Bank of Nova Scotia (BNS:CA) (BNS)
TD Cowen raised its target price on the stock to C$93 from C$87, reflecting a more optimistic outlook for the bank’s earnings trajectory. The firm highlighted several supportive factors, including expectations for further net interest margin (NIM) expansion, which suggests Scotiabank will benefit from higher lending spreads as interest rates stabilize. Analysts also pointed to balance sheet optimization efforts, which are improving capital efficiency, as well as the bank’s ongoing share buyback program, which provides return of capital to shareholders and helps support earnings per share growth.
TD Cowen emphasized an improving credit outlook, particularly as loan losses and provisions for credit risk appear to be moderating compared with earlier in the year. This signals greater confidence in the resilience of Scotiabank’s loan portfolio across both Canadian and international markets. Collectively, these factors underpin a stronger long-term performance profile, though analysts still caution that global economic headwinds and slower growth in some of Scotiabank’s international markets may temper upside momentum.
Stock Forecast & Analysis
Analysts remain largely cautious on Bank of Nova Scotia, with the stock carrying a consensus “Hold” rating that reflects limited conviction in near-term outperformance. Out of 14 major research firms actively covering the bank, 9 recommend holding, 4 suggest buying, and only 1 has a “Strong Buy” rating, underscoring a general sentiment that the risk-reward profile is balanced rather than compelling.
The average 12-month price target sits at C$83 per share. At present levels, the stock’s valuation implies that much of the positive narrative—such as balance sheet optimization, share buybacks, and stable net interest margins—has already been priced in. As a result, analysts suggest that the stock is fairly valued, unless Scotiabank can deliver above-consensus earnings growth, show stronger execution in its Latin American markets, or demonstrate sustained improvement in asset quality trends.
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With loan losses stabilizing and Scotiabank focusing on capital efficiency, it’s good to see some positive momentum. I’m curious, though, how much the international markets might continue to drag on growth given the slowdowns.