Before market open today, National Bank of Canada (TSE:NA) (OTC:NTIOF), one of the “Big Six” Canadian banks, released its Fiscal Q1-2023 earnings report. Both revenue and earnings per share (EPS) beat analysts’ expectations. As a result, the stock is now at an all-time high.
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National Bank’s revenue came in at C$2.71 billion compared to the consensus estimate of C$2.6 billion. This represents 7% year-over-year growth. Also, diluted earnings per share (EPS) were C$2.56, down just 3% from last year’s figure of C$2.64, while analysts were expecting C$2.39 per share.
The company has beaten EPS expectations in seven of its past nine quarters, making it a reliable performer. Although EPS hasn’t kept up with revenue growth (signaling declining profit margins year-over-year), National Bank is performing much better than The Bank of Nova Scotia (TSE:BNS), which experienced a 14% drop in earnings per share, sending its stock lower yesterday.
Additionally, NA’s return on equity (ROE) came in at 18.4%, which is a relatively high figure among Canadian banks. Nonetheless, it fell 350 basis points (bps) year-over-year, as it was 21.9% in Q1 2022.
Lastly, National Bank’s Common Equity Tier 1 (CET1) ratio decreased 10 bps quarter-over-quarter to 12.6%, but it’s still well above the minimum regulatory requirement. The CET1 ratio is a liquidity ratio calculated by dividing Common Equity Tier 1 (CET1) by risk-weighted assets.
Is National Bank a Good Stock to Buy, According to Analysts?
According to analysts, National Bank of Canada is a good investment, earning a Moderate Buy consensus rating based on four Buys and three Holds assigned in the past three months. The average NA stock price forecast of C$107.99 implies 5.1% upside potential.
