National Bank: Should You Buy Before Earnings?

National Bank (TSX:NA) is the smallest of the Big Six Canadian bank stocks. However, it is a heavy hitter in its home province of Quebec. That makes it an interesting target for Canadian investors as we look ahead to the first batch of bank earnings in fiscal 2023.

Shares of this Quebec-based bank stock have dropped 1.9% year-over-year as of close on January 30. The bank stock has jumped 8.8% to kick off the New Year. There is still uncertainty in this market, but there is also a shot at a nice rebound after a shaky 2022.

Investors can expect to see National Bank’s first quarter fiscal 2023 earnings in early March. In fiscal 2022, the bank delivered net income of $3.38 billion or $9.61 per diluted share – up 8% and 9%, respectively, compared to fiscal 2021. Meanwhile, income before provisions for credit losses and income taxes climbed 10% year-over-year to $4.42 billion.

All signs point to a tough year for the Canadian economy, especially in the first half of the year. However, there are signs that the interest rate tightening cycle might be close to the end in early 2023. Significant turbulence could spur the Bank of Canada to reduce rates, but there is no telling how ironclad their inflation targets are.

Shares of National Bank currently possess a solid price-to-earnings ratio of 10. National Bank offers solid value but there is a lot of uncertainty in the Canadian market in early 2023. Investors may want to exercise caution at this stage.