BMO Capital analyst Sohrab Movahedi maintained a Hold rating on Laurentian Bank on December 5 and set a price target of C$40.50.
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Sohrab Movahedi has given his Hold rating due to a combination of factors impacting Laurentian Bank’s financial performance. The bank’s operating earnings per share fell short of expectations, primarily due to higher provisions for credit losses and a narrower net interest margin than anticipated. Although there was a slight improvement in loan growth and a lower tax rate, these positives were not enough to offset the overall earnings miss.
Moreover, the bank’s return on equity was slightly below forecasts, and while there was a modest increase in capital ratios, the bank faces challenges in achieving double-digit ROE due to elevated expenses linked to its strategic initiatives. The announcement of the bank’s acquisition at a price reflecting the current valuation also supports the Hold rating, as it suggests limited upside potential in the near term. Overall, the combination of these factors led to the maintenance of a Market Perform rating with a target price aligned with the acquisition offer.
In another report released on December 5, RBC Capital also upgraded the stock to a Hold with a C$40.00 price target.
LRCDF’s price has also changed moderately for the past six months – from C$29.890 to C$39.860, which is a 33.36% increase.