National Bank, CIBC, and Royal Bank Stock Analysis: Analyst Recommendations and Earnings Report

2023-12-04 17:47:00

National Bank achieved earnings per share of $2.44, while analysts expected $2.26. (Photo: 123RF)

What to do with National Bank, CIBC and Royal Bank securities? Here are some analyst recommendations likely to move prices soon. Note: the author may have an opinion completely different from that expressed.

National Bank (NA, $94.28): results that cause the stock to jump 5%

National Bank’s 4th quarter results certainly included elements that pleased investors, as the stock jumped 5% on Friday. After a solid opening, the stock continued to progress to validate these results during the rest of the session.

For this quarter, which was certainly not easy for all Canadian chartered banks, the National Bank achieved cash earnings per share of $2.44, which exceeded Doug’s forecast of $2.33. Young, analyst at Securities Securities Desjardins, as well as that of the analysts’ consensus which was counting on $2.26.

Adjusted earnings before tax and loss provisions, capital markets operations, and U.S. and international operations all exceeded expectations, while Canadian personal and corporate banking and the financial services sector wealth management missed the targets, notes the analyst.

Among the positive elements, he noted that there were no unpleasant surprises in terms of credit quality, and that the Capital Markets division, an important factor in the bank’s operations, rebounded well in the 4th quarter after going through a difficult period in the previous quarter. Additionally, management announced that the quarterly dividend was increasing from $1.02 to $1.06, which turned out to be one cent more than the Desjardins analyst had predicted.

Despite these results, Doug Young maintains his recommendation to hold the stock, and his target price remains at $99, given that he believes that the total return potential seems more attractive at other banks.