National Bank Financial Tunes Up Earnings Outlook for Canada's Big Banks
Canadian bank fundamentals remain resilient, National Bank Financial says in its latest update. The analyst maintains a positive but increasingly selective outlook for Canada's major banks as they approach another earnings season.
Royal Bank of Canada (RY:CA) and Toronto-Dominion Bank (TD:CA) retain their Outperform ratings with 12-month price targets of $318.00 and $190.00, respectively. Meanwhile, National Bank Financial has downgraded its rating on Bank of Montreal (BMO:CA), Bank of Nova Scotia (BNS:CA), and Canadian Imperial Bank of Commerce (CM:CA) to Sector Perform, with corresponding 12-month price targets of $278.00, $128.00, and $180.00 per share.
The analyst views Royal Bank of Canada as its highest-conviction large-bank idea due to the bank's scale, diversified earnings base, and leadership across Canadian banking, wealth management, and capital markets. Toronto-Dominion Bank also retains an Outperform rating with a $190 target, thanks to its North American franchise and capital-markets exposure.
The updates reflect a positive outlook for Canadian banking fundamentals but acknowledge that elevated valuations leave less room for disappointment. With Canadian bank shares having outperformed the broader TSX in 2026, investors may increasingly differentiate between banks based on earnings momentum, franchise strength, and ability to sustain returns.