Scotiabank Q1 Earnings Preview: What to Expect

Bank of Nova Scotia (TSE: BNS) (NYSE: BNS) will report its Q1 2022 financial results on March 1 before the opening bell.

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Stock Performance

Year-to-date, the bank stock has risen by approximately 1.6% and is currently trading over C$91.

Let’s have a look at what analysts are expecting, as strong earnings could push BNS stock higher.

Analyst Estimates

Analysts are expecting Scotiabank to post adjusted EPS of C$2.05 in the first quarter of 2022, indicating a growth of 9% from the prior-year quarter (C$1.88 per share). The estimated revenue is C$7.86 billion, which would represent a decrease of 2.6% from the first quarter of 2021 (C$8.07 billion).

Scotiabank beat analysts’ estimates in the last five quarters and could beat them again this quarter.

Points to watch

Among bullish factors analysts are watching for big banks, let’s note the demand for residential and commercial mortgages, which has increased despite expectations of rate hikes.

A bearish factor for Canadian banks is that fixed rates on mortgages have risen, but more slowly than short-term rates, which drive borrowing costs.

Wall Street’s Take

On February 23, National Bank Financial analyst Gabriel Dechaine kept a Hold rating on BNS and raised the price target to C$90 (from C$86). This implies 1.6% downside potential.

The rest of the Street is bullish on BNS with a Strong Buy consensus rating based on six Buys and two Holds. The average Bank of Nova Scotia price target of C$97.87 implies 7% upside potential to current levels.

TipRanks’ Smart Score

BNS scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock returns have strong chances to beat the overall market.

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