On Monday, BMO Capital maintained its Market Perform rating and Cdn$33.00 stock price target for Laurentian Bank of Canada (LB:CN) (OTC: LRCDF). The bank's second-quarter adjusted cash earnings per share (EPS) of $0.90 exceeded both the analyst's estimate of $0.82 and the consensus estimate of $0.89. This performance was attributed to increased fee income and more effective expense management.
Laurentian Bank's provision for credit losses (PCL) was reported at 20 basis points, aligning with expectations. Additionally, the bank showed a quarter-over-quarter increase in its Common Equity Tier 1 (CET1) ratio, which is a key measure of financial stability, rising by 20 basis points to reach 10.4%.
During its recent Investor Day, Laurentian Bank presented a clearer view of its medium-term financial goals. The bank aims to reach a double-digit return on equity (ROE) by focusing on revenue growth, especially in the commercial banking sector, and by continuing to improve its expense management strategies.
Despite the positive quarterly results and the outlined growth ambitions, BMO Capital has decided to keep its rating and target price for Laurentian Bank unchanged. The firm's attention is now turned towards the bank's implementation of these strategies and its performance in the upcoming periods.
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