In a significant move, Jefferies analyst John Aiken has revised his recommendation for National Bank of Canada (NTIOF, Financial), downgrading it from Buy to Hold. This shift comes with a lowered price target of C$126, previously set at C$147. Jefferies has adjusted its financial sector outlook, projecting a resumption of growth in 2026, following a reset view for 2025.
The firm highlights ongoing risks, particularly with unresolved tariff issues. While Canadian financials have typically shown resilience during economic downturns, current domestic factors such as election outcomes and the potential for negotiations contribute to a lack of certainty. According to Aiken, despite some risks already being reflected in current valuations, the assessment of these risks is ongoing and incomplete.
In addition to National Bank of Canada, Jefferies also adjusted its outlook on CIBC, reflecting broader caution regarding the Canadian financial landscape. The firm emphasizes that while certain challenges may have been anticipated, the full extent of potential impacts has yet to be realized.
