(August 28 – 16:20 ET) – Three more major Canadian banks must still report their latest earnings but Merrill Lynch is already finding the quarter to be a bit of a surprise.
Last week’s earnings results were unexpectedly good at Royal Bank of Canada and Toronto-Dominion Bank and yet surprisingly poor at Bank of Montreal, the firm said. Based on the numbers, and subsequent market action, it said BMO is now being treated as a value stock, while Royal and TD are growth plays. Although it downgraded BMO last week, Merrill says the stock currently looks cheap.
The firm still touts Royal and Canadian Imperial Bank of Commerce as its top picks, noting that banks as a group may run up in the fall as capital market activity improves, cost cutting bears fruit and the interest rate environment remains supportive.
Tomorrow, Bank of Nova Scotia is scheduled to report its results and Merrill is calling for earnings of 82¢ a share, lower than the consensus estimate of 85¢. National Bank of Canada will report Thursday and Merrill predicts healthy earnings of 59¢ a share. CIBC will report next Thursday. Merrill is calling for earnings of 90¢ a share, well ahead of the consensus estimate of 85¢.
-IE Staff