Sohrab Movahedi, an analyst from BMO Capital, maintained the Hold rating on Bank Of Nova Scotia. The associated price target is C$93.00.
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Sohrab Movahedi has given his Hold rating due to a combination of factors influencing the Bank of Nova Scotia’s performance. The bank’s recent earnings report showed a positive surprise in its Global Banking and Markets (GBM) segment, which helped offset higher-than-expected provisions for credit losses (PCLs) in its International Banking division. This balance of strengths and weaknesses contributed to the decision to maintain a Hold rating.
Additionally, while the bank demonstrated strong capital levels and a healthy CET1 ratio, the outlook for future earnings growth is mixed. The bank is expected to achieve double-digit earnings growth in Canadian Banking, but only modest growth in other segments. Furthermore, the bank’s strategy shift towards developed markets and its high dividend payout ratio, despite offering a peer-leading dividend yield, are factors that investors should consider. These elements together underpin the Hold rating, suggesting that while the bank has potential, there are risks that warrant caution.
In another report released today, Jefferies also maintained a Hold rating on the stock with a C$97.00 price target.