RE:Analyst ratings and TPs..."The average target on the Street is $91.31, according to Refinitiv data."
So if i understand this correctly, the average price target is nearly 4 % LESS than BNS's 52 week high ?
Is that "encouraging ? Is this something to be celebrated ???
Zack wrote:"Credit Suisse analyst Joo Ho Kim thinks the commentary on the macro conditions facing Canadian banks thus far in second-quarter earnings season “has been encouraging, and partly supported by the rather solid near-term credit conditions.” “Further signs of confidence from the banks should be positive for the sector, in our view,” he added.
Mr. Kim was one of several equity analysts on the Street to raise their target prices for shares of Bank of Nova Scotia following Wednesday’s better-than-anticipated quarterly release.
It reported core cash earnings per share of $2.18, topping both the analyst’s $1.99 forecast and the consensus estimate of $1.96. The beat was driven largely by lower-than-expected provisions for credit losses, while pre-tax pre-provision earnings growth was down 1 per cent quarter-over-quarter.
“While Scotiabank’s Q2 results largely beat [Credit Suisse’s estimate] via lower-than-expected total PCLs, we are impressed that its International Banking put up better than-expected-results, and its Canadian Banking segment also put up another quarter of strong performance,” said Mr. Kim. “We believe continued solid performance from International Banking in particular is important for the bank’s outlook, and look for further signs of gains ahead.”
Mr. Kim increased his full-year 2022 EPS estimate to $8.41 from $8.28 to reflect the beat. His 2023 forecast remains “largely unchanged” at $8.61, down from $8.63 previously.
Keeping a “neutral” rating, Mr. Kim bumped his target for Scotiabank shares to $91 from $88 just six days after initiating coverage of the sector. The average target on the Street is $91.31, according to Refinitiv data.
Other analysts making target adjustments include:
* RBC’s Darko Mihelic to $94 from $93 with an “outperform” rating, who called it his “favourite ‘risk on’ bank stock.”
“Q2/22 results were good as both International and Canada P&C had better than expected results,” said Mr. Mihelic. “Impairments and write-offs remained low and our only concern on credit is that BNS has the least amount of pandemic reserves left to reverse back into earnings/capital. The International P&C segment is key to our thesis, and we continue to see improving NIMs and loan growth, and solid underlying credit this quarter. We maintain our Outperform and view BNS as the most levered to an improving global economy.”
* Canaccord Genuity’s Scott Chan to $92 from $89 with a “buy” rating.
“We are encouraged by continued fundamentals improvement at International (i.e. commodities tailwind) despite a tough macro backdrop. Concurrent with results, BNS raised its dividend by 3 per cent (in line with Canaccord Genuity estimate) and providing a peer-high dividend yield of 5 per cent,” he said.
* Barclays’ John Aiken to $86 from $84 with an “equal weight” rating.
“There will likely be some concern in the market surrounding BNS’s relative capital position, however, we believe that it is unwarranted on an absolute basis. That said, given its new pro forma payout ratio, dividend increases moving forward may not be as robust, unless Scotia can generate better than expected earnings growth. We believe that as the success in international are recognized by investors, Scotia has the ability to generate relative multiple expansion moving forward,” he said.
* Stifel’s Mike Rizvanovic to $97 from $95 with a “buy” rating.
“BNS had a strong Q2 that was driven largely by abnormally low PCLs, but also showed continued momentum in both Canadian Banking, which was once again helped by market share gains in mortgage lending, and the International business, which featured a sizable margin uptick and solid expense control,” said Mr. Rizvanovic. “While we acknowledge rising macroeconomic risks that could continue to weigh on the sector, we still have a positive view on BNS’s outlook, and we note the bank’s relative valuation discount to peers, which in our view has further room to close through earnings season and beyond.”
* CIBC’s Paul Holden to $88 from $86 with a “neutral” rating.
“We remain cautious on the forward outlook given rapidly rising central bank rates and the anticipated impact on credit demand and credit losses,” he noted.
* TD Securities’ Mario Mendonca to $90 from $88 with a “hold” rating.
* National Bank Financial’s Gabriel Dechaine to $91 from $90 with a “sector perform” rating.
Conversely, Desjardins Securities analyst Doug Young cut his target to $94 from $96, citing “reflect higher macroeconomic concerns today.” He kept a “buy” recommendation.
“We like BNS’s valuation and the prospect of improved international banking results,” he added."