Laurentian Bank (LB) AI Stock Analysis

• Market Cap: C$1.32B
• Dividend Yield: 6.17%
• Average Volume (3M): 198.16K
• Price to Earnings (P/E): 10.0
• Beta (1Y): 0.85
• Revenue Growth: -3.68%
• EPS Growth: -111.41%
• Country: CA
• Employees: 2,800
• Sector: Financial
• Sector Strength: 82
• Industry: Banks - Regional
• EPS (TTM): 0.73
• Shares Outstanding: 44,232,105
• 10 Day Avg. Volume: 273,016
• 30 Day Avg. Volume: 198,159
• PEG Ratio: -111.95
• Price to Book (P/B): 0.42
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.62
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$28.89
• Price Target Upside: -3.36% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 9

• Rating: 54 Neutral
• Price Target: ―

Laurentian Bank's overall score reflects a mix of strengths and challenges. Strong cash flow and strategic growth initiatives offer positives, but high leverage, profitability issues, and a challenging valuation weigh on the outlook. The earnings call added some positive sentiment through strategic partnerships and loan growth, but concerns persist with revenue and efficiency metrics.

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

Expenses

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

Q2 Results

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

Revenue and Investment

Lower year-over-year revenue combined with an investment agenda increased the NIX ratio to 75.2%.

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 primarily through interest income from loans and mortgages, as well as through fees and commissions on various financial products and services. The bank earns interest income by lending money to individuals and businesses at a higher rate than it pays on deposits. Additionally, it collects fees for services such as account maintenance, transaction processing, and advisory services. The bank's wealth management and investment divisions contribute to revenue through management fees and trading commissions. Laurentian Bank also benefits from strategic partnerships and collaborations that enhance its product offerings and expand its customer base, further contributing to its earnings.

Laurentian Bank Financial Statement Overview

Summary

Laurentian Bank shows strong gross profitability and cash flow generation but faces challenges with profitability and leverage. High leverage and recent net losses raise concerns despite commendable operational efficiency and cash management.

Income Statement

Laurentian Bank's income statement shows a mixed picture. The TTM gross profit margin is impressive at 95.77%, indicating strong cost management. However, the net profit margin is negative due to a recent net loss, signaling profitability challenges. Revenue growth is slightly negative over the past year, showing a contraction. The EBIT and EBITDA margins are modest, highlighting room for operational efficiency improvement.

Balance Sheet

The balance sheet shows moderate financial leverage, with a debt-to-equity ratio of 5.58, which is higher than ideal, indicating potential risk. The TTM return on equity is negative given the net loss, but the equity ratio of 5.88% shows a reasonable level of equity financing relative to assets. Overall, the balance sheet reflects a stable yet highly leveraged financial position.

Cash Flow

Cash flow analysis reveals a strong operating cash flow to net income ratio due to positive cash generation despite a net loss. The free cash flow is robust and has grown significantly in the TTM, indicating good cash management. However, the decline in operating cash flow compared to net income suggests some volatility in cash operations.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.40B	1.00B	1.03B	1.03B	1.00B	933.76M
	Gross Profit
1.34B	1.02B	1.03B	1.03B	1.00B	933.76M
	EBIT
153.88M	249.94M	234.51M	1.02B	72.59M	120.28M
	EBITDA
610.40M	249.94M	0.00	0.00	134.11M	185.93M
	Net Income Common Stockholders
-4.18M	-5.50M	181.09M	226.58M	57.07M	114.08M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.27B	1.68B	1.48B	2.25B	1.11B	1.14B
	Total Assets
48.78B	47.40B	49.89B	50.72B	45.08B	44.17B
	Total Debt
15.98B	15.59B	15.23B	15.04B	14.03B	13.18B
	Net Debt
13.96B	14.08B	13.82B	12.98B	13.18B	12.31B
	Total Liabilities
45.91B	44.57B	47.03B	47.94B	42.44B	41.56B
	Stockholders Equity
2.87B	2.83B	2.86B	2.78B	2.64B	2.61B
Cash Flow		Free Cash Flow
1.93B	161.76M	-616.62M	833.84M	93.88M	657.48M
	Operating Cash Flow
1.71B	198.78M	-577.92M	896.89M	134.68M	698.68M
	Investing Cash Flow
-1.20B	-61.45M	665.23M	-759.03M	-29.31M	-599.87M
	Financing Cash Flow
-741.69M	-114.48M	-1.01B	-140.71M	-102.08M	-1.86B

Laurentian Bank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

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 29.89 is above the 20-day moving average (MA) of 28.48, above the 50-day MA of 27.38, and above the 200-day MA of 26.97, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 72.25 is Negative, neither overbought nor oversold. The STOCH value of 60.05 is Neutral, 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
TD	79 Outperform	$166.80B	9.90	14.27%	4.24%	13.12%	61.99%
NA	78 Outperform	C$52.24B	12.59	13.42%	3.29%	17.13%	14.73%
CM	77 Outperform	$87.72B	11.76	13.19%	3.90%	5.38%	21.68%
BMO	72 Outperform	$106.95B	13.74	9.88%	4.16%	6.98%	32.63%
BNS	71 Outperform	$91.09B	14.79	8.00%	5.67%	3.72%	-17.99%
Sector *	64 Neutral	$12.77B	9.77	7.59%	16985.66%	12.30%	-7.71%
LB	54 Neutral	C$1.32B	9.97	5.38%	6.17%	-3.68%	-111.41%

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.