What Do Analysts Think About Canadian Bank Stocks?
Last week was a big one for Canadian banks with all analysts updating their price targets in response to the most recent quarterly earnings reports. Now that all the dust has settled, I wanted to provide you all with a summary of all analyst recommendations.
Royal Bank of Canada (RY)
With price targets ranging from $106 to $120 per share, the consensus rating out of these five analysts is $114.25. Compared to the most recent share price of $104.45, this still represents a 9.38% upside.
Toronto-Dominion Bank (TD)
Price targets on TD range from $76 to $83 per share, compared to Monday’s close of $72.88. The consensus, not including National Bank Financials’ November 22 rating, is $80. Still, despite an overall lowering of expectations on this stock, this still represents a 9.77% upside.
Bank of Montreal (BMO)
With just three ratings to choose from (excluding National Bank Financials’ November 22 rating), analysts are united on a price target range between $107 and $109 per share for a consensus of $107.67. Compared to Monday’s close price of $99.72, this represents a 7.97% upside.
CIBC (CM)
Six analysts peg CIBC’s stock price at a consensus of $114.50 per share ranging from a low of $108 to a high of $121. With the stock closing at $109.44 on Monday, this represents a 4.62% upside.
National Bank of Canada (NA)
Three analysts have provided recent price targets on National Bank of Canada’s stock ranging from $72.50 to $77 per share for a consensus of $74.38. Unique to Canadian banks, all of these analysts boosted their price targets and compared to Monday’s close of $71.98, this represents a 3.33% upside.
Laurentian Bank of Canada
Of course, with only two analysts making up a consensus price target of $39.50, this doesn’t exactly carry much weight. For what its worth, both analysts lowered their price targets on the bank and compared with Monday’s close price of $43.70, this represents a 10.63% upside.
Summary
While the overall tone was bearish for Canadian banks, I find it odd that the one company which had its price target universally boosted (National Bank of Canada) had the lowest upside (3.33%). In addition, after the year we have enjoyed with many equity portfolios returning above 20%, it worries me when I hear analysts implying that they have lowered their expectations of Canadian banks due to things such as an increase in loan-loss provisions, but don’t worry - they’re still estimating an extra 5-10% return in the next year. Those things don’t go hand in hand.
What do you think? Have Canadian bank stocks stalled or is there still some room for growth in the next year? Leave a comment below, and don’t forget to subscribe!