Canadian Western Bank "buy," target price reduced

06/06/08 - Desjardins Securities

NEW YORK, June 6 (newratings.com) - Analysts at Desjardins Securities maintain their "buy" rating on Canadian Western Bank (CWB), while reducing their estimates for the company. The target price has been reduced from C$35 to C$34.

In a research note published this morning, the analysts mention that the company has posted its F2Q08 EPS short of the estimates and the consensus mainly on account of lower-than-expected net interest margins due to spread compression. The analysts add, however, that Canadian Western Bank’s asset quality continues to be robust and the company’s spread is likely to move towards more normalized levels in the current quarter. The EPS estimates for FY08 and FY09 have been reduced from C$1.75 to C$1.65 and from C$2.05 to C$2.00, respectively.