The Globe and Mail reports in its Wednesday, June 9, edition that Barclays analyst John Aiken sees the Canadian economy poised for "a period of multiyear expansion that sets up well for the financial services companies." The Globe's David Leeder writes that Mr. Aiken says in a note: "As Canada's roll-out of the COVID vaccines has sped up (56 per cent of the population with a first dose and 6 per cent fully vaccinated), the outlook for the Canadian economy has improved dramatically since last quarter. Further, government support programs and low interest rates signal that credit losses are unlikely to be as significant as first believed." Accordingly, Mr. Aiken boosted his share target for Bank of Montreal to $126 from $125, while maintaining his recommendation at "underweight." Mr. Aiken adds: "Resiliency of the banks' earnings should continue, as an improved outlook may still bring forth further releases. And, while the banks continue to prudently manage expenses, as economies begin to reopen, and consumer and business sentiment improves, stronger growth over the second half of the year could help generate stronger top line growth." He expects bank tailwinds to moderate in the last half of the year.
© 2021 Canjex Publishing Ltd. All rights reserved.