Laurentian Bank (TSX:LB) is a regional bank that operates in the province of Quebec. It is one of the three Canadian banks that famed short-seller Steve Eisman claimed he was targeting in a recent interview.
Laurentian has encountered challenges due to mortgage underwriting issues and a cooling housing market.
Shares of Laurentian rose 1.44% on May 24. The stock is still up 9.4% in 2019 even after a sharp post-earnings dip in late February. It will hope to bounce back as it plans to release its second quarter 2019 results on May 30.
The bank had a tough first quarter largely due to lower capital market revenue. This was a trend that was apparent across the big banks as well. Recent earnings from the top banks have illustrated improved market conditions. Investors should expect improvement in this area for Laurentian.
Laurentian Bank still left the quarter in a very good financial position.
The bank has an industry low loans loss provision. Capital Markets were a drag in Q1, but net income was primarily down due to lower loan volumes and higher funding costs. Quebec has bucked the trend with its robust housing market, but recent data shows that cooling has made its way to the province.
This headwind could complicate Laurentian Bank’s growth going forward.
The stock was trading at the mid-to-low end of its 52-week range as of close on May 24. Shares had an RSI of 53 as of this writing, which puts the stock in neutral territory. However, its forward P/E of 9 makes it an above average value play relative to industry competitors.
