(January 22 – 18:20 ET) – Merrill Lynch is raising its valuation range for Canadian bank stocks, thanks to falling interest rates.

Merrill says, “We are expanding our target multiple range for the Canadian banks from 11-14 times earnings to 12-15 times earnings based on the prospect for lower overall interest rates, a steeper yield curve and for stabilizing to improving loan volumes in the 6%-8% range for the next year.”

As a result of this action, it is also raising its price target for Royal Bank from $58 to $61. Merrill says it remains positively biased on Royal’s revenue picture.

Merrill lauds the bank’s recent U.S. acquisitions and says that Royal;s wealth management/retail cross-selling program is in the best shape.
-IE Staff