Q: Hello, I have been a long term holder of BNS, as its constantly recommended by analysts. However, its been a constant lagger and doesn't seem to get its act together. What is that analysts see in this stock to recommend it?
Is it time to let it go?
Thank you
Carlo
Is it time to let it go?
Thank you
Carlo
5i Research Answer:
Historically, the lagging bank has been the one to buy, and this has proven to be a popular investment thesis. However, it has clearly not yet worked for BNS. The bank has a relatively new CEO. He has made some moves but has not really made his mark yet. The stock is very cheap vs peers and offers a solid 6.0% dividend. It is up 21% in the past year. Higher loan losses, Latin American concerns and economic weakness are concerns, but we think also priced in. It has been frustrating. We have also recommended it. But we think it is still a HOLD. TD has recovered very strongly from its 2024 issues, and there is potential for BNS to see improvement as well.