12:37 PM EST, 12/18/2024 (MT Newswires) -- National Bank notes that the Big-6 Canadian banks have outperformed the market by ~150 bps this year.
"However, if we exclude TD from the mix, the group has actually outperformed by around 800 bps, with a surge in second half performance (i.e., +800 bps versus the market)," said analyst Gabriel Dechaine. The stocks were buoyed by several factors, including rate cuts, de-intensification of regulatory capital requirements and the outcome of the U.S. election. These factors (especially the first two) were necessary to reduce concerns/overhangs weighing on the sector, Dechaine adds.
"As we look ahead to 2025, we believe they will be important for reviving earnings growth expectations, including: 1) strong commercial loan growth, most likely from the U.S. in the latter part of the year; 2) a "feast" year from the Capital Markets business, following two relatively lean years; and 3) potential positive EPS revisions, likely via the credit line."
Dechaine is not making any changes to ratings and is reiterating Outperform for BMO, CIBC and RBC.