Morningstar

Bank of Nova Scotia Earnings: Expenses Outgrowing Revenue, Second Half of Year Will Be Better

""
Securities In This Article
Bank of Nova Scotia
(BNS)

Narrow-moat-rated Bank of Nova Scotia BNS reported OK fiscal second-quarter results. Expenses kept increasing at a healthy rate, outgrowing revenue in the quarter, however, management struck a positive tone in the call, suggesting this pattern may begin to reverse for the rest of the year. Expenses came in a bit ahead of our previous expectations, and as we adjust our forecasts we anticipate a mid-single-digit percentage decline in our current fair value estimates of CAD 75/USD 55. It remains difficult to predict the bank’s future expense levels as we await an updated strategy, which could result in additional repositioning charges.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

More in Stocks

Consumer Defensives: Despite Angst, Thirsty Investors Have Names to Pursue

Estee Lauder, Kraft Heinz, and Dollar General are our top consumer defensive stocks.
Erin Lash, CFA

Industrials: Many Stocks Overvalued After Q3 Outperformance

Our top stocks in this sector are Chart Industries, Wesco, and CNH Industrial.
Brian Bernard, CFA, CPA

Basic Materials: Despite Index Rise, We See Multiple Long-Term Opportunities

In this sector, our favored stocks are Albemarle, Dow, and FMC.
Andrew Bischof, CFA and Travis Miller

About the Author

Eric Compton, CFA

Sector Director
More from Author

Eric Compton, CFA, is a sector director, AM Technology, for Morningstar*. He covers a variety of hardware and software related technology names across several industries while overseeing the technology team.

Before joining Morningstar in 2015, Compton was a business analyst for ESIS, a global provider of risk management products and a subsidiary of ACE Group. Before becoming technology sector director in late 2023, he was an equities strategist and covered the U.S. and Canadian banking sectors. Eric joined Morningstar in 2015 as an associate on the financials team, covering banks for eight years before transitioning to the technology team.

Compton holds a bachelor's degree in applied health science from Wheaton College and a master’s degree in business administration, with high honors, from University of Chicago’s Booth School of Business. He also holds the Chartered Financial Analyst® designation.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

Sponsor Center