Barlow’s Research Roundup: RBC analyst’s bank earnings preview and a huge endorsement for uranium

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Bank earnings ahead

RBC Capital Markets analyst Darko Mihelic previewed earnings season for the major banks,

“The large Canadian banks will begin reporting Q2/26 results on May 27, 2026. We update our models and our core EPS estimates increase 0.9 per cent on average. Our estimates suggest Q2/26 core EPS will decrease 6 per cent quarter-over-quarter but increase 21 per cent year-over-year on average. We assume higher capital markets core earnings for all the large Canadian banks under our coverage (except for BNS), mainly reflecting higher fee revenues partially offset by lower trading revenues. We model higher total provisions for credit losses (PCLs) across the group except for TD, mainly driven by higher stage 1 and 2 (performing) PCLs compared to our prior estimates. We reflect small negative impacts in Canada P&C segments for all the large Canadian banks we cover related to the non-sufficient funds (NSF) fee cap regulation, which came into effect in March 2026. Our core EPS estimates are ahead of consensus the most for NA but below consensus the most for BNS (out of our large Canadian bank coverage; out of all our covered Canadian banks our core EPS estimate is below consensus the most for EQB). We have lower conviction in our core EPS for NA as we believe our trading revenue estimates could have a significant degree of error … As of market close ET on May 11, 2026, the Canadian bank index’s performance has outperformed relative to the broader Canadian market on a year-to-date (YTD) basis. The Canadian bank index has generated a total return of 13 per cent YTD, above the total return of the TSX of 8 per cent YTD and the S&P 500 total return of 9 per cent YTD. Of the large Canadian banks we cover, CM has generated the highest total return of 23 per cent year-to-date, while BNS has generated a total return of 6 per cent YTD and LB has generated a total return of 2-per-cent YTD … On a forward P/E basis, the Canadian bank index is trading at peak levels at 14.4 times, above the long-term average of 11.3 times and the average since 2010 of 11.1 times”

Mr. Mihelic has “outperform” ratings on Canadian Imperial Bank of Commerce (CM-T) and Toronto-Dominion Bank (TD-T).

Uranium bulls

BofA Securities is hosting a huge mining conference in Miami. The day one summary from analyst Lawson Winder includes a very positive endorsement for uranium,

“Middle East conflict cost pressures are manageable for this year, but potential demand impacts are a concern … Company ‘one-liners’ for our coverage

“FCX: Big Grasberg de-risking done, confidence in ramp-up. STLD: Steel price strength is durable. Ali ramp-up on track with upside. CMC: Structural uplift driven by TAG and pre-cast business. IVN: More conservative approach to copper growth. CCJ: Ideally placed to benefit from the unfolding growth in nuclear energy. LUN: Built to deliver the world-class Vicuña copper district. FM: Moving toward a sustainable restart of the Cobre Panama mine. HBM: Americas-focused copper production with material gold exposure … panelists all agreed that the current nuclear development cycle is broad, substantial, still relatively early, and strongly underpinned by four themes: energy security, decarbonization, electrical intensification, and geopolitical risk. Unlike previous cycles, today’s tightening is occurring after more than a decade of underinvestment following Fukushima. Key takeaways align with our views and support our forecast for a strong uranium price forecast for H2′26E and into 2027E (when we forecast the uranium price averaging $135/lb, or 50 per cent plus higher vs. spot pricing).

Tech over energy

Wells Fargo senior global market strategist Scott Wren likes technology stocks over energy,

“Energy-related commodities such as oil, which have provided what we believe are temporary earings benefits to companies in the S&P 500 Energy sector, have been recognized by the market through meaningfully higher share prices that our analysis suggests are fully valued for this point in time. We see a better opportunity and more reasonable relative valuations in the S&P 500 Information Technology sector. This sector has gained in the past six weeks, but Bloomberg consensus 2026 earnings estimates for the sector have risen by much more. Part of the benefit we see is that many technology companies can benefit from a reliable source of energy. The U.S. has abundant natural gas and imports only 2 per cent of its crude oil from the Middle East, giving the U.S. a comparative advantage to much of the world, including Japan, China, and the eurozone, which rely on energy imports from the Middle East. Consequently, on April 6 we downgraded the Energy sector to unfavorable (below market weight) and upgraded the Information Technology sector to favorable (overweight). More generally, we look to rebalance portfolios as opportunities present themselves in an effort to take advantage of price movements we feel are out of sync with the underlying fundamentals. We also want to focus on sub-sectors where companies can pass along higher energy costs and that we think present opportunities as longer-term investment trends play out in such areas as artificial intelligence (AI), industrial automation, and defense”

Bluesky post of the day

Diversion

“Neanderthals drilled cavities to treat a toothache 59,000 years ago” - Ars Technica