Friday, April 20, 2007

UBS Raises Scotiabank's Price Target to $61

Financial Post, Jonathan Ratner, 20 April 2007

Bank of Nova Scotia’s international push has been marked by nearly a dozen deals in the past year, with the most recent investments coming in China and Thailand.

The bank’s move to put its excess capital to work at attractive returns, could lead to a healthy boost for earnings in 2007 and 2008, according to UBS analyst Jason Bilodeau.

He has a “buy” rating on Scotiabank shares and raised his price target to $61 from $58, representing upside of roughly 13%.

Mr. Bilodeau expects the bank will continue to make acquisitions and/or use some of its excess capital to hike its dividend or repurchase shares.

While he doesn’t think Scotiabank will be the strongest among its peers, the company’s first quarter results seemed to demonstrate that its domestic operations were in good shape.

“However, good flows on the wealth management front and the recent addition of a strong senior portfolio team (from RBC) in its mutual fund operations suggest the business is gaining some momentum,” Mr. Bilodeau added in a note to clients.