Feb. 23 at 3:03 PM
Scotia: We remain positive on the large Canadian banks heading into Q1 earnings season that we suspect will once again feature strong results in market-sensitive businesses, upside to all-bank margins that will help keep NII growing despite only modest loan volumes, & credit losses remaining in a very manageable range in the absence of any signs of meaningful deterioration in the economic outlook
With those dynamics, we see a strong possibility that results could in fact come in ahead of our current expectations/consensus & drive further upside revisions to EPS ests, which we believe will be key to share price upside potential for the group in the near-term.
Large banks traded at a market cap-weighted fwd P/E multiple of 12.7x on FY27 consensus EPS, which is well above the group’s historical average of 11.1x...we don’t foresee the likelihood of multiple expansion in the near-term, which means that any upside will need to be driven by upward revisions to EPS ests
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