Tuesday, January 08, 2008

Blackmont Cuts Bank P/E Targets

  
Financial Post, 08 January 2008, David Pett

The ongoing uncertainty swirling around financial stocks has prompted Blackmont Capital analyst Brad Smith to revisit the median price earnings ratio he expects Canadian banking stocks to trade at this year.

Citing the "rising uncertainty with respect to both the near- and longer-term impact that ongoing global credit market dislocations may have on future bank earnings," Mr. Smith cut his median P/E prediction for Canadian banks to 10 times earnings compared with 12 times previously.

The downward adjustments mean his median twelve-month projected upside for banking stocks swoons from 31% to 12%.

He keeps his BUY recommendations on Bank of Nova Scotia, Royal Bank and Bank of Montreal while lowering his target prices for National Bank and CIBC, on which he has a "hold" and "sell," respectively.

• BMO target price cut from $72 to $63
• TD Bank target price cut from $77 to $68
;