Stifel Adjusts - G&M The rating changes came alongside the analyst’s second-quarter preview for the Canadian banking sector, which he expects to be “more challenging.”
“Following an impressive run with EPS consistently beating expectations over the past several quarters, we expect the Canadian banks to see a more challenging environment in Q2, but to still report decent results,” he said. “And while we forecast EPS falling by an average of 13 per cent sequentially due to both the absence of sizable PCL recoveries and weaker Capital Markets, we expect year-over-year growth in pre-tax, pre-provision earnings to come in at a still-respectable 3 per cent. Beyond Q2, however, the group’s EPS trajectory has become far less certain given the implications of numerous additional rate hikes, which leads us to reduce our F2023 EPS estimates by 2 per cent, while our target prices fall by 10 per cent on a lower PE multiple to reflect rising macroeconomic risks. BMO remains our top pick among the Big Six banks heading into Q2, while we also favor BNS, NA, and CWB, which we have upgraded.”
Mr. Rizvanovic’s other target changes were:
- Bank of Montreal (
, “buy”) to $157 from $171. Average: $163.12. - Bank of Nova Scotia (
, “buy”) to $95 from $106. Average: $94.26. - Canadian Imperial Bank of Commerce (
, “hold”) to $152 from $172. Average: $169.69. - Laurentian Bank of Canada (
, “hold”) to $40 from $47. Average: $46.64. - National Bank of Canada (
, “buy”) to $104 from $117. Average: $105. - Royal Bank of Canada (
, “hold”) to $132 from $150. Average: $149.55. - Toronto Dominion Bank (
, “hold”) to $95 from $104. Average: $105.83.