BUZZ-Canadian banks' 2025 outlook clouded by US tariffs risk, brokerages say

Canadian banks are expected to post strong Q1 earnings next week, but their outlook for the rest of 2025 remains uncertain due to risk of a tariff war between the U.S. and other countries, say brokerages CIBC Capital Markets and Jefferies

CIBC downgrades Bank of Nova Scotia BNS.TO to 'neutral' from 'outperformer', citing shifting macroeconomic environment and the lender's greater susceptibility to tariffs compared to peers

"We could return to a more positive call if Mexico and Canada are able to negotiate relatively harmless tariffs" - CIBC on BNS

Jefferies expects near-term benefits for Royal Bank of Canada RY.TO and Bank of Montreal BMO.TO off a weaker Canadian dollar and stronger capital markets activity

Jefferies cuts Toronto-Dominion Bank TD.TO to 'hold' from 'buy'; citing the bank's ongoing efforts to regain lost valuation following U.S. regulatory and anti-money laundering issues

TD shares fell ~11% in 2024, RY and CM climbed ~29% and ~43% respectively; BMO gained ~6% and BNS jumped ~20% over the same period