UBS Maintains Neutral On Bank Of Nova Scotia Following Q3 Results, Lowers PT To $75


In a report issued yesterday, UBS analyst Derek De Vries maintained a Neutral rating on Bank of Nova Scotia (NYSE:BNS), following third quarter results. In reaction to the lower than expected results , UBS cut the 2015 and 2016 EPS forecasts by 2%. Price target was lowered to $75 (from $76).

De Vries noted: “If we assume BNS needs a 10% common equity tier 1 ratio, it is currently sitting on $2.9 bn of excess capital. While it will integrate two small acquisitions in Q4 and Q1 respectively, we simply don’t see BNS’ capital ratios declining significantly. Our forecasts use share buyback to approximate the returns BNS management could generate, but the uncertainty around deployment of excess capital remains a negative.”

“The biggest surprise in BNS’ Q3 reporting was 1.5% quarter on quarter decline in international banking average loans. Management was reassuring on underlying trends in its four core markets and Asia, but more cautious on the Caribbean and Central America. Regardless, we still consider BNS emerging markets franchise a growth vehicle and forecast 9-10% annual loan growth in 2015-16E.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Derek De Vries has a total average return of 4.7% and a 86% success rate. Munster is ranked #1847 out of 3265 analysts.

 

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