National Bank of Canada Earnings: Strong Fee Revenue and Positive Operating Leverage

Narrow-moat National Bank of Canada reported decent fiscal third-quarter results. Net revenue increased 19% year over year and 9% from last quarter to CAD 3.0 billion. The bank continued to deliver positive operating leverage in the quarter, as expenses increased 9% year over year. Adjusted net income increased 23% from last year to CAD 960 million. Credit provisioning increased by 8% to CAD 149 million sequentially. We incorporate these results and increase our fair value estimate to CAD 109 per share from CAD 107 due to earnings since our last update. We see the shares as moderately overvalued, and some of the bank's larger Canadian peers present more attractive opportunities.