No room for missteps in bank earnings after run-up in lenders’ stocks: fund manager
TORONTO — Canada's big banks are expected to deliver another strong performance when they report third-quarter earnings this week, but money managers and analysts are wary that any missteps could mean volatility for their high-flying shares.
Canada's major banks are poised for robust third-quarter earnings, but fund managers caution that missteps could lead to volatility in their high-flying stocks. Despite navigating challenges such as fluctuating tariffs, sluggish economic growth, and a slow housing market recovery, the banks have demonstrated resilience, driving share prices up by 20 to 35 percent year-to-date.
Brian Madden, chief investment officer at First Avenue Investment Counsel, expects the mid-point of annual earnings growth for the Big Six banks to be around 13 percent. While the banks have managed the economic situation well, with credit loss provisions at their lowest levels, analysts remain concerned about whether current valuations fully reflect the uncertain outlook for bank earnings.
TD Bank, Royal Bank, and BMO Financial Group are expected to perform particularly well, while Jefferies analyst John Aiken warns that the next quarter will need to see earnings catch up to current prices, which remains a near-term uncertainty.
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- No room for missteps in bank earnings after run-up in lenders’ stocks: fund manager winnipegfreepress.com
