Laurentian Bank (LB) AI Stock Analysis

• Market Cap: $1.40B
• Dividend Yield: 6%
• Average Volume (3M): 180.70K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.76
• Revenue Growth: -9.93%
• EPS Growth: N/A
• Country: CA
• Employees: 2,800
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.78
• Shares Outstanding: 44,311,436
• 10 Day Avg. Volume: 308,034
• 30 Day Avg. Volume: 180,702
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 14.08
• Enterprise Value/Revenue: 8.30
• Enterprise Value/Gross Profit: 21.35
• Enterprise Value/Ebitda: 86.79
• 1Y Price Target: $30.35
• Price Target Upside: -3.07% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 7

• Rating: 74 Outperform
• Price Target: C$35.00 ▲(11.79% Upside)

Laurentian Bank's strong financial performance and reasonable valuation are key strengths, supported by positive technical indicators. However, economic challenges reflected in the earnings call, such as revenue and income declines, slightly offset these strengths.

Positive Factors

CET1 Ratio

The CET1 ratio of 11.0% improved and is expected to be used for organic growth with a rebound in commercial lending activity.

Net Interest Income

Net interest income of $182.2 million was above expectations due to higher net interest margin.

Negative Factors

Earnings

Q2 results were below expectations due to lower revenues and negative operating leverage.

Expenses

Expenses are likely to remain elevated due to investment needs for the simplification drive, impacting ROE and BVPS growth.

Laurentian Bank Business Overview & Revenue Model

Company Description

Laurentian Bank of Canada, together with its subsidiaries, provides various financial services to personal, business, and institutional customers in Canada and the United States. It operates through three segments: Personal Banking, Commercial Banking, and Capital Markets. The company offers notice, demand, and term deposits; commercial, residential mortgage, and personal loans; real estate, and equipment and inventory financing; and credit life and disability insurance products. It also provides investment securities services; research, market analysis, and advisory services; corporate underwriting services for debt and equity; and administrative, foreign exchange, and trustee services. The company sells its products through the bank's financial clinics, advisors, broker channels, and digital platforms. Laurentian Bank of Canada was founded in 1846 and is headquartered in Montréal, Canada.

How the Company Makes Money

Laurentian Bank generates revenue through several key streams. Primarily, the bank earns income from interest on loans provided to customers, including personal and commercial loans, mortgages, and lines of credit. Additionally, it receives fees from various banking services, such as account maintenance, transaction fees, and advisory services in wealth management. The bank also generates income through investment activities and trading in capital markets. Significant partnerships with other financial institutions and investment firms enhance its service offerings and revenue potential. Furthermore, the bank's focus on digital banking solutions has allowed it to reduce operational costs and increase efficiency, contributing positively to its earnings.

Laurentian Bank Financial Statement Overview

Summary

Laurentian Bank shows strong revenue growth and cash flow generation, indicating financial health. However, high leverage and moderate profitability margins suggest potential risks. The company is on a solid growth trajectory but should focus on improving cost efficiency and reducing leverage.

Income Statement

Laurentian Bank's income statement shows a strong revenue growth rate of 16.17% in the TTM, indicating robust top-line expansion. The gross profit margin of 38.88% is healthy, though the net profit margin of 6.29% suggests room for improvement in cost management. The EBIT and EBITDA margins are moderate at 7.67% and 9.57%, respectively, reflecting stable operational efficiency.

Balance Sheet

The balance sheet indicates a high debt-to-equity ratio of 6.84, which suggests significant leverage and potential risk in a rising interest rate environment. However, the return on equity of 5.23% shows that the company is generating modest returns on shareholder investments. The equity ratio of 5.72% highlights a relatively low equity base compared to total assets.

Cash Flow

The cash flow statement reveals impressive free cash flow growth of 450.70% in the TTM, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio of 0.23 indicates efficient conversion of earnings into cash. The free cash flow to net income ratio of 0.94 suggests that most of the net income is being converted into free cash flow, enhancing financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.37B	2.58B	1.03B	1.03B	1.00B	933.76M
Gross Profit	921.46M	942.70M	1.03B	1.03B	1.00B	933.76M
EBITDA	226.71M	249.94M	0.00	0.00	134.11M	185.93M
Net Income	149.05M	-5.50M	181.09M	226.58M	57.07M	114.08M
Balance Sheet
Total Assets	49.93B	47.40B	49.89B	50.72B	45.08B	44.17B
Cash, Cash Equivalents and Short-Term Investments	1.59B	1.68B	1.48B	2.25B	1.11B	1.14B
Total Debt	19.53B	17.72B	15.23B	15.04B	14.03B	13.18B
Total Liabilities	47.08B	44.57B	47.03B	47.94B	42.44B	41.56B
Stockholders Equity	2.86B	2.83B	2.86B	2.78B	2.64B	2.61B
Cash Flow
Free Cash Flow	654.63M	161.76M	-616.62M	833.84M	93.88M	657.48M
Operating Cash Flow	693.88M	198.78M	-577.92M	896.89M	134.68M	698.68M
Investing Cash Flow	-544.44M	-61.45M	665.23M	-759.03M	-29.31M	-599.87M
Financing Cash Flow	-275.00M	-114.48M	-1.01B	-140.71M	-102.08M	-1.86B

Laurentian Bank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 31.31
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LB, the sentiment is Positive. The current price of 31.31 is above the 20-day moving average (MA) of 30.95, above the 50-day MA of 30.90, and above the 200-day MA of 28.25, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 59.74 is Neutral, neither overbought nor oversold. The STOCH value of 84.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:LB.

Laurentian Bank Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BMO	77 Outperform	$91.20B	15.37	10.20%	3.56%	15.63%	66.95%
LB	74 Outperform	$1.40B	10.35	5.47%	6.00%	-9.93%	―
Sector *	68 Neutral	$17.80B	11.94	9.89%	3.74%	9.69%	1.17%
BNS	―	$78.92B	16.45	8.64%	4.80%	―	―
CM	―	$73.38B	13.14	13.40%	3.51%	―	―
TD	―	$130.63B	8.94	17.36%	3.97%	―	―
NTIOF	―	$41.45B	14.24	13.25%	3.11%	―	―

Laurentian Bank Corporate Events

Laurentian Bank Elects Directors at Annual Meeting

Laurentian Bank of Canada announced the election of its directors during the Annual and Special Meeting of Shareholders, with all nominated candidates successfully elected. The shareholder proposals by MEDAC were not adopted as they did not receive the majority of votes. This election reinforces the bank’s governance structure and may influence its strategic direction, impacting stakeholders and potentially enhancing its market position.

Spark’s Take on TSE:LB Stock

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

Laurentian Bank’s overall score reflects a stable but challenging financial outlook. The bank showcases strong cash management and loan growth, but faces profitability and leverage issues. Technical indicators suggest a lack of momentum, and the high dividend yield offers some investor appeal despite a negative P/E ratio. Mixed earnings call sentiment highlights both strategic achievements and ongoing challenges.

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

Laurentian Bank Releases Proxy Circular and ESG Report

Laurentian Bank has released its management proxy circular, detailing the agenda for its annual meeting of common shareholders, which includes voting on the Board of Directors, auditor appointments, and executive compensation. Additionally, the bank has published its 2024 ESG report, highlighting progress in reducing greenhouse gas emissions, underscoring its commitment to sustainability and potentially enhancing its industry positioning.

Laurentian Bank Reports Q1 2025 Financial Results

Laurentian Bank of Canada reported a slight increase in net income for the first quarter of 2025, with a net income of $38.6 million compared to $37.3 million in the same period last year. Despite a decrease in adjusted net income and earnings per share compared to the previous year, the bank’s strategic focus on specialized commercial groups and maintaining strong liquidity and capital levels positions it well to navigate current economic uncertainties.

Laurentian Bank Declares Quarterly Dividend and Offers Reinvestment Plan

Laurentian Bank of Canada has announced a regular quarterly dividend of 47 cents per share on its common shares, payable on May 1, 2025. The dividends are eligible for reinvestment under the Bank’s Shareholder Dividend Reinvestment and Share Purchase Plan, allowing shareholders to reinvest dividends in new shares at a 2% discount without brokerage fees. This move underscores Laurentian Bank’s commitment to providing value to its shareholders and enhancing shareholder engagement through flexible investment options.