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Analyst Actions: RBC Downgraded, CIBC Paused, and EQB Faces Volatility
This roundup highlights key analyst moves affecting Royal Bank of Canada (RBC), Canadian Imperial Bank of Commerce (CIBC), EQB Inc., and BRP Inc.
Royal Bank of canada (RY-T): Downgraded on Dimmed Outlook
National Bank Financial analyst Gabriel Dechaine lowered his rating on RBC from “outperform” to “sector perform,” citing a “dimmed” outlook that doesn’t align with the bank’s current valuation.He reduced his target price to $177 from $179, based on a 12.7 times multiple on 2026 estimates. The downgrade reflects concerns about higher provisions for credit losses (PCLs) and weaker loan growth.
RBC’s shares fell 3.5% on Thursday after the bank announced it was setting aside more money for potential loan losses due to increased uncertainty in the U.S. economy. While RBC’s in-quarter credit performance sent “mixed signals,” Dechaine noted management’s shift in the “peak PCLs” timeline to fiscal 2026, marking the third such delay in three years. he also pointed to underperformance in RBC’s Capital Markets division.
however, Scotia Capital’s Mike Rizvanovic remains more optimistic, maintaining a “sector outperform” rating but reducing his target to $186 from $188. He believes the market overreacted to RBC’s earnings miss, emphasizing the bank’s manageable credit losses, strong domestic positioning, and potential synergies from the HSBC canada acquisition.Canadian Imperial Bank of Commerce (CM-T): Time for a “Pause”
Despite a “good” quarter for CIBC, Gabriel Dechaine also downgraded the bank to “sector perform” from “outperform,” suggesting it’s “time to take a pause.” While increasing estimates to reflect stronger net interest income (NII) growth, particularly in Canadian personal and commercial banking, he remains wary of the domestic credit and growth outlook, which disproportionately impacts CIBC. His target price increased to $98 from $95.
CIBC shares closed down 0.3% on Thursday despite reporting strong Canadian banking results.Dechaine highlighted the bank’s impressive pre-tax, pre-provision (PTPP) growth and another quarter of loan losses below guidance.Other analysts remain bullish on CIBC:
RBC’s Darko Mihelic increased his target to $116 from $108, maintaining an “outperform” rating, citing strong results across segments and decreasing gross impaired loan (GIL) formations.
Desjardins Securities’ Doug Young raised his target to $100 from $96 with a “buy” rating, praising the bank’s encouraging messaging around net interest margins (NIMs), expenses, credit, and buybacks.
* Scotia’s Mike Rizvanovic increased his target to $101 from $98 with a “sector outperform” rating, noting the market’s muted reaction to CIBC’s strong results and constructive forward guidance.
EQB Inc. (EQB-T): Volatility Expected Amid Credit Concerns
RBC Dominion Securities analyst Darko Mihelic predicts short-term volatility for EQB shares, titling his note “Even in the penalty box we see value here.” The bank’s shares dropped 7.4% on thursday after reporting lower-than-expected earnings per share, primarily due to higher-than-anticipated provisions for credit losses (PCLs).
Mihelic expressed concern that credit issues might potentially be becoming more systemic,reducing his 2025 and 2026 EPS estimates and lowering his target price to $124 from $147.He maintains an “outperform” rating,acknowledging the expected volatility but emphasizing the long-term growth story.
Desjardins Securities’ Doug Young also cut his target to $110 from $120, keeping a “buy” rating, noting that patience is required.BRP Inc. (DOO-T): upgraded on improved Outlook
Stifel analyst Martin Landry upgraded his recommendation for BRP Inc. to “buy” from “hold,” citing “an improved outlook.” Shares of the recreational vehicle manufacturer soared 12.7% following the release of its quarterly report, which included a revised full-year financial outlook hinting at a return to growth.
Landry noted that BRP’s inventory depletion is near completion and that the risk of tariffs being a structural issue has abated significantly. He emphasized that the upgrade is not predicated on demand improving yet.
