Inside the Market’s roundup of some of today’s key analyst actions
While Bank of Nova Scotia’s (BNS-T) second-quarter results were “mixed”, RBC Dominion Securities analyst Darko Mihelic sees reasons for optimism.
“We view Q2/26 results as relatively in line with consensus but above our expectations excluding the ‘noise’,” he said in a client report. “Canadian Banking results were the most positive versus our estimates and included sequential NIM [net interest margin] improvement (asset spread pickup from loan growth & higher-priced term deposit run off). BNS expects PCLs [provisions for credit losses] to moderate from H1/26 levels more gradually than previously anticipated, and guided to an impaired PCL ratio in the mid-50s for the remainder of 2026, slightly elevated versus its initial outlook.”
Scotia shares closed 0.5 per cent higher on Wednesday after it reported core cash earnings per share of $2.02, exceeding both Mr. Mihelic’s $1.87 estimate and the Street’s projection of $1.93. However, total PCLs of $1.217-billion topped his $1.190-billion estimate
“Results were better than we expected in all segments except for Global Banking and Markets (GBM),” the analyst said in a client note. “The quarter included revaluation gains of Davivienda and treasury gains in Corporate, a tax benefit in International Banking, and a large provision for credit loss (PCL) from Brazil. We do not typically adjust for PCLs so we view earnings power as closer to approximately $1.93 but we also think PCLs can be lumpy from time to time.
“We update our model primarily reflecting higher estimates in Canadian Banking and Global Wealth Management, partially offset by lower estimates in International Banking. Our core EPS estimates increase to $8.35 (was $8.09) in 2026 and $9.29 (was $9.02) in 2027.”
With those changes, Mr. Mihelic increased his target for Scotia shares to $117 from $98, reiterating a “sector perform” rating.. The average target on the Street is $110.01, according to LSEG data.
“BNS is trading at the lowest valuations in the group, reflecting its low ROE, struggles to build its Canadian franchise and considerable work required on the International business,” he said. “BNS is trading at the lowest P/B multiple in the group of 1.77 times, above its long-term historical average of 1.56 times. While BNS’s valuation looks relatively attractive, our core ROE estimates are lower relative to the group: 13.2 per cent (versus the peer average of 14.9 per cent) in 2026 and 14.1 per cent (versus the peer average of 15.4 per cent) in 2027.”
Elsewhere, others making adjustments to their targets include:
* Raymond James’ Stephen Boland to $121 from $120 with an “outperform” rating.
“We continue to view Scotiabank as offering greater ROE expansion potential relative to peers. This is supported by ongoing funding and NIM improvement, strategic divestitures, growth in fee-based revenue streams, and disciplined expense management driving positive operating leverage. With shares still trading at roughly a 1.5 times P/E discount to peers, we believe the valuation gap can continue to narrow as execution against the revised strategic plan progresses,” said Mr. Boland.
* CIBC’s Paul Holden to $122 from $116 with a “neutral” rating.
“It was a mixed quarter, but a slight net-negative, in our view, given the revised guidance for impaired PCLs. The P/E discount has blown out to 13 per cent, which is close to its widest. However, we don’t think this is the time for a re-rate as BNS is the high PCL ratio bank and PCL expectations are moving higher,” said Mr. Holden.
* Barclays’ Brian Morton to $110 from $108 with an “equalweight” rating.
“EPS above expectations, driven by better-than-expected NII and fees as well as tax rate while PCLs were above expectations and expenses were in line. GILs, formations and NCOs all rose modestly. Still, BNS sees impaired PCLs elevated near term with a 14-per-cent-plus ROE achievable in 2027,” said Mr. Morton.
* Desjardins Securities’ Doug Young to $115 from $108 with a “hold” rating.
“Cash EPS and adjusted pre-tax, pre-provision (PTPP) earnings were 3% and 2% above our estimates (5 per cent and 4 per cent above consensus), respectively. There were some one-time items to pick on, but the biggest pushback likely will be the increase to its impaired PCL rate guidance. That said, management still believes it is on track to achieve a 14-per-cent cash ROE by FY27,” said Mr. Young.
* TD Cowen’s Mario Mendonca to $113 from $112 with a “holf” rating.
“In the context of BNS’s P/E discount, we view these results as good enough. However, we don’t call it a strong quarter. We are encouraged by the tight lid on expenses and emerging growth in CAD commercial, but we remain cautious on credit and disappointed by the lack of momentum in International commercial loan growth. BNS’s weaker long-term growth outlook and ROE continues to support a discount P/E.,” said Mr. Mendonca.
While a strong performance in its Capital Markets business drove better-than-anticipated second-quarter results for Bank of Montreal (BMO-T), National Bank Financial analyst Gabriel Dechaine said “other elements impress.”
BMO reported quarterly adjusted earnings per share of $3.67, topping both the analyst’s $3.50 estimate and the consensus forecast of $3.45. He attributed the beat to “higher PTPP (up 10 cents, mainly trading/advisory), lower PCLs (up 6 cents) and a lower tax rate (up 3 cents).
Calling the impact of the release “positive” for both BMO and investors, Mr. Dechaine pointed to a rebound in its personal and commercial loan growth south of the boarder, while its Capital Markets segment outperformed guidance.
“BMO’s U.S. loan growth has been a source of disappointment in recent years, especially as the market looks for evidence of revenue synergies from the Bank of the West (BotW) acquisition,” he explained. “A balance sheet optimization strategy that started during fiscal 2025 and was completed with the disposition of the Transportation Finance business. During the quarter, average loans were up 1 per cent quarter-over-quarter, led by commercial loans (period end balances were up 4 per cent). BMO expects mid-single digit growth in the second half, net of the announced Transportation Finance disposition. We note that loan growth is an important driver of the bank’s ROE expansion target for the segment (i.e., from 9.3 per cent during Q2/26 to 12 per cent).
”Capital Markets business outperforms guidance. This segment generated $900-million of PTPP, 11 per cent ahead of consensus expectations, and above the $750 mln run-rate guidance. Performance was boosted by trading and advisory revenues that were both 15 per cent above our forecasts. Trading outperformance was led by equities trading revenues, which doubled year-over-year. Assuming volatile market conditions persist, and secondary issuance activity remains robust (e.g., in the mining sector), BMO could continue to exceed its run-rate benchmark.
Also noting a “stable” credit performance, summarizing it as “no news is good news,” Mr. Dechaine increased his forecast to “account for stronger loan growth and capital markets revenues.” Also increasing his valuation multiple, calling it “a reflection of our increased confidence in BMO’s ROE upside potential,” he bumped his target for its shares to $236 from $223, keeping a “sector perform” rating. The average is $216.61.
Elsewhere, others making adjustments include:
* CIBC’s Paul Holden to $244 from $226 with an “outperformer” rating.
“FQ2 results should strengthen confidence that BMO can achieve its 15% ROE target in F2028 supported by growth in U.S. Banking, improving expense efficiency, and share buybacks. We estimate that there is 5-per-cent upside to F2028 consensus EPS if BMO achieves the 15-per-cent ROE. Our F2027E EPS increases slightly on higher assumed loan growth,” said Mr. Holden.
* Raymond James’ Stephen Boland to $233.50 from $227 with an “outperform” rating.
“Overall, our outlook for BMO continues to play out positively. We believe the bank is benefiting from its greater U.S. and commercial mix relative to peers. In our view, this positioning should support stronger loan growth and NIM performance while helping shield the bank from some of the ongoing stress impacting the Canadian consumer,” said Mr. Boland.
* RBC’s Darko Mihelic to $230 from $205 with a “sector perform” rating.
“BMO’s Q2/26 results were stronger than expected across most segments, except for Canada,” said Mr. Mihelic. “We see solid U.S. results and model for better revenue/PPPT growth in that segment. BMO maintained its stage 3 (impaired) provision for credit loss (PCL) ratio guidance of mid-40s bps for the next few quarters and expects its impaired PCL ratio to improve to mid-30s bps by the end of 2027. We decrease our impaired PCL ratio estimates in 2027 to get closer to this guide as BMO’s PCL was better than expected this quarter.”
* TD Cowen’s Mario Mendonca to $239 from $234 with a “buy” rating.
“BMO beat consensus and our estimates on CMRR and lower PCLs. Our BMO upgrade reflected a positive outlook on ROE progression driven by lower PCLs, buybacks, U.S. NIM, and improving loan growth. We saw solid progress on all fronts. While we believe CAD unsecured consumer credit could be a problem later in ’26, BMO’s domestic cards book is not large enough to lead to issues at the consolidated level,” said Mr. Mendonca.
* Desjardins Securities’ Doug Young to $230 from $212 with a “hold” rating.
“Positives. (1) Solid beat. (2) No big credit surprises and things appear to be moving in the right direction. Impaired and total PCLs came in below what we expected; BMO expects impaired PCL rates in the mid-40bps range over the next few quarters and for the PCL rate to be within its previously guided range for the full year. New gross impaired loan formations declined qoq and yoy, and management stated that its commercial (bad loan) watch list is down 20 per cent year-over-year. (3) U.S. banking adjusted PTPP earnings beat our estimate (higher NIM and non-interest revenue). There was no change to its view on commercial loan growth (mid-single digits in 2H) and the transformation of its US banking division is complete. (4) It was a good quarter for the wealth management and capital markets businesses. (5) Efficiency ratio at the top of house was below our estimate, and the bank generated strong positive operating leverage,” said Mr. Young.
* Barclays’ Brian Morton to $203 from $199 with an “underweight” rating.
“Adjusted EPS exceeded consensus estimates on better-than-expected fees, PCLs and expenses partially offset by lower-than-modeled NII. Adjusted PPPT rose 5 per cent linked quarter. Still, credit quality was benign, with GILs up 1.1 per cent and formations decreasing 1.6 per cent. It expects to achieve a 15-per-cent ROE by 2027,” said Mr. Morton.
Despite a negative reaction from investors, Desjardins Securities analyst Doug Young saw the second-quarter results for National Bank of Canada (NA-T) as “slightly positive” after cash earnings per share and adjusted pre-tax, pre provision (PTPP) earnings topped his expectations by 4 per cent and 2 per cent, respectively.
“The integration of CWB is ahead of plan, there was no change to its FY26 impaired PCL rate guidance, and management reiterated its adjusted ROE targets for FY26 (approximately 16 per cent) and FY27 (17 per cent plus). We increased our estimates,” he said.
National Bank shares fell 5 per cent on Wednesday after its PTPP earnings from its Canadian banking business fell under expectations, however its overall cash EPS of $3.23 topped both Mr. Young’s $3.10 estimate and the consensus projection of $3.13.
“Positives. (1) Cash EPS and adjusted PTPP earnings beat. (2) The capital markets division beat and management believes it can achieve adjusted PTPP earnings at the top end of guidance for FY26 (no change). Management believes it can grow capital markets earnings at the same pace as the rest of the bank, over time. (3) Wealth management adjusted PTPP earnings beat us. (4) Impaired and total PCLs were below our estimate, and there was no change to management’s impaired PCL rate guidance for FY26, although management expects some deterioration in 2H FY26 (not surprising). The increase in new gross impaired loan formations was due to one file in Western Canada (in the insured real estate bucket, and this didn’t require a PCL build). (5) The quarterly dividend was increased to $1.32, above our $1.29 estimate. (6) It increased its cost and funding synergy expectations from CWB to $300-million (from $270-million). Revenue synergies are on track. And the transition of CWB is mostly complete,” said Mr. Young in a note.
“Concerns. (1) Canadian banking adjusted PTPP earnings missed us and consensus, primarily due to higher expenses. On the flip side, commercial loans grew 11 per cent year-over-year (ex-CWB) driven by Western Canada, Ontario and Québec. (2) USSF&I adjusted PTPP earnings missed us and consensus.”
Maintaining his “buy” rating for National Bank shares, Mr. Young bumped his target to $217 from $215 alongside his higher earnings projections through 2027. The average target is $200.15.
Other changes include:
* CIBC’s to $221 from $209 with a “neutral” rating.
“It was an overall solid quarter other than the downside surprise on NIM. We have lowered our F2027 estimated EPS modestly, attributable to lower NIM. NA now trades at 15.0 times NTM [next 12 month] consensus P/E, a 2-per-cent premium to the group average. The big question for NA is where capital markets revenue will head in F2027,” said Mr. Holden.
* Raymond James’ Stephen Boland to $203 from $206.50 with a “market perform” rating.
“Overall, we continue to view NA’s underlying fundamentals favourably, supported by strong loan growth. Also improving CWB revenue synergies, and moderating expense growth as integration-related costs decline. That said, we expect these positives to be partially offset by a normalization in Capital Markets earnings and limited near-term NIM expansion. With NA continuing to trade at a premium to the Canadian bank peer group, we maintain our Market Perform rating,” said Mr. Boland.
Despite EQB Inc.’s (EQB-T) second-quarter earnings topping the Street’s expectations, TD Cowen analyst Mario Mendonca emphasized “elevated” expense results and sustained credit weakness.
After markets closed on Wednesday, the company behind Equitable Bank reported revenue of $302-4-million for the quarter ended April 30, down from $316-million for the same quarter last year but above the Street’s expectations $300.5-million.
Earnings per share of $2.03 was a gain of 12 per cent year-over-year but down 10 per cent quarter-over-quarter. It topped the consensus projecting of $1.98 but fell under Mr. Mendoca’s projection by 5 cents.
“The $0.05 Adj. EPS beat vs. consensus was low quality, in our view,“ he said. ”While the beat was driven by better operating leverage, expenses reflected a $33.6-million adjustment, including a $17.8-million provision to exit a merchant payments business which did not contribute materially to revenue or earnings. We believe investors will see the adjustments as a negative surprise, and that EQB might undergo additional charges to eventually exit the equipment loan business. Adj. Opex also benefited from a nonrecurring $5-million capital tax gain.
“Negative: Credit continues to deteriorate. Relative to our estimates, impaired PCLs were a $0.15 drag on adjusted EPS, with the 35 basis points impaired PCLs [provisions for credit losses] ratio higher than the 30 bps TD/ cons. estimates. Credit stress in the uninsured SFR book is not spreading beyond the GTA, but GILs continue to build on longer resolution timelines. SFR uninsured 90-day arrears ratios were up 20bps quarter-over-quarter.
Moving forward, Mr. Mendonca thinks investors will “focus on impaired PCLs and sizeable adjustments to operating expenses.”
“We like EQB on strong buying activity (buybacks/Loblaw) & PC deal, but acknowledge that credit and loan growth are an issue,” he noted.
Keeping his “buy” rating for EQB shares, the analyst dropped his target to $123 from $132. The average is $120.40.
“We have muted earnings growth expectations for F2026 given soft loan growth and credit trend expectations,” he said. “The PC Financial acquisition has strategic merit and we see upside potential if management can execute. Given the soft near-term outlook, but improving outlook going into F2027 (PC Financial) we think the valuation discount to the large banks appears fair.”
When Alimentation Couche-Tard Inc. (ATD-T) reports its fourth-quarter fiscal 2026 financial results on June 22, National Bank Financial analyst Vishal Shreedhar expects to see “strong” earnings per share growth driven by notable fuel margin gains.
“We anticipate higher year-over-year fuel margins across all regions of operations, largely reflecting heightened price volatility and continued supply chain optimization, among other factors,” he said. “We expect U.S. fuel volume to be pressured amid heightened fuel prices (especially lower income households; OPIS data suggests retail fuel prices are 14.1 per cent higher year-over-year during the quarter at $3.598 per gallon).
“[Oil Price Information Service] data suggests U.S. fuel margin averaged 34.6 cents per gallon in Q4/F26 (NBCM projects 47.6 c/g for ATD). We model a U.S. fuel margin delta of 13.1 c/g vs. OPIS based on our proprietary calculations. We are expecting fuel volume same-store sales growth of negative 2.0 per cent, notwithstanding sequentially improving industry data. Specifically, the Federal Highway Administration data indicates VMT increased 1.7 per cent year-over-year in Q4/F26 (data until March 2026), versus negative 0.3 per cent in Q3/F26. EIA data on weekly finished motor gasoline supplied suggests consumption increased 0.7 per cent year-over-year, versus a decline of 0.9 per cent during Q3/F26.”
Mr. Shreedhar is now projecting earnings per share for Couche-Tard of 58 cents for the quarter, up from 46 cents during the same period in the last fiscal year and 5 cents higher than the consensus forecast on the Street. He attributes 26-per-cent year-over-year to “aggregate merchandise same store sales growth, higher aggregate merchandising/fuel margin, acquisition (GetGo) contribution and share repurchases, partly offset by higher D&A, interest expense and tax rate.”
“Our expectation for 2.0-per-cent U.S. merchandising same-store sales growth reflects, in part, growth in food initiatives (as well as continued success of Meal Deals offers), and momentum in nicotine, partly offset by consumer caution,” he said. “Recall, ATD noted that trends in Q3/F26 (sssg was 2.8 per cent) continued partway into Q4/F26. We expect tepid Europe & other merchandising trends (flat sssg) reflecting growth in the food service program as well as the expansion of packaged beverages, offset by a challenged cigarette industry. We model Canada merchandising sssg of negative 0.5 per cent, reflecting a cautious consumer backdrop, partly offset by growth in alcohol and the food program.”
“Peer commentary suggests trends generally remained favorable despite higher fuel prices: Our review of peer commentary suggests: (i) Benefits to fuel margins from volatility (in addition to more frequent customer visits), (ii) Manufacturer support in nicotine (supporting traffic/transactions without impacting margins), and (iii) Adverse weather impacts in the quarter.”
Reiterating his investment thesis for the Montreal-based company, Mr. Shreedhar raised his target for its shares to $91 from $89 with an “outperform” rating. The average is $97.29.
“The key for ATD is to deliver sustained growth via organic drivers, share repurchases, and acquisitions,” he said. “We believe that the company is on firmer footing to deliver growth as numerous revenue drivers/efficiencies are in place, and largely showing results.”
In other analyst actions:
* Stifel’s Cole McGill initiated coverage of Vancouver-based Capitan Silver Corp. (CAPT-X) with a “speculative buy” rating and $3.75 target. The average is $3.63.
“Led by the former Argonaut Gold Mexican team [alongside former Peñoles CEO Fernando Alanís Ortega on the BoD], CAPT is advancing the high grade, scalable Cruz de Plata project in Mexico,” said Mr. McGill. “Where silver producers are i) set to generate double the FCF in 2026 over the prior decade combined and ii) experiencing muted volume growth to 2028, we think multiple expansion on already healthy multiples is driven by primary silver growth. The newly consolidated CdP has already shown scale via connecting the dots between continuous historic workings, (Stifel exploration target 116MMoz AgEq) and we see potential to double this through a straight forward 2026 program. The kicker: the top 50 intervals (g*m) from the first 50 holes drilled on CdP have averaged just 7 per cent less than the same sample at Las Chispas.”
* In a report titled Drill and they will come; Elephant lithocap in the heart of the Andes supports NAV growth, Mr. McGill became the first analyst to initiate coverage on King Copper Discovery Corp. (KCP-X), giving it a “speculative buy” rating and $1.75 target.
“Led by a team of high horsepower geologists [accolades include Thayer Lindsley Medal for discovery at Oyu Tolgoi] and industry veterans, KCP is laser focused on advancing the Colquemayo porphyry copper project in Peru. Since 2020, outsized NAVPS creation for Cu explorers in the Andes has been driven by a combination of i) sizable lithocap identification [Filo del Sol 37.1 square kilometres, Valeriano 9 square kilometres, Colquemayo more than 19 square kilometres] and ii) management teams with access to capital; we think KCP has both. Filo grew NAVPS 839 per cent from 2020 to the $4.5-billion 2024 acquisition, NGEX up 9573 per cent and ATEX 488 per cent since 2022. In a market that pays for growth, we see outsized value creation for early stage copper porphyry assets amongst a backdrop of producers’ lack of incentive to spend on exploration,” he said.
* Touting its “unique position” in the transformer market and projecting double-digit revenue growth in 2026 and 2027, JPMorgan’s Tomohiko Sano initiated coverage of Hammond Power Solutions Inc. (HPS.A-T) with an “overweight” rating and $430 target. The average is $343.25.
* Pointing to “high-margin” production at Fruta del Norte mine in southeast Ecuador and its stable cash flow, UBS’ George Eadie initiated coverage of Lundin Gold Inc. (LUG-T) with a “buy” rating and $103 target, which is below the $116.17 average.
* Ventum Capital’s Taylor Combaluzier, currently the lone analyst covering of Vancouver-based Northisle Copper and Gold Inc. (NCX-X), resumed coverage with a “buy” rating and $5.50 target.
“Northisle is advancing its flagship North Island Cu-Au-Mo porphyry project in British Columbia, a tier-one jurisdiction. Multiple 2026 catalysts – including an updated MRE and maiden PFS – could drive a major re-rating. We believe that North Island is a highly developable project that offers lots of resource expansion and exploration upside. With a proven management team in place, we expect momentum to continue in 2026," said Mr. Combaluzier.
* In a report titled Canadian Defence Industrial Strategy Accelerates, Scotia’s Konark Gupta raised his targets for Bombardier Inc. (BBD-B-T) to $330 from $305 and MDA Space Ltd. (MDA-T) to $70 from $53, keeping “sector outperform” ratings for both. The averages are $300.15 and $58.26, respectively.
“We view Canada’s selection of Saab for airborne early warning & control (AEW&C) program and decision to establish Canadian AEW&C assembly as a big positive for BBD.B and CAE, as well as directionally positive for MDA and EIF,” said Mr. Gupta. “The key here is that Canada is not just intending to acquire Saab GlobalEye but also aiming to build aircraft for allies. This is a strong evidence of Canada’s execution on Defence Industrial Strategy that aims to grow defence industry revenues by more than 240 per cent and exports by 50 per cent over the next decade. Our covered defence names, particularly BBD.B, CAE, EIF, and MDA, are strongly positioned to benefit from secular growth with their industry-leading offerings.”
"We expanded our multiple for BBD.B to reflect its unique position on the Saab deal and for MDA on potential upside risk to long-term growth outlook from solid defence prospects, on top of space renaissance. In addition, space valuations have significantly expanded due to accelerating activity in the sector. CAE remains our overall top pick, supported by its attractive valuation and defence acceleration."
* TD Cowen’s David Kwan cut his target for Coveo Solutions Inc. (CVO-T) to $6.50 from $9.50, falling under the $7.80 average, with a “buy” rating, while BMO’s Thanos Moschopoulos reduced his target to $6 from $10 with an “outperform” rating
“The road back to 20-per-cent-plus organic growth remains a rocky one, as sales execution/efficiency issues continue to hinder CVO’s growth profile and valuation. We expect the stock to be weak near term on the disappointing growth guidance and think CVO will be (more) active with its buyback (possibly with another SIB). We view CVO as an attractive takeout target, and note that Canadian small cap tech M&A remains active,” he said.
* RBC’s Keith Mackey moved his target for Enerflex Ltd. (EFXT-N, EFX-T) to US$32 from US$31 with an “outperform” rating. Other changes include: Raymond James’ Michael Barth to $46 from $45 with an “outperform” rating and TD Cowen’s Aaron MacNeil to $45 from $44 with a “buy” rating. The average is US$30.11.
“Enerflex’s virtual investor update provided clear insight into how it plans to drive growth, expand margins, and create shareholder value over the next five years,” Mr. Mackey said. “We raise our 2027 EBITDA estimates by 4 per cent ... Enerflex is on RBC’s Global Energy Best Ideas list and Canadian Small Cap Conviction list.”
“Enerflex’s strategic direction is anchored in three pillars, including 1) Driving productivity through operational excellence, 2) Focusing capital on the highest value growth opportunities in markets where it can win, and 3) Allocating capital with discipline to create shareholder returns.”