Stocks

Bank of Nova Scotia (NYSE:BNS) Upgraded to 'Buy' at TD Securities

Published November 7, 2024

On November 7, 2024, TD Securities made a significant move by upgrading the shares of Bank of Nova Scotia (NYSE:BNS) from a previous hold rating to a buy rating. This announcement was included in a research report that surfaced on Monday morning, highlighting growing confidence in the bank's stock.

In a similar vein, CIBC World Markets also adjusted its stance on Bank of Nova Scotia on September 20, moving it from a "hold" rating to a "strong-buy" rating. Currently, the stock has a mixed reception among analysts; two have rated it as a sell, three have assigned a hold rating, while one analyst has indicated a buy and another a strong buy. According to data collected by MarketBeat, the consensus rating for Bank of Nova Scotia’s stock is an average of "Hold" with a target price set at $69.00.

Stock Performance Overview

As of Monday, Bank of Nova Scotia's stock was trading at $53.24. The stock's performance has seen it fluctuate between a 12-month low of $41.80 and a high of $55.12. The company has maintained a 50-day moving average of $52.44 and a 200-day moving average of $48.74. With a market capitalization of $65.88 billion, the bank has a price-to-earnings (P/E) ratio of 12.74 and a price-to-earnings-growth (PEG) ratio of 1.54. Its current ratio stands at 1.02, and the debt-to-equity ratio is 0.61.

Recent Earnings Report

In its latest quarterly earnings report released on August 27, Bank of Nova Scotia announced earnings per share (EPS) of $1.63, slightly exceeding analysts' expectations of $1.62 by $0.01. The bank reported a total revenue of $8.36 billion for the quarter, which was below the consensus estimate of $8.53 billion. Notably, the bank’s net margin was recorded at 9.84%, along with a return on equity of 11.14%. This represented a 3.7% increase in revenue compared to the same quarter last year when it had posted $1.30 EPS. Looking forward, sell-side analysts are forecasting an EPS of 4.8 for the current fiscal year.

Dividend Update

Recently, Bank of Nova Scotia announced its quarterly dividend, which was paid on October 29. Shareholders recorded on October 2 received a dividend payout of $0.768 per share, equating to an annualized dividend of $3.07 and a dividend yield of 5.77%. It is important to note that the ex-dividend date for this payout was also October 2, and the company's dividend payout ratio (DPR) has been reported at 74.88%.

Institutional Investment Activity

Bank of Nova Scotia has witnessed substantial activities from institutional investors and hedge funds recently. For instance, Rathbones Group PLC increased its stake in the bank by 11.8% in the second quarter, expanding its holdings to 136,337 shares, valued at approximately $6.24 million. Similarly, the British Columbia Investment Management Corp. raised its stake a whopping 2,455.8%, acquiring 1,521,906 shares worth about $69.63 million. Intact Investment Management Inc. also expanded its position by 48.3%, holding 1,563,594 shares valued around $85.20 million. Meanwhile, Mackenzie Financial Corp. increased its shareholding by 4.7%, now holding over 15 million shares worth roughly $690.43 million. Pathway Financial Advisers LLC significantly boosted its investment by 5,380.9%, adding nearly 3.9 million shares in the third quarter, making its total holding valued at $216.45 million. Notably, institutional investors collectively own about 49.13% of the bank’s stock.

Company Overview

The Bank of Nova Scotia is a prominent financial institution offering a diverse range of banking products and services across Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean, and Central America. Its operations span several segments including Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets.

Banking, Stocks, Investment