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Research Alert: CFRA Reiterates Sell Opinion On Shares Of The Bank Of Nova Scotia

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

We increase our 12-month target price by CAD5 to CAD79, 8.7x our FY 27 (Oct.) EPS view, a discount to the peer average of 14.7x given inconsistent execution. We raise our FY 26 EPS view to CAD8.41 from CAD8.21 and increase FY 27's to CAD9.12 from CAD9.06. Our revenue projections are CAD39.8 billion for 2026 and CAD41.7 billion for 2027. Despite optimistic comments from management regarding balance sheet growth, we continue to be disappointed. In the Apr-Q, loans were flat year-over-year, and we don't believe the recent uptick in commercial balances will be sufficient to bring BNS's growth rate in line with its peers. Deposits are equally concerning, declining 1% year-over-year. Furthermore, despite management's confidence in earnings growth, the bank raised its quarterly dividend by only 3.6% to CAD1.14, a modest increase. On a positive note, BNS has improved its efficiency metrics alongside other Canadian banks, with meaningful gains in both ROE and productivity ratio in recent quarters.

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