BMO Expects Canadian Banks To Outperform In 2021

In a note sent out to investors on January 3rd, BMO Capital Markets headlines “Bank Index Underperforms Again in 2020; History Suggests Outperformance in 2021.”

Sohrab Movahedi, BMO Capital Markets Canadian bank analyst, predicts that the basket of Canadian banks will outperform in 2021 after lagging behind the S&P and TSX for the second consecutive year. The Canadian bank index ended up 3.6% in 2020, while the median total return of 45 bank stocks was roughly -12%.

Movahedi writes, “since 1970, there have been three instances when the bank index underperformed the composite in consecutive years, and in each case, the banks outperformed the following year by an average of 780 bps.”

Movahedi believes this could be achieved through a multitude of paths such as earnings growth, dividend yield, and some multiple expansions and specifically identifies Bank of Nova Scotia and CIBC as the top winners. Movahedi adds that for investors who like to take the contrarian approach, they should be looking at the Canadian banks. Specifically, Bank of Nova Scotia, BMO, and National Bank of Canada over TD, Royal Bank, and CIBC.

Among the big six, CIBC was the best performer with a 7% return throughout the last year. On the flip side Laurentian was the worst performer for 2020, with a decline of 25.2%.


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

2026 Could Be Gold’s Biggest Year Yet!? | Ryan King – Equinox Gold

Gold Is Screaming Higher While Currencies Burn | Simon Ridgway – Rackla Metals

We Have the Highest-Grade Antimony Deposit in North America!? | Jim Atkinson -Antimony Resources

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Beyond Meat Sees Analysts Slash Price Targets

Beyond Meat, Inc. (Nasdaq: BYND) recently reported its third quarter results for the period ending...

Sunday, November 20, 2022, 11:12:00 AM

Equinox Gold: The Analyst First Impression Of The Premier Gold Mines Transaction

Earlier this week, Equinox Gold Corp (TSX: EQX) announced the acquisition of Premier Gold Mines...

Saturday, December 19, 2020, 01:39:00 PM

Canaccord: “Gold’s Ready For Liftoff”

On Monday, Canaccord put out a precious metals industry update, saying, “The war in Ukraine...

Wednesday, March 9, 2022, 05:08:00 PM

Teladoc Health: Numerous Analysts Raise Price Targets Following Q3 Earnings

Yesterday, Teladoc Health (NYSE: TDOC) reported its third quarter earnings results, reporting $228.8 million in...

Saturday, October 31, 2020, 02:02:00 PM

Raymond James: Cronos Financials A “Relative Non-Event”

On February 26th, Cronos Group (TSX: CRON) (NASDAQ: CRON) reported fourth quarter and full year...

Sunday, February 28, 2021, 01:40:00 PM