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On Thursday, BMO Capital Markets updated its outlook on First National Financial Corp . (TSX:FN:CN) (OTC: FNLIF), increasing the price target to Cdn$42.00, up from the previous Cdn$41.00. The firm continues to hold a Market Perform rating on the company’s stock.
The adjustment by BMO Capital Markets comes with the anticipation that First National Financial will experience a resumption of earnings growth in 2025. The analyst from BMO Capital, Etienne Ricard, notes that this expected growth is supported by more accommodating monetary policies and an improving housing market transaction activity.
Ricard, however, cautions that the path to recovery may not be smooth, citing "significant uncertainty" stemming from recent macroeconomic and trade developments. These factors might postpone a more pronounced recovery in the company’s financial performance.
Despite these uncertainties, BMO Capital’s Market Perform rating reflects a belief that the stock presents a balanced risk-reward scenario. The valuation metrics are seen to be normalizing near their long-term averages. The new price target of Cdn$42 is based on a modest adjustment to earnings forecasts for 2026, which have been increased by 3%.
The target price set by BMO Capital Markets is derived from a multiple of 10.5 times earnings and a 6.0% dividend yield. According to Ricard, these figures align closely with the historical averages for First National Financial Corp.
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