BMO Update BMO bank analyst Sohrab Movahedi previewed earnings for his sector and provided top picks,
“The Q3/24 earnings season kicks off Aug. 22 with TD. “Big 5″ (excl. BMO) cash earnings are expected to be up ~3% y/y (high single digits at CM and NA but declines at BNS), reflecting mid-single-digit pre-tax pre-provision earnings growth coupled with still elevated but stable credit provisions. Our estimates contemplate some firming in Capital Markets/Wealth revenue, moderating expense growth with benefits from last year’s restructuring charges and mid-single-digit loan growth (helped by the full-quarter benefit from the HSBC Canada acquisition at RY). We believe that the regulatory capital inflation is behind us (removing an ROE headwind), and that the Canadian banks are at an inflection point with an improved earnings visibility. At current valuations, we view pull backs in the stock prices of our Outperform-rated names (CM, RY, NA, and EQB) as a buying opportunity”