The Globe and Mail reports in its Thursday, Feb. 28, edition that CIBC World Markets analyst Robert Sedran
says headwinds to growth for Bank of
Nova Scotia ($72.72) are emerging after weaker-than-expected first quarter financial results. The Globe's David Leeder writes that accordingly, Mr. Sedran downgraded the stock to "neutral" from "outperform." Mr. Sedran trimmed his share target by $5 to $81. Analysts on average target the shares at $80.82. On Tuesday, Scotiabank reported adjusted earnings per share of $1.75, missing the $1.82 projection of both Mr. Sedran and the Street. The miss came largely from higher expenses and loan losses. Mr. Sedran says in a note: "Our 'outperformer' rating had been based on our expectation that continued strong performance from international banking, an improved outlook for Canadian banking and better performance from global banking and markets would drive strong organic growth in 2019 that would be complemented by synergies from the many acquisitions in 2020. This may yet prove to be the right call, but after the third consecutive miss against estimates, a year-over-year decline in Canadian banking earnings, ... our conviction in this call has been shaken."
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