Skip to main content

Market Overview

BofA Upgrades Bank of Montreal, Downgrades Royal Bank of Canada

Share:
BofA Upgrades Bank of Montreal, Downgrades Royal Bank of Canada

Canadian banks reported upbeat earnings for their fiscal first quarter, while the stricter lockdowns in recent months did not alter their credit outlooks, according to BofA Securities.

The Canadian Banks Analyst: Brandon Nispel upgraded the rating for Bank of Montreal (NYSE: BMO) from Neutral to Buy, while raising the price target from $120 to $125. The analyst also downgraded the rating for Royal Bank of Canada (NYSE: RY) from Buy to Neutral, while keeping the price target unchanged at $125.

The Canadian Banks Thesis: Canadian banks are “heading into a period of increasing capital return (mid-2021), strengthening customer activity and rising interest rates that should alleviate the pressure on margins while boosting stock valuations,” Nispel said in the note.

Referring to Bank of Montreal, the analyst wrote, “We believe that CEO Darryl White’s focus on delivering positive operating leverage while optimizing the ROE profile of the franchise should lead to above average growth. In the U.S. BMO is in a sweet spot to take advantage of the scale benefits that come from having a nearly $1 (CAD) trillion balance sheet, while being small enough where it should continue to see market share opportunities.”

He added that Royal Bank of Canada’s stock had underperformed significantly during the post-vaccine rally and there were “no clear catalysts in recent months” to drive upside.

(Photo by Ryan on Unsplash)

 

Related Articles (BMO + RY)

View Comments and Join the Discussion!

Posted-In: banking BofA Securities Brandon NispelAnalyst Color Upgrades Downgrades Price Target Analyst Ratings

Latest Ratings

StockFirmActionPT
PEGKeybancMaintains65.0
QSRNorthcoast ResearchInitiates Coverage On
DQGLJ ResearchInitiates Coverage On22.1
TCMaxim GroupDowngrades
GLNGB of A SecuritiesDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com