National Bank Financial Keeps RBC and TD in Favor, Cuts Some Canadian Banks

National Bank Financial has updated its coverage on Canada's major banks, maintaining a positive but increasingly selective outlook as the sector approaches another earnings season. The analyst continues to rate Royal Bank of Canada (RY:CA) and Toronto-Dominion Bank (TD:CA) with an Outperform rating, with 12-month price targets of $318.00 and $190.00 respectively.

Meanwhile, Bank of Montreal (BMO:CA), Bank of Nova Scotia (BNS:CA), and Canadian Imperial Bank of Commerce (CM:CA) are maintained at Sector Perform rating, with 12-month price targets of $278.00, $128.00, and $180.00 per share.

The selective positioning is notable given that Canadian bank fundamentals remain broadly resilient, with strong capital-markets activity, wealth-management revenue, and relatively contained credit losses supporting earnings expectations. The sector's strong share-price performance has also pushed valuations above historical averages.