Is EQB still a buy?

He’s still bullish, just a little less so.

That’s RBC analyst Darko Mihelic’s take on EQB Inc. (EQB Stock Quote, Chart, News, Analysts, Financials TSX:EQB).

On February 25, EQB released its Q1, 2025 results. The company posted Adjusted Net Income of $116.0-million on Adjusted Revenue of $323-million, a topline that was up 8% year-over-year.

“We enter fiscal 2025 confident in EQB’s growth opportunities and ready to build on our exceptional performance this quarter,” CEO Andrew Moor said. “Our confidence is well-founded. Canadians – in growing numbers – are responding to our innovative EQ Bank digital offerings and choosing us as their primary bank. We enjoy leadership positions in insured multi-unit residential, single-family residential and decumulation markets where needs for capital are substantial. The tailwind of recent interest rate cuts provides a constructive backdrop for enhanced loan growth and improving credit metrics. While we will need to manage second-order effects of cross-border tariff threats carefully, our purely domestic market presence, focus on lending in large Canadian urban centres with diversified economies and the highly competitive nature of our Challenger Bank services support a positive outlook.”

As reported by the Globe and Mail, Mihelic February 27 maintained his “Outperform” rating on EQB while cutting his price target from $153.00 to $147.00.

“While we expect short-term PCL noise to persist related to the Pride facility, we believe credit quality is normalizing for the majority of EQB’s loan portfolio and we model lower impaired PCLs,” he wrote. “We lower our revenue expectations (securitization activities/derivatives gains), and we reflect lower NIMs that remain around management guidance of 2 per cent or above. We think revenue growth in 2025 may be a little challenged, but see it improving in H2/25 and into 2026 as we expect loan growth to accelerate while customer growth (deposits) remains impressive.”