Canada's Scotiabank Q1 adjusted net income beats expectations on growth across business lines

Overview

• Canada bank's Q1 adjusted net income beat analyst expectations

• Adjusted EPS for Q1 grew 16% yr/yr

• Company reported strong adjusted ROE of 13%

Outlook

• Scotiabank aims for ROE above 14% by 2027

• Company sees positive operating leverage in Canadian Banking

• Scotiabank expects continued earnings growth across business lines

Result Drivers

• CANADIAN BANKING - Earnings increased 5% driven by revenue growth and disciplined expense management, partly offset by higher credit loss provisions

• INTERNATIONAL BANKING - Earnings rose 7% due to margin expansion and strong positive operating leverage

• GLOBAL WEALTH MANAGEMENT - Adjusted earnings increased 18% driven by higher mutual fund fees, brokerage revenues, and net interest income

Company press release: ID:nCNWhkXq5a

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 5 "strong buy" or "buy", 8 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Bank of Nova Scotia is C$107.00, about 2.9% above its February 23 closing price of C$104.01

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 12 three months ago

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