Desjardins Desjardins Securities analyst Doug Young expects investor sentiment toward Canada’s banks to remain “subdued” in the near term.
In a research report released Tuesday previewing second-quarter earnings season for the sector, which begins with Bank of Nova Scotia and Bank of Montreal on May 24, Mr. Young predicted the crisis south of the border is likely to continue to weigh on sentiment. Canadian bank stocks are down an average almost 6 per cent for the quarter, underperforming the broader TSX.
Mr. Young reaffirmed Toronto-Dominion Bank as his top pick in the sector, maintaining a “buy” rating and $104 target. The average on the Street is $95.61, according to Refinitiv data.
He trimmed his targets for the other seven banks in his coverage universe. His changes, in order of preference, are:
- Bank of Montreal (“buy”) to $141 from $146. Average: $139.84.
- Royal Bank of Canada ( “buy”) to $145 from $147. Average: $140.45.
- Canadian Western Bank ( “buy”) to $32 from $33. Average: $30.86.
- National Bank of Canada (“hold”) to $103 from $104. Average: $106.50.
- Bank of Nova Scotia ( “hold”) to $73 from $76. Average: $72.09.
- Canadian Imperial Bank of Commerce ( “hold”) to $64 from $67. Average: $64.32.
- Laurentian Bank of Canada ( “hold”) to $35 from $37. Average: $40.08.