
Analyst Ratings Heat Up: What You Need to Know!
2025-05-28
Author: Jacob
Key Analyst Moves You Can't Ignore!
The financial arena is buzzing today with hot analyst upgrades and downgrades, particularly for Bank of Nova Scotia (BNS-T). TD Cowen's Mario Mendonca is feeling optimistic despite the bank's second-quarter earnings coming in below expectations.
Mendonca highlighted the bank's share buyback and dividend increase, pointing to stabilizing credit as a strong indicator for future earnings growth in 2026. He stated, The resumption of wholesale and international loan growth early in 2026 will be crucial, and we maintain our BUY rating supported by a favorable valuation and improved momentum.
Performance Review and Predictions
After releasing its quarterly report, Scotiabank shares saw a 1.6% jump conversely to the somewhat disappointing adjusted earnings per share of $1.52, which fell short of Mendonca's $1.55 estimate. The bank's pre-tax earnings climbed 10% but did not meet expectations due to rising expenses and declining fee income.
However, notable aspects from the earnings report included a better-than-expected drop in provisions for credit losses and an improved capital ratio, convincing Mendonca to raise his EPS projection for 2026 to $7.35, prompting a target price shift from $76 to $79.
What Analysts Are Saying!
Analysts from National Bank and Canaccord Genuity also adjusted their target prices slightly upwards, while Jefferies maintained a hold rating. Both highlighted improved credit outlooks and strong capital markets revenues as positive signifiers.
Gabriel Dechaine from National Bank noted, BNS’s low PCL ratio is a favorable sign amid the uncertainty. Meanwhile, Canaccord's Matthew Lee praised improvements in BNS's international segment.
Gildan Activewear: A Mixed Bag of Optimism
On a different front, Scotia Capital's John Zamparo believes Gildan Activewear Inc. (GIL-N, GIL-T) is well-positioned, despite tougher industry conditions. He pointed out Gildan's low-cost structure and robust supply chain as key advantages.
Zamparo recently resumed coverage with a sector outperform recommendation, predicting challenges in 2025 but highlighting that Gildan’s stock, despite recent declines, maintains strong defensive characteristics.
Insights on Future Deals
In another report, Zamparo indicated that institutional investors prefer Alimentation Couche-Tard Inc. (ATD-T) to pursue a targeted acquisition of U.S. assets over taking over the entire Seven & i Holdings. He noted a U.S.-only deal could earn 15% EPS accretion, and discussed upcoming challenges for Couche-Tard amidst a backdrop of tightening profit margins and low consumer sentiment.
Looking Ahead: What to Expect!
As Q2 earnings reports unfold, analysts are keeping a close watch on various sectors, projecting cautious optimism for companies like Transat A.T. Inc. (TRZ-T) and Atlas Engineered Products Ltd. (AEP-X). With reports of strengthening financial performance on the horizon, now is an exciting time for investors to engage.
Make sure to stay updated on these developments as analysts navigate the shifting tides of the market!