Canada-based Bank of Nova Scotia BNS reported fiscal third-quarter results, which were lifted by better-than-expected retail performance, according to BMO.
The Analyst
BMO Capital Markets analyst Sohrab Movahedi maintains an Outperform rating on Bank of Nova Scotia with a price target lowered from CA$80 to CA$78.
The Thesis
Bank of Nova Scotia, also known as Scotiabank, reported an adjusted cash EPS of $1.88 in the quarter which beat expectations of $1.83 per share. Movahedi said the beat can be attributed to multiple business lines domestically and internationally performing better than expected.
The Canadian banking business (50% of total bank) accounts recorded a 3% year-over-year increase in earnings at $1.1 billion with notable strength in Wealth Management and aided by better-than-expected contribution from recent acquisitions.
Movahedi said the international banking business (35% of total bank) saw a 14% improvement in earnings due to a strong 27% loan growth. The smallest unit, Global Banking & Markets (16% of total bank) did show a 15% drop in earnings and 20% higher trading revenue was offset by lower underwriting and advisory revenue along with higher expenses.
Price Action
Shares of Bank of Nova Scotia were trading higher at CA$69.20.
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