Laurentian Bank Hold Rating: Balancing Financial Challenges and Strategic Shifts

Sohrab Movahedi, an analyst from BMO Capital, reiterated the Hold rating on Laurentian Bank (LRCDF – Research Report). The associated price target remains the same with C$30.00.

Sohrab Movahedi has given his Hold rating due to a combination of factors affecting Laurentian Bank’s financial performance. The bank’s Q2 results fell short of expectations, with operating EPS slightly below forecasts and non-interest income not meeting targets. Although net interest income was slightly above expectations, the overall revenue decline and increased investment expenses have negatively impacted the bank’s operating leverage.
Furthermore, the bank’s loan balances have decreased, particularly in personal and residential loans, though commercial loans showed a modest increase. The bank’s capital position remains healthy with a CET1 ratio of 11.0%, but the focus on investment and simplification efforts is expected to keep expenses high. These factors, along with the bank’s revised medium-term strategy and leadership changes, contribute to the Hold rating as the bank works towards achieving its double-digit ROE target.

According to TipRanks, Movahedi is a 4-star analyst with an average return of 9.4% and a 62.50% success rate. Movahedi covers the Financial sector, focusing on stocks such as Brookfield Corporation, Royal Bank Of Canada, and Laurentian Bank.

In another report released on May 30, Jefferies also maintained a Hold rating on the stock with a C$29.00 price target.