TORONTO, August 25, 2026, 11:35 EDT
- Shares of Scotiabank traded on the U.S. market climbed 4.92% to $91.13 during late-morning hours.
- Adjusted earnings surpassed consensus estimates by 8.6%, with adjusted ROE at 14.2%.
- The surge lifted the stock to a level 1.3% higher than the average price target set by analysts.
Shares of the Bank of Nova Scotia NYSE: BNS rose 4.92% on Tuesday following adjusted return on equity hitting 14.2%, surpassing the management’s medium-term target of 14% by 0.2 percentage point.
The move boosted the bank’s listed U.S. market value by about $5.2 billion. The stock also exceeded the average Wall Street target. Investors are valuing operating leverage in addition to earnings outperformance.
Adjusted earnings reached C$2.28 per share for the fiscal third quarter, topping analysts’ forecast of C$2.10, as per Reuters. The result, an 8.6% increase over expectations, was driven by higher fee income and gains across multiple segments.
Revenue climbed 11.1% to C$10.54 billion, while expenses were up 9.2% to C$5.56 billion. The company generated 1.9 percentage points of positive operating leverage.
| Q3 metric | 2026 | 2025 | Change |
|---|---|---|---|
| Adjusted net profit | C$2.97bn | C$2.52bn | +18.1% |
| Total revenues | C$10.54bn | C$9.49bn | +11.1% |
| Operating expenses | C$5.56bn | C$5.09bn | +9.2% |
| Adjusted return on equity | 14.2% | 12.4% | +1.8 pts |
| Allowance for credit losses | C$1.08bn | C$1.04bn | +3.7% |
Fee-based operations contributed more significantly. Non-interest income increased by 16.9%, while net interest income grew by 6.8%. Earnings from Global Banking and Markets climbed 37% to reach C$647 million.
Canadian Banking reported earnings of C$1.07 billion, a rise of 12%. Profit from Global Wealth Management increased by 23%, with assets under management growing to C$474 billion. International Banking saw an 8% increase.
Credit costs stayed high, though they moderated compared to the previous quarter. Provisions decreased by 11.3% quarter-on-quarter, but were up 3.7% from a year earlier. The common-equity Tier 1 ratio was steady at 13.1%.
Chief Executive Scott Thomson described it as “a record quarter for the Bank.” During the period, Scotiabank bought back 8.6 million shares. Total capital returned via dividends and share repurchases hit C$6.3 billion for the year to date. Scotiabank investor results
Scotiabank’s market reaction diverged from other major Canadian banks. Canadian Imperial Bank of Commerce NYSE: CM increased 1.81%, Toronto-Dominion Bank NYSE: TD advanced 1.49%, and Royal Bank of Canada NYSE: RY climbed 1.03%. Bank of Montreal NYSE: BMO edged down 0.33%.
| Analyst | Rating | Target | Upside/downside from $91.13 |
|---|---|---|---|
| KBW | Buy | $107 | +17.4% |
| CIBC | Hold | $98 | +7.5% |
| Barclays | Hold | $94 | +3.2% |
| National Bank | Hold | $92 | +1.0% |
| RBC Capital | Hold | $84 | -7.8% |
| Consensus average | Hold | $89.97 | -1.3% |
That gap in valuation is now significant. Shares of BNS were at $91.13 as of 11:35 EDT, exceeding analysts’ average target of $89.97. The stock’s trailing earnings multiple of 17.3 leaves limited space for any missteps.
The stock rose 4.92%, outperforming the peer group average by 3.92 points. Maintaining this advantage will depend on further improvements in operating leverage. Ongoing credit normalization remains necessary.
Risks: An uptick in loan losses would weigh on the earnings outlook. Fluctuations in currency values may affect returns in U.S. dollars. Analyst consensus suggests there is limited upside following Tuesday’s rally.
