Granted my recent assessment of BCE was
a little way off, even though I think “The Street” over reacted to the news…I’m still holding my shares.
On the other hand, I have been touting the Canadian Banks as great Dividend Growth stocks for quite a while now. According to the Globe and Mail, it looks like I have finally found someone who agrees with me.
Citigroup analysts, Shannon Cowherd has just released analysis on six Canadian banks rating three as buys and three as holds.
I wonder when my “consulting fee” will be arriving in the mail?
Here is the analysis:
Citigroup Global Markets Inc. has initiated coverage of the big six Canadian banks, rating three as â€œholdsâ€ and three as â€œbuys.â€
The three holds are Toronto-Dominion Bank, National Bank of Canada and Royal Bank of Canada and the three buys are Canadian Imperial Bank of Commerce, Bank of Nova Scotia and Bank of Montreal. The ratings vary significantly from consensus in some cases.
Citigroup analyst Shannon Cowherd gave CIBC a â€œbuy-high riskâ€ rating and a 12-month price target of $121. Ms. Cowherd said her rating reflects a view of the upside profit potential at CIBC, primarily driven by its cost-cutting initiative and the loan-loss coverage ratio. â€œWe recognize the stock is up 38 per cent in seven months but feel the story is not over yet,â€ she said. The shares are currently trading at $101.78 on the Toronto Stock Exchange.
With Scotiabank (buy-medium risk), she noted that the shares are trading at a premium to the group, based on the forward price/earnings multiple. â€œWe think this premium is warranted given the bank’s exposure to high-growth, albeit risky, markets and our estimated three-year CAGR [compound annual growth rate] of 6.6 per cent exceeds the group average,â€ Ms. Cowherd said. She expects Scotia shares, which are currently stand at $51.68, will rise over the next 12 months to $64.