Research Alert: CFRA Reiterates Buy Opinion On Shares Of National Bank Of Canada
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:After digesting Q2 results, we raise our 12-month target price by CAD15 to CAD265, which is 18.6x our FY 27 (Oct.) EPS view of CAD14.21, a premium to its five-year forward P/E of 10.9x, given expected efficiency gains and improving revenue diversity. We increase our FY 26 EPS view to CAD12.90 from CAD12.65 and our FY 27 EPS view to CAD14.21 from CAD13.97. NA is one of our top bank picks in Canada, as the bank consistently outgrows its peers. This growth is also driving efficiency improvements, with adjusted ROE averaging a strong 16.7% in 1H FY 26. Given the bank's solid performance and well-controlled expense growth, we expect full-year FY 26 ROE to approach 17%, exceeding management's 16% target. Despite macroeconomic uncertainty and renewed inflation concerns, NA raised its dividend by 6% to CAD1.32 per share. While 6% growth is still above peers, this increase is relatively conservative in our view, given our expectation for double-digit earnings growth in both FY 26 and FY 27.
