Snapshot
Raymond James has raised its price target on Bank of Nova Scotia stock (TSE:BNS) (NYSE:BNS) to Cdn$117.00 from Cdn$114.00 and maintained an Outperform rating.
Analyst rationale
The firm cited Scotiabank’s potential to expand return on equity relative to its peers, a view it ties to a set of execution and structural factors. Those drivers include ongoing improvements in funding and net interest margin (NIM), a program of strategic divestitures, growth in fee-based revenue streams, and disciplined expense management that supports positive operating leverage.
"We continue to view Scotiabank as offering greater ROE expansion potential relative to peers, supported by ongoing funding and NIM improvements, strategic divestitures, growth in fee-based revenue streams, and disciplined expense management supporting positive operating leverage."
Valuation and recent performance
Raymond James notes the stock trades at roughly a 1.5x P/E discount to peers, with a current price-to-earnings ratio of 18.22. Over the past year the shares have returned approximately 58% and trade near their 52-week high. An InvestingPro Fair Value assessment is referenced as indicating Scotiabank appears undervalued, and Raymond James expects the bank can narrow that valuation gap as it executes on its revised strategic plan.
Recent results
Scotiabank’s first-quarter 2026 results beat analyst expectations on both the bottom line and top line. The bank reported adjusted earnings per share of CAD 2.05, above the forecast of CAD 1.96, while revenue came in at CAD 10.08 billion versus an anticipated CAD 9.7 billion. Those outcomes are cited as evidence of the bank’s strong quarter-to-quarter performance.
Investor concerns
Despite the stronger-than-expected earnings and revenue figures, the report notes investor attention remains on rising credit loss provisions and elevated expenses. These items are flagged as points of scrutiny even as the overall results outpace market expectations.
Outlook
Raymond James retains its Outperform rating. The firm’s recommendation and higher target rest on the assumption that the bank will continue to make progress on the listed drivers of ROE expansion, narrowing its valuation gap versus peers as execution unfolds.
The analysis above synthesizes the analyst actions, valuation context and the bank’s reported quarter as presented by the firm and public results.