wealth Management, Investor Services, Capital Markets and Insurance. The Personal & Commercial Banking comprises its personal banking operations and certain retail investment businesses in Canada, the Caribbean and United States, as well as its commercial and corporate banking operations in Canada and the Caribbean. Wealth Management provides a full suite of investment, trust and other wealth management solutions and businesses. Capital Markets provides public and private companies, institutional investors, governments and central banks globally with a range of capital markets products and services across its two main business lines, Corporate and Investment Banking and Global Markets. Insurance offers a range of life, health, home, auto, travel, wealth and reinsurance advice and solutions, and creditor and business insurance services to individual, business and group clients.


TSX:RY - Post by User

Post by retiredcfon Dec 09, 2022 7:54am
274 Views
Post# 35161133

Credit Suisse

Credit Suisse

Credit Suisse analyst Joo Ho Kim was not impressed by the fourth-quarter results from Canadian banks, but he took a more positive view of their outlooks.

“We entered the Canadian banks’ Q4 earning season with a sense of optimism that the banks will finish off a strong year with a solid quarter,” he said. “The actual results underwhelmed our more positive stance, with both the headline and underlying (PTPP) earnings missing our forecast on average (with divergence in results as expected). The good news is that the banks’ guidance for the year ahead was generally constructive in our view, and credit conditions did not show signs of significant deterioration. Looking ahead, we acknowledge that the uncertainties in the macro picture remain the key overhang on the sector’s valuation. Given such, we continue to believe that investors will pay for quality (and ‘defensive’) to a greater degree (as evidenced by the valuation dispersion among the group), in what could potentially be a year of ‘normalization’.”

“”On a sector-wide basis, we saw the banks continue to benefit from NIM expansion (albeit at a more moderate pace), and loan growth was much more robust than expected. Capital Markets revenue was also modestly better than what we expected. That was offset by a miss on expenses and PCLs (although we don’t see any signs of credit concerns yet). Putting them all together, PTPP earnings growth of 8 per cent year-over-year was solid but below both us and consensus.”

In a research report released Friday, Mr. Kim lowered his recommendation for shares of Canadian Imperial Bank of Commerce  to “neutral” from “outperform” in response to recent price depreciation.

“While the share price has declined meaningfully (down 10 per cent) since the bank’s weak Q4 results, we do not see a near-term catalyst that could help boost it on a relative basis,” he said. “Partly reflecting CM’s weaker guidance, we now believe the bank could continue to underperform on NIMs relative to peers, an area which should remain a near-term focus for the sector in our view. We also highlight CM’s overweight exposure to the domestic housing market as another factor that could suppress the shares’ relative upside, given the weak growth dynamic and the negative sentiment from a credit perspective (despite our belief to the contrary on a more fundamental basis).”

His target for CIBC shares slid to $63 from $66. The average on the Street is $66.09.

 

He maintained his recommendations and target prices for the rest of Big 6 banks. They are:

  • Bank of Montreal  with an “outperform” rating and $152 target. Average: $145.81.
  • Bank of Nova Scotia  with a “neutral” rating and $73 target. Average: $79.08.
  • National Bank of Canada  with an “outperform” rating and $109 target. Average: $102.71.
  • Royal Bank of Canada  with an “outperform” rating and $153 target. Average: $140.34.
  • Toronto-Dominion Bank  with a “neutral” rating and $98 target. Average: $101.63.

“Our pecking order for the Outperform-rated stocks is BMO, NA, and RY, with our target prices for these banks implying a very strong total return of 23 per cent,” he said.

<< Previous
Bullboard Posts
Next >>