BNS
I've been long on BNS for many years. Despite its prolonged underperformance relative to the other Canadian banks, I've continued to hold and reinvest dividends through a DRIP, which has produced solid long-term returns for me.
While I'm pleased with the recent share price appreciation, I'm beginning to question whether the stock has become overvalued. Historically, BNS has generally traded around a 10x P/E multiple, but it's now trading closer to 17x earnings, which is well above its long-term average.
For those who remain bullish, what do you believe is driving the market to assign BNS such a premium valuation relative to its historical P/E ratio? Is there a fundamental change in the business, growth outlook, or risk profile that justifies this re-rating?
I've enjoyed the recent run-up, but I'm starting to consider trimming or exiting my position because the current valuation appears disconnected from historical norms. I'd be interested to hear the bull case from those who continue to see meaningful upside from here.