National Bank of Canada (NA) AI Stock Analysis

• Market Cap: $44.19B
• Dividend Yield: 4.09%
• Average Volume (3M): 2.29M
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.79
• Revenue Growth: 17.13%
• EPS Growth: 14.73%
• Country: CA
• Employees: 29,508
• Sector: Financial
• Sector Strength: 81
• Industry: Banks - Diversified
• EPS (TTM): 10.98
• Shares Outstanding: 391,239,320
• 10 Day Avg. Volume: 2,290,687
• 30 Day Avg. Volume: 2,290,661
• PEG Ratio: 0.70
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.34
• Price to Cash Flow (P/CF): 2.50
• P/FCF Ratio: 1.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$134.91
• Price Target Upside: 21.94% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

The National Bank of Canada demonstrates solid financial health with strong revenue growth and profitability, supported by efficient equity utilization. However, high leverage and bearish technical indicators present risks. The stock appears undervalued with a reasonable dividend yield, but macroeconomic uncertainties could affect future performance. The recent earnings call confirmed robust strategic progress despite challenges.

Positive Factors

Earnings Growth

The acquisition of CWB is expected to enhance earnings growth and provide diversification over time.

Operating Leverage

Revenue was up by 19% while expenses were up by 12%, contributing to positive operating leverage of 7%.

Trading Revenue

Record trading revenue significantly boosted Financial Markets earnings, contributing to a strong performance.

Negative Factors

Credit Concerns

Higher than expected PCLs indicate potential challenges, with the highest quarterly PCL rate since Q1/11 outside of COVID and Oil & Gas sectorals.

Earnings Expectations

Expecting more muted earnings with low-single-digit EPS growth in F25 due to elevated PCL guidance and earnings adjustment.

Integration Risks

The target price was lowered due to integration risks of the CWB acquisition and tariff uncertainty.

National Bank of Canada Business Overview & Revenue Model

Company Description

National Bank of Canada (NA) is one of the largest financial institutions in Canada, primarily serving clients in Quebec while also extending its services across the country and internationally. The bank operates in several sectors including personal and commercial banking, wealth management, and financial markets. Its core products and services encompass a wide range of financial solutions, including banking, investment, and insurance products tailored to individuals, businesses, and institutional clients.

How the Company Makes Money

National Bank of Canada generates revenue through a diversified business model primarily consisting of three key segments: personal and commercial banking, wealth management, and financial markets. In personal and commercial banking, the bank earns money through interest income from loans and mortgages, as well as fees from banking services such as transaction accounts and credit cards. Wealth management contributes to revenue through advisory services, brokerage fees, and asset management charges. In financial markets, the bank makes money from trading activities, underwriting services, and providing capital markets solutions to corporate and institutional clients. The bank's earnings are supported by strategic partnerships and collaborations that enhance its product offerings and market reach.

National Bank of Canada Financial Statement Overview

Summary

National Bank of Canada shows strong revenue growth and profitability with robust margins. Effective equity utilization is evident, though high leverage requires monitoring. Cash flow management is efficient, albeit with some free cash flow pressures due to capital expenditure.

Income Statement

The National Bank of Canada shows robust revenue growth with a consistent increase in total revenue over the periods. The TTM (Trailing-Twelve-Months) data indicates a healthy gross profit margin of 127.8%, and a solid net profit margin of 24.4%. While EBIT margin is 7.82%, the absence of EBITDA data limits a complete analysis. Revenue growth remains strong, indicating effective market strategies and operations, although the decrease in EBIT from earlier periods suggests potential cost pressures.

Balance Sheet

The company's balance sheet reveals a strong equity position with a debt-to-equity ratio of 3.19, indicating moderate leverage. Return on equity (ROE) is impressive at 14.74%, reflecting effective utilization of shareholders' funds. The equity ratio stands at 5.45%, showing a stable financial foundation, though the high leverage could pose risks in volatile market conditions.

Cash Flow

Cash flow analysis highlights a decline in free cash flow growth, but the company maintains a positive operating cash flow to net income ratio of 0.70, suggesting efficient cash management relative to earnings. However, the free cash flow to net income ratio of 0.57 indicates some pressure on free cash generation relative to profits, potentially due to capital expenditure and investment activities.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
15.94B	11.41B	9.77B	9.62B	8.90B	7.90B
	Gross Profit
20.38B	11.41B	10.16B	9.62B	8.90B	7.90B
	EBIT
1.25B	0.00	4.64B	8.55B	4.07B	2.49B
	EBITDA
0.00	0.00	0.00	4.73B	4.46B	2.96B
	Net Income Common Stockholders
3.89B	3.82B	3.34B	3.38B	3.14B	2.04B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
39.05B	35.75B	39.14B	36.34B	36.81B	34.71B
	Total Assets
483.83B	462.23B	423.58B	403.74B	355.80B	331.63B
	Total Debt
84.25B	74.78B	53.51B	45.98B	43.64B	36.49B
	Net Debt
49.64B	43.23B	18.28B	14.11B	9.76B	7.35B
	Total Liabilities
457.44B	436.68B	399.90B	381.99B	336.94B	315.24B
	Stockholders Equity
26.39B	25.55B	23.68B	21.74B	18.85B	16.38B
Cash Flow		Free Cash Flow
2.20B	3.95B	4.51B	-2.59B	5.55B	19.47B
	Operating Cash Flow
2.74B	4.65B	5.17B	-1.92B	6.11B	19.98B
	Investing Cash Flow
-22.17B	-7.34B	-80.00M	-1.46B	1.39B	-3.35B
	Financing Cash Flow
24.53B	-1.10B	19.51B	-381.00M	23.32B	25.08B

National Bank of Canada Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 110.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NA, the sentiment is Negative. The current price of 110.64 is below the 20-day moving average (MA) of 116.67, below the 50-day MA of 120.16, and below the 200-day MA of 122.43, indicating a bearish trend. The MACD of -0.72 indicates Negative momentum. The RSI at 49.25 is Neutral, neither overbought nor oversold. The STOCH value of 44.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:NA.

National Bank of Canada Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RY	81 Outperform	$222.93B	12.83	14.39%	3.79%	11.51%	14.79%
TD	76 Outperform	$142.24B	17.21	7.68%	5.35%	11.78%	-25.44%
CM	75 Outperform	$75.82B	10.44	13.23%	4.87%	10.79%	18.20%
BMO	71 Outperform	$92.58B	11.95	10.01%	5.11%	10.57%	50.35%
BNS	68 Neutral	$82.88B	13.14	8.34%	6.91%	3.72%	-17.99%
NA	64 Neutral	$44.19B	10.29	15.64%	4.09%	17.13%	14.73%
Sector *	63 Neutral	$12.88B	9.21	9.18%	4.78%	16.30%	-8.66%

National Bank of Canada Corporate Events

National Bank of Canada Reports Strong Q1 2025 Results and Strategic Acquisition

National Bank of Canada reported an 8% increase in net income for the first quarter of 2025, reaching $997 million, driven by revenue growth across all business segments. The recent acquisition of Canadian Western Bank is expected to accelerate domestic growth and enhance the bank’s capabilities, despite challenges posed by macroeconomic and geopolitical uncertainties.

National Bank Completes CWB Tier 1 Capital Reorganization

National Bank of Canada and Canadian Western Bank have completed a reorganization of CWB’s Tier 1 capital, resulting in the exchange of CWB’s First Preferred Shares for new National Bank First Preferred Shares. This strategic move will culminate in an amalgamation of the two banks under the National Bank of Canada name, which is expected to enhance operational efficiencies and strengthen the combined entity’s market position.

National Bank Strengthens National Presence with CWB Acquisition

National Bank of Canada has completed its acquisition of Canadian Western Bank, a move that enhances its banking capabilities across Canada. The transaction, valued at $5.6 billion, was executed via a share exchange, and will see the integration of CWB’s clients and employees into National Bank’s operations, further solidifying its position in the national market.

National Bank of Canada Expands Board, CWB CEO Retires

National Bank of Canada has announced the appointment of two nominees from Canadian Western Bank to its Board of Directors following the acquisition of CWB. Additionally, Chris Fowler, the retiring President and CEO of CWB, will transition to an Executive Advisor role before his retirement, marking a significant leadership change and integration step for the National Bank, potentially impacting its strategy and operations in Western Canada.