Bank of Nova Scotia (BNS), Canada’s third-largest bank by total assets, will report its Q4 financial results on November 30 before the opening bell.
Year-to-date, the bank stock has jumped by approximately 20% and is currently trading over C$81.
Let’s have a look at what analysts are expecting, as solid earnings could drive BNS stock higher. (See Analysts’ Top Stocks on TipRanks)
Analysts are expecting Scotiabank to post adjusted EPS of C$1.90 in the fourth quarter of 2021, indicating a growth of 31% from the prior-year quarter (C$1.45 per share). The estimated revenue is C$7.83 billion, which would represent an increase of 4.3% from the fourth quarter of 2020 (C$7.5 billion).
Scotiabank topped earnings estimates in the past four quarters and is poised to beat them again in the coming quarter. That’s because Scotiabank has seen favorable earnings estimate revision activity lately, which is usually a precursor to an earnings beat.
Points to Watch
Recovery in business and credit card loans, strong growth in mortgages, and continued reserve releases are likely to have had a positive impact on Scotiabank’s earnings.
The bank, as well as the other Canadian big banks, is set to resume increasing dividends and share buybacks after a nearly two-year hiatus. National Bank Financial analyst Gabriel Dechaine expects Scotiabank to hike its dividend by 10%.
Wall Street’s Take
On November 24, Canaccord Genuity analyst Scott Chan upgraded BNS to Buy from Hold with a price target of C$88. This implies 8.2% upside potential.
The rest of the Street is cautiously optimistic on BNS with a Moderate Buy consensus rating based on five Buys and three Holds. The average Bank of Nova Scotia price target of C$87.67 implies 7.8% upside potential to current levels.
TipRanks’ Smart Score
BNS scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock returns should outperform the overall market.