NATIONAL BANK OF CANADA (NA)

 

he National Bank of Canada (Banque Nationale du Canada in French) is one of the six largest and most important banks in Canada. It was founded in 1859 and is headquartered in Montreal, Quebec.

It offers a wide range of financial services to individuals, commercial banking solutions for businesses, and institutional and government clients, such as financial market services, wealth management, and investment banking.

National Bank of Canada operates in other countries, including the United States, Cambodia, Ireland, Malta, Thailand, and China.

The historical behavior of this bank is studied across three segments: long-term, medium-term, and short-term.

In the long term, the analysis of this bank's shares runs from January 4, 2010, to June 6, 2025. In January 2010, it started with a price of CAD 29.96 (CAD being its currency, Canadian dollars) and ended on June 6, 2025, with a value of CAD 133.87, showing a return of 346.83%. This return, while significant, is not extremely suggestive over 14 years of uninterrupted operations. The average price achieved during this period is CAD 70.44, and the median reached a lower value of CAD 65.05. This indicates a distortion in the normality of the Gaussian bell curve, showing a right skew which means many values are concentrated to the left of the mean, with very few extreme values on the right side. If a long-term histogram is created, it shows a multimodal distribution with a logical right skew.

he resistance or highest price reached in 14 years is CAD 140.76, and the lowest price or support is CAD 28.25, showing a corridor with a range of CAD 112.51 in absolute terms. The support was reached on January 29, 2010, and the resistance on December 3, 2024,showing an ascent with a moderate slope of 0.015 until reaching the resistance value of CAD 140.76 on December 3, 2024. The share price began with a permanent and systematic ascent.

The kurtosis of the distribution is platykurtic, or flatter than normal, with a value of -0.2052, showing greater data dispersion relative to the mean.

The cumulative probability 'p' over the price movement has been 99.57%, which suggests the confidence this asset has generated, reaching an extreme confidence limit of 2.63. This implies caution, according to statistical and econometric appreciation, because it could translate into a price reversal or adjustment in the short or medium term.

In the medium term, which considers the share price behavior over the last three years starting February 17, 2021, the mean and median show a significant increase compared to the long-term. The medium-term mean is CAD $102.97, and the median is CAD $99.19, continuing the positive skew or distortion of 0.6643. The kurtosis is -0.1402, confirming that it remains flatter than normal (platykurtic), though to a lesser extent than in the long term.

The price movement in the Gaussian bell curve shows a cumulative confidence probability of 98.70%, decreasing relative to the long-term, and logically, the confidence limit reached is 2.23. This indicates that in this timeframe, the medium-term price has already reached the cycle's peak, initiating a correction or price adjustment.

In the short term, covering the last six months starting September 16, 2024, the mean is CAD 127.29, and the median is CAD 128.73. This shifts the skew to the left, meaning the skew now appears on the left side of the mean at -0.5896, demonstrating market volatility and dynamic change.

The kurtosis in this timeframe continues to be platykurtic, indicating no variation across the three timeframes. The cumulative probability of the price movement in the short term reduced to 82.85%, generating a contraction in the confidence limit to 0.95, already approaching the mean. The resistance in this timeframe is CAD 140.76, while the support is CAD 107.01, showing a range of CAD 33.75. The polynomial trends of order 6 and order 3 in this timeframe show price expansion, indicating that in a short time, it will enter a distribution phase or a decline in the share price.

Analysis of National Bank of Canada (NA) Indicators

The bid price is 133.66, and the ask price is 133.93. The difference is 0.27, which is a relatively tight spread, suggesting good market liquidity.

The previous closing price was slightly lower than the current bid, which could indicate a slight positive momentum at the start of the trading day. Opening above the previous close and the bid/ask suggests positive sentiment at the start of the day.

The stock is near the upper end of its 52-week range (133.80 vs 141.15). This suggests that the stock has performed well over the past year, but also that it might be approaching resistance.

The current volume is 1.467 million shares. This is lower than the average volume over the last 3 months. A lower-than-normal volume could indicate less interest today or a consolidation phase.

With a market capitalization of $52.32 billion, National Bank of Canada is a large and established bank in Canada.

The price-to-earnings (P/E) ratio of 10.9x is relatively low compared to the market average, which could suggest that the stock is undervalued relative to its earnings. This has been highlighted by analysts as an attractive point.

The Return on Assets (ROA) measures how efficiently the company uses its assets to generate profits. 0.8% is typical for banks, though it can vary.

The Return on Equity (ROE) measures profitability for shareholders. 13.8% is a strong ROE and suggests efficient capital management. An adjusted ROE of 15.6% has been reported for Q2 2025, which is very good.

The price-to-book (Price/Book) ratio of 1.7x indicates that the stock trades at 1.7 times its book value. This can be considered reasonable for a well-established bank.

A dividend of $4.72 per share with a 3.5% yield is attractive to income-seeking investors.

The next earnings date is a key date to monitor for future performance.

A beta of 1.20 indicates that the stock is slightly more volatile than the overall market.

Analysts expect moderate EPS growth for 2025 and positive operating leverage. Revenue synergies from the CWB acquisition are expected to accelerate in 2026.

The stock is considered a stable, low-risk investment option with an attractive dividend.

There is optimism about the bank's long-term growth potential, driven by its strategic positioning in Quebec's economy and its mortgage risk profile.

The Bank of Canada maintained its policy rate at 2.75% in June 2025, and uncertainty over U.S. trade policies remains a key factor.

The indicators for National Bank of Canada suggest a solid, well-managed company with a history of growth and profitability. This is supported by high revenues and net income, a good ROE, a decent dividend yield, and a consistently growing payment streak. A relatively low P/E ratio suggests the stock might be undervalued, and the CWB acquisition is positively contributing to revenue and is expected to generate further synergies.

While the bank has demonstrated resilience, uncertainty regarding interest rates and global trade policies (particularly U.S. tariffs) could affect the banking sector in general.

In summary, National Bank of Canada appears to be an attractive investment, especially for investors seeking income and long-term value. Its recent strong performance, strategic growth through acquisitions, and solid fundamental base position it favorably. However, as with any investment, it's important to consider the macroeconomic outlook and potential volatility. Monitoring future earnings reports and general economic trends will be crucial.