The Globe and Mail reports in its Tuesday, Feb. 10, edition that TD Cowen analyst Mario Mendonca notes that while Canadian bank stock valuations are near "peak levels" ahead of first quarter earnings, the sector's fundamentals remain strong. The Globe's David Leeder writes in the Eye On Equities column that Bank of Montreal is one of Mr. Mendonca's top picks. He says valuations remain "stretched," but he thinks most investors will not be concerned as long as fundamentals continue to flourish. Mr. Mendonca says in a note: "The ERP [equity risk premium] at 4.2 per cent is below average (6.6 per cent. A low ERP, given the uncertainty with the direction of Canada's economy, supports a cautious outlook on the sector. However, fundamentals remain strong, and until that changes, we believe elevated multiples can be sustained. While banks are not directly connected to the tech sector, a shift from tech to value stocks should favour P&C names and life insurers over banks. Recent performance and relative valuation support this call." Mr. Mendonca continues to rate Bank of Montreal "buy" Mr. Mendonca gave his share target a $10 boost to $219. Analysts on average target the shares at $188.60.