Tuesday’s analyst upgrades and downgrades

Inside the Market’s roundup of some of today’s key analyst actionsFollowing Friday’s release of better-than-anticipated third-quarter financial results, Credit Suisse analyst Joo Ho Kim raised his forecast for Canadian Western Bank (CWB-T), pointing to improved net interest margins.Shares of the Edmonton-based bank surged 11.5 per cent after it reported core cash earnings per share of 88 cents, blowing past both Mr. Kim’s 83-cent estimate and the consensus projection on the Street of 82 cents. A “strong” net interest income performance drove a “better” revenue performance, while lower provisions for credit losses also contributed to the beat.“In light of the industry-wide slowdown in loan growth (including domestic commercial loans), improved net interest margin performance was a key positive featured in CWB’s Q3 results (especially given the bank’s relative over-indexing to NII),” said Mr. Kim. “While we assume a modest increase in our Q4 NIMs (especially vs. quarter-over-quarter growth of 11 basis points this quarter), our NIMs in our fiscal 2024 estimate also go up meaningfully as a result of a better outlook for more stable funding in particular. “Other positives from Q3 included better-than-expected credit performance and continued strength in the near-term guidance (within 18-23 basis points in the PCLs ratio for next quarter; our estimates assume 20 basis points in Q4 and 24 basis points in F2024), as well as strong efficiency ratio guidance of approximately 52 per cent for the current year (was 54 per cent year-to-date, and therefore implies a solid step-down in Q4).”The analyst raised his 2023 EPS projection by 3 per cent to $3.56 (from $3.45 previously), pointing to “the impact of the beat and better NIMs.” His 2024 estimate rose by 2 per cent “to ref …

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