Bank Nova Scotia Halifax may be undervalued with poor growth indicators, but the 5 analysts following the company give it an rating of hold. Their target prices range from $51.97 to $65.36 per share, for an average of $56.58. At today's price of $48.86, Bank Nova Scotia Halifax is trading -13.64% away from its average target price, suggesting there is an analyst consensus of some upside potential for the stock.
The Bank of Nova Scotia provides various banking products and services in Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, and internationally. Based in Toronto, Canada, the large-cap Finance company has 91,264 full time employees. Bank Nova Scotia Halifax has offered a 8.1% dividend yield over the last 12 months.
Bank Nova Scotia Halifax has a trailing twelve month P/E ratio of 9.2, compared to an average of 14.34 for the Finance sector. Based on its EPS guidance of 6.01, the company has a forward P/E ratio of 8.1.
The average compound growth rate of the company's historical and projected earnings per share is -2.1%. On this basis, the company's PEG ratio is -4.47, which indicates that its shares are overpriced.
On the other hand, the market is potentially undervaluing Bank Nova Scotia Halifax in terms of its book value because its P/B ratio is 0.79. In comparison, the sector average P/B ratio is 1.57. The company's shares are currently -47.7% below their Graham number, indicating that its shares have a margin of safety.
Why would analysts be giving such an undervalued stock a bad rating? It's possible that analysts are looking beyond common valuation metrics and taking into account the company's potentially irresponsible use of debt to operate its business. Bank Nova Scotia Halifax Pfd 3's negative EPS growth rate of -5.6% is another drawback.
| 2019-10-31 | 2020-10-31 | 2021-10-31 | 2022-10-31 | |
|---|---|---|---|---|
| Revenue (MM) | $30,236 | $31,292 | $30,913 | $31,148 |
| Interest Income | $17,177,000 | $17,320,000 | $16,961,000 | $18,115,000 |
| Net Margins | 27.75% | 21.66% | 31.13% | 31.84% |
| Net Income (MM) | $8,390 | $6,778 | $9,624 | $9,916 |
| Depreciation & Amort. | -$1,053,000 | -$1,546,000 | -$1,511,000 | -$1,531,000 |
| Earnings Per Share | $6.68 | $5.3 | $7.7 | $5.31 |
| EPS Growth | n/a | -20.66% | 45.28% | -31.04% |
| Diluted Shares (MM) | 1,251 | 1,243 | 1,225 | 1,192 |
| Free Cash Flow (MM) | -$12,211 | $55,893 | -$13,269 | $16,372 |
| Capital Expenditures (MM) | -$186 | -$771 | -$462 | -$571 |
| Long Term Debt | $19,487,000 | $7,405,000 | $158,269,000 | $177,426,000 |
| Net Debt / EBITDA | 2.97 | -0.43 | 5.04 | 7.48 |
