Bank Of Nova Scotia (BNS) AI Stock Analysis

• Market Cap: $97.86B
• Dividend Yield: 6.93%
• Average Volume (3M): 3.77M
• Price to Earnings (P/E): 15.9
• Beta (1Y): 0.93
• Revenue Growth: 0.44%
• EPS Growth: -18.29%
• Country: CA
• Employees: 88,722
• Sector: Financial
• Sector Strength: 71
• Industry: Banks - Diversified
• EPS (TTM): 1.52
• Shares Outstanding: 1,245,573,000
• 10 Day Avg. Volume: 2,841,314
• 30 Day Avg. Volume: 3,766,656
• PEG Ratio: 6.62
• Price to Book (P/B): 1.07
• Price to Sales (P/S): 1.16
• P/FCF Ratio: 5.80
• Enterprise Value/Market Cap: 3.20
• Enterprise Value/Revenue: 4.17
• Enterprise Value/Gross Profit: 26.06
• Enterprise Value/Ebitda: 30.71
• 1Y Price Target: $81.10
• Price Target Upside: 3.05% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 71 Outperform
• Price Target: ―

The Bank of Nova Scotia's stock is supported by strong financial performance, reasonable valuation, and strategic initiatives highlighted in the recent earnings call. Despite technical indicators suggesting caution with some bearish momentum, the bank's robust dividend yield and solid financial foundation offer resilience against market fluctuations. Key risks include high leverage and credit loss provisions, but the bank's strategic focus on growth and risk management provides an optimistic outlook.

Positive Factors

Capital Return

BNS joins the capital return party, raising its dividend by 4% and implementing a 20M share repurchase program.

International Operations

The LATAM segment is relatively focused, with the majority of its international loan book in Mexico, Peru, and Chile, which are experiencing economic growth, declining central bank rates, and increasingly pro-business government policies.

Restructuring

Management’s current restructuring is setting International up for multiple years of self-funded high single-digit to low double-digit earnings growth.

Negative Factors

Domestic NII

Domestic NII was somewhat weaker in the quarter as Scotia’s demand-heavy deposit profile weighed on margins.

Earnings Miss

BNS delivered a slight EPS miss as strong wealth and capital markets results were offset by higher performing PCLs and soft Canadian NIM.

Valuation Gap

Despite respectable 13% year-over-year PTPP growth year-to-date, BNS has been a notable laggard to the group with the valuation gap against the peers widening.

Bank Of Nova Scotia Business Overview & Revenue Model

Company Description

The Bank of Nova Scotia provides various banking products and services in Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, and internationally. It operates in four segments: Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets. The company offers financial advice and solutions, and day-to-day banking products, including debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and insurance to individuals; and business banking solutions comprising lending, deposit, cash management, and trade finance solutions to small, medium, and large businesses, including automotive financing solutions to dealers and their customers. It also provides wealth management advice and solutions, including online brokerage, mobile investment, full-service brokerage, trust, private banking, and private investment counsel services; and retail mutual funds, exchange traded funds, liquid alternative funds, and institutional funds. In addition, the company offers international banking services for retail, corporate, and commercial customers; and lending and transaction, investment banking advisory, and capital markets access services to corporate customers. Further, it provides online, mobile, and telephone banking services. The company operates a network of 954 branches and approximately 3,766 automated banking machines in Canada; and approximately 1,300 branches and a network of contact and support center internationally. The Bank of Nova Scotia was founded in 1832 and is headquartered in Halifax, Canada.

How the Company Makes Money

Scotiabank generates revenue through various streams, primarily from its core banking services. Personal and commercial banking forms a significant portion of its earnings, which includes interest income from loans and mortgages, and fees from accounts and transactions. The wealth management division contributes through advisory services, management fees, and investment products. Corporate and investment banking provides income through underwriting, advisory fees, and trading activities. Additionally, the bank earns from its international operations, which diversify its revenue sources and mitigate country-specific risks. Strategic partnerships and acquisitions also play a critical role in expanding its market reach and enhancing profitability.

Bank Of Nova Scotia Financial Statement Overview

Summary

The Bank of Nova Scotia maintains a robust financial position with strong revenue growth and stable cash flows. While profitability margins appear pressured, the bank's solid equity base and cash flow suggest resilience. However, high leverage remains a strategic focus area to mitigate potential financial risks in fluctuating market conditions.

Income Statement

The Bank of Nova Scotia has shown stable revenue growth over the years, with a notable increase in total revenue for the TTM compared to previous years. However, the net profit margin has been fluctuating, and the EBIT margin for the TTM is lower compared to historical figures, indicating some operational challenges. Overall, the income statement reflects steady revenue growth but with potential profitability pressures.

Balance Sheet

The company's balance sheet is characterized by strong equity, with a relatively stable debt-to-equity ratio. The equity ratio is moderate, reflecting a solid foundation amidst high total assets. However, the total debt remains high, which could pose risks if economic conditions change unfavorably. The bank's strong equity position provides a cushion, but leveraging remains an area to watch.

Cash Flow

The Bank of Nova Scotia demonstrates a strong cash flow position, with a healthy free cash flow to net income ratio and consistent operating cash flow. The free cash flow has grown, indicating efficient capital management. The discrepancy between operating cash flow and net income ratio suggests solid cash generation capabilities, which is a positive indicator of liquidity and financial health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	75.17B	76.02B	31.79B	31.15B	30.91B	31.29B
Gross Profit	12.02B	29.56B	31.79B	31.15B	30.91B	31.29B
EBITDA	10.20B	10.56B	0.00	14.20B	14.00B	9.70B
Net Income	6.64B	7.76B	7.41B	9.92B	9.62B	6.78B
Balance Sheet
Total Assets	1.42T	1.41T	1.41T	1.35T	1.18T	1.14T
Cash, Cash Equivalents and Short-Term Investments	189.43B	108.17B	140.83B	119.31B	120.05B	116.50B
Total Debt	480.12B	300.67B	313.81B	310.86B	245.66B	7.41B
Total Liabilities	1.33T	1.33T	1.33T	1.27T	1.11T	1.07T
Stockholders Equity	84.92B	82.37B	76.93B	73.22B	70.80B	68.13B
Cash Flow
Free Cash Flow	21.14B	15.16B	31.28B	16.37B	-13.27B	55.89B
Operating Cash Flow	21.52B	15.65B	11.47B	16.94B	-12.81B	56.66B
Investing Cash Flow	-14.93B	-7.45B	-30.04B	-11.29B	14.70B	-56.46B
Financing Cash Flow	-5.46B	-8.84B	16.71B	-4.58B	-2.78B	28.13B

Bank Of Nova Scotia Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 78.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:BNS, the sentiment is Positive. The current price of 78.7 is above the 20-day moving average (MA) of 77.58, above the 50-day MA of 75.70, and above the 200-day MA of 71.81, indicating a bullish trend. The MACD of 0.87 indicates Negative momentum. The RSI at 76.27 is Negative, neither overbought nor oversold. The STOCH value of 88.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:BNS.

Bank Of Nova Scotia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BMO	77 Outperform	$81.65B	14.63	9.88%	4.01%	15.63%	66.95%
BNS	71 Outperform	$97.86B	15.86	8.00%	6.93%	0.44%	-18.29%
Sector *	68 Neutral	$17.49B	11.70	10.34%	3.85%	9.75%	0.63%
CM	―	$68.25B	12.78	13.19%	3.75%	―	―
RY	―	$192.11B	15.11	14.17%	3.11%	―	―
TD	―	$128.36B	10.71	14.27%	4.02%	―	―
NTIOF	―	$42.65B	14.29	13.42%	3.03%	―	―

Bank Of Nova Scotia Corporate Events

Scotiabank Projects $62 Million Earnings Contribution from KeyCorp

Scotiabank announced an expected net income contribution of CAD $62 million from its ownership interest in KeyCorp for Q2 2025, reflecting its share of KeyCorp’s Q1 2025 net income. After adjusting for amortization of acquired intangible assets, the adjusted net income contribution is projected to be CAD $71 million. This announcement highlights Scotiabank’s strategic investments and their impact on its financial performance, indicating a positive contribution to its earnings from KeyCorp.

Spark’s Take on TSE:BNS Stock

According to Spark, TipRanks’ AI Analyst, TSE:BNS is a Neutral.

The Bank of Nova Scotia shows a stable financial position with strong revenue growth and cash flow, providing resilience despite profitability pressures. The stock’s reasonable valuation and high dividend yield add attractiveness, while technical indicators suggest caution with bearish momentum. Strategic advancements are notable, but elevated credit loss provisions and macroeconomic uncertainties remain risks.

To see Spark’s full report on TSE:BNS stock, click here.

Scotiabank Reports Q1 Earnings Amid Strategic Portfolio Adjustments

Scotiabank reported a significant drop in its first-quarter net income to $993 million, primarily due to a $1,355 million impairment loss from the sale of its banking operations in Colombia, Costa Rica, and Panama. Despite this, the bank’s adjusted net income rose to $2,362 million, with strong performances in Global Wealth Management and Global Banking and Markets. The bank continues to focus on its North American markets and simplifying its international portfolio, as evidenced by recent strategic moves.

Scotiabank Declares Dividend and Updates Share Purchase Plan

Scotiabank has announced a dividend of $1.06 per share on its outstanding common shares, payable on April 28, 2025, to shareholders recorded by April 1, 2025. The bank has decided to continue purchasing common shares on the open market rather than issuing new shares from its treasury, with all associated costs covered by the bank. This decision reflects Scotiabank’s strategic approach to managing shareholder value and market operations.