National Bank of Canada (NA:CA)
National Bank of Canada saw its 12 month target price trimmed by Jefferies to C$153 from C$157, as analysts raised red flags over the bank’s near-term growth trajectory. The valuation downgrade stems from softer-than-expected top-line performance, where a noticeable slowdown in trading operations weighed heavily on overall revenue. This weakness comes despite relatively stable results across core areas such as lending, retail banking, and wealth management, which continue to provide a solid base of recurring income.
Jefferies noted that the slump in trading reflects broader headwinds facing Canadian banks, including lower market activity, subdued investor sentiment, and a less favorable interest rate environment that has limited opportunities for capital markets growth. The concern is that this revenue mix imbalance could place downward pressure on margins and earnings in upcoming quarters, particularly if macroeconomic uncertainty persists.
At the same time, the bank maintains a strong balance sheet, disciplined risk management, and healthy capital ratios, which act as buffers against market volatility. However, Jefferies cautioned that investors should moderate expectations for near-term share price appreciation, as strength in lending and wealth management may not be enough to fully counterbalance the drag from weaker capital markets performance. The lowered target price reflects a more cautious stance on the bank’s earnings power in the current environment.
STA Research (StockTargetAdvisor.com) is a independent Investment Research company that specializes in stock forecasting and analysis with integrated AI, based on our platform stocktargetadvisor.com, EST 2007.
1 thought on “National Bank of Canada: Jefferies Cuts Valuation on Growth Concerns”