By Ketki Saxena
Investing.com – The Bank of Nova Scotia (TSX:BNS) (NYSE:BNS) - operating under the name Scotiabank- is set to report first quarter 2022 earnings tomorrow morning before the opening bell. BNS is one of Canada’s "Big Six" banks, and has extensive operations in Canada and the U.S., as well as in Central and South America.
Over the past year, BNS has delivered 2.4% total price return to shareholders, and is currently trading at a P/E multiple of 11.8x. BNS also offers a substantial 4.36% dividend. While BNS has delivered relatively weaker returns than its counterparts (the rest of the big six Canadian banks) it offers the highest dividends.
Bank of Nova Scotia Benchmarks: Canadian Imperial Bank of Commerce (TSX:CM) (NYSE:CM), Royal Bank of Canada (TSX:RY) (NYSE:RY), Toronto Dominion Bank (TSX:TD) (NYSE:TD), Bank of Montreal ((TSX:BMO) (NYSE:BMO), National Bank of Canada (TSX:NA)
What to watch at Scotiabank earnings tomorrow
Q1 2022 EPS are estimated at C$2.05 on revenue of C$7.868 B, compared to EPS C$2.10 on revenue of C$7.687 B in the last quarter, and EPS C$1.88 on revenue of 8.072 B in the last quarter.
Investors should note that in the last quarter, BNS posted a whopping 10% surprise on earnings in the last quarter. It’s also worth noting that the 3 major Canadian banks which have already reported Q1 2022 so far this season have beaten analyst estimates ( CIBC , RBC, and National Bank of Canada).
Investor sentiment will also likely be affected by the bank’s press release earlier today, announcing a finalized agreement to acquire Grupo Said's remaining 16.8% stake in Scotiabank Chile, which will increase its ownership in the Chilean entity to 99.8%.
Bank of Nova Scotia Stock: Fair Value, Financial Upside
As of 3:00 p.m ET, Scotiabank shares were trading at C$ 91.37, down -0.31 (-0.34%) in the day’s trading, and with a 52-week range between C$74.62 - 94.98. Investing Pro models suggest a fair value target price of C$107.23, representing a financial upside potential of 17.5%.
What to watch for in Canada's Banking Sector
Forecasts for BNS, as well as the Canadian banking sector remain bullish. The main story to watch will be the eventual announcement of interest rate hikes by the Fed and the BoC, which should significantly widen interest rate margins and increase interest income for banks.
Factors to watch for Canada’s Big Six Bank Earnings: https://ca.investing.com/news/stock-market-news/canadas-big-six-banks-factors-to-watch-before-earnings-season-starts-2643849
Scotiabank is not the only major Canadian bank to report earnings tomorrow. The Bank of Montreal’s earnings call is also expected tomorrow morning before the opening bell. TD will be the last of the big six Canadian banks to report Q1 earnings, concluding the season on Thursday. CIBC, RBC, and the National Bank of Canada kicked off banks Q1 2022 earnings last week.