National Bank of Canada "underperform," target price reduced

03/12/08 - RBC Capital Markets

NEW YORK, March 12 (newratings.com) - Analysts at RBC Capital Markets maintain their "underperform" rating on National Bank of Canada (NBC), while reducing their estimates for the company. The 12-month target price has been reduced from C$51 to C$43.

In a research note published yesterday, the analysts mention that a failure of the Montreal Accord going forward might result in the company raising equity. In the event of the restructuring of the accord, National Bank of Canada is likely to incur additional charges associated with its ABCP holdings, assuming that the investment grade spreads remain at current levels, the analysts say. The EPS estimate for 2008 has been reduced from C$5.77 to C$4.54.