The Globe and Mail reports in its Tuesday, Nov. 8, edition that while Desjardins Securities analyst Doug Young is enthusiastic about the coming fourth quarter earnings season for Canadian banks, he warns investors the market is not likely to "reward" stocks in the sector "due to the lingering economic uncertainties and concerns as we peer out over the next year." The Globe's David Leeder writes that in a research note released Monday titled Third verse same as the first..., Mr. Young added: "We'll be playing the same old song this quarter. The Canadian banks' 4Q FY22 earnings season kicks off with Scotiabank on Nov. 29. We think it could actually be a decent quarter for the group, with strong P&C banking results offsetting weakness in capital markets. Not dissimilar to what we saw in U.S. banks' 3Q22 results." While Mr. Young thinks macroeconomic concerns are already priced into bank stocks, he expects near-term valuation multiple expansion to be unlikely. He says, "The Big Six Canadian banks are all trading below their 20-year historical average P/BVPS multiples." He continues to rate Canadian Imperial Bank of Commerce "hold," cutting his share target to $70 from $73. Analysts on average target the shares at $74.84.
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