02:38 PM EDT, 05/30/2024 (MT Newswires) -- EQB reported Q2/24 adjusted EPS of $2.81 vs. NBF $2.71 and consensus $2.66.

EQB's better than expected Q2 2024 EPS was the result of top-line outperformance, notes National Bank. Results were highlighted by 10 bps of sequential NIM expansion (with some help from prepayment income).

Although the top-line performance was impressive, analyst Gabriel Dechaine says most bank investors are focusing on credit trends, which were a mixed bag. While there was a sequential decline in Gross Impaired Loans, after six consecutive quarters of increases, there was also a material amount of formations in the Equipment Finance book (i.e., GILs up 46% Q/Q), which contributed to loan losses exceeding both NBF and consensus forecasts by 30% and 10%, respectively.

The company has previously guided to improved credit performance in the second half. Reiteration of this outlook will be a key driver of the stock's near-term performance.

Maintain Sector Perform, $95 target.

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