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Bank Of Montreal (BMO)
NYSE:BMO
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Bank Of Montreal
(NYSE:BMO)
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Rating:77Outperform
Price Target:―
BMO's overall stock score reflects a strong financial performance driven by revenue growth and cash flow strength, despite operational challenges. Technical indicators support a stable outlook, while valuation metrics are appealing for income investors. Mixed sentiment from the earnings call, particularly regarding net income decline and U.S. segment challenges, slightly offsets the positives. Overall, BMO presents a well-rounded investment but with attention to macroeconomic risks.
Positive Factors
Revenue Growth
Consistent revenue growth indicates robust business expansion and effective market strategies, enhancing long-term financial stability.
Strong Earnings Performance
Record net income and strong earnings per share growth reflect effective operational management and strategic execution, supporting future profitability.
Wealth Management Growth
Record revenue in Wealth Management demonstrates effective client acquisition and service offerings, contributing to diversified income streams.
Negative Factors
High Debt Levels
Significant leverage poses risks in adverse conditions, potentially impacting financial flexibility and increasing vulnerability to economic downturns.
Cash Flow Constraints
Declining free cash flow growth raises concerns about cash generation, which could affect the company's ability to fund operations and investments.
Challenges in Canadian Banking
Declining net income in Canadian banking indicates challenges in the domestic market, potentially affecting overall profitability and growth prospects.
Bank Of Montreal (BMO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$93.62B
Dividend Yield3.48%
Average Volume (3M)663.79K
Price to Earnings (P/E)15.9
Beta (1Y)0.76
Revenue Growth15.63%
EPS Growth66.95%
CountryUS
Employees53,597
SectorFinancial
Sector Strength70
IndustryBanks - Diversified
Share Statistics
EPS (TTM)2.32
Shares Outstanding716,360,530
10 Day Avg. Volume633,250
30 Day Avg. Volume663,795
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap2.43
Enterprise Value/Revenue2.89
Enterprise Value/Gross Profit7.38
Enterprise Value/Ebitda16.76
Forecast
1Y Price Target
$123.43Price Target Upside-4.91% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Bank Of Montreal Business Overview & Revenue Model
Company DescriptionThe Bank of Montreal (BMO) is one of the largest financial institutions in Canada, offering a wide range of banking, investment, and financial services to personal, commercial, and institutional clients. Founded in 1817, BMO operates through several segments, including Personal and Commercial Banking, Wealth Management, and BMO Capital Markets. Core products and services include personal banking accounts, mortgages, loans, credit cards, investment management, and capital market solutions, making it a significant player in both Canadian and U.S. markets.
How the Company Makes MoneyBMO generates revenue primarily through interest income from loans and mortgages, fees from various banking services, and investment management fees. The main revenue streams include interest from personal banking, commercial loans, and credit cards, which are supplemented by transaction and service fees from account management and advisory services. Additionally, BMO Capital Markets contributes to revenue through underwriting, trading, and advisory services, while its Wealth Management division earns fees from asset management and financial planning. Strategic partnerships and a strong retail presence enhance customer acquisition and retention, further driving revenue growth.
Bank Of Montreal Earnings Call Summary
Earnings Call Date:Aug 26, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Dec 04, 2025
Earnings Call Sentiment Positive
The earnings call highlighted record net income and strong earnings growth, with improvements in return on equity and positive operating leverage across the bank. However, challenges remain in the Canadian market with higher provisions for credit losses and macroeconomic uncertainty. Despite these challenges, the overall sentiment is positive due to strong financial performance and strategic progress.Q3-2025 Updates
Positive Updates
Record Net Income and Earnings Per Share Growth
Third quarter net income of $2.4 billion was the highest on record, and earnings per share increased 22% to $3.23.
Strong Pre-Provision Pretax Earnings
Pre-provision pretax earnings increased by 13% to $4 billion, with positive contributions from every operating group.
Positive Operating Leverage for Six Consecutive Quarters
The bank achieved positive operating leverage for six consecutive quarters, with an all-bank operating leverage of 4.7% year-to-date.
Improvement in Return on Equity
Return on equity improved to 12% for the quarter, driven by various strategic initiatives, including U.S. P&C improvement and capital optimization.
Strong Performance in Wealth Management
BMO Wealth Management achieved record revenue in Wealth and Asset Management, with continued growth in net new assets.
Positive U.S. P&C Results
U.S. P&C net income increased by 42%, with strong PPPT growth of 10% and positive operating leverage of 5%.
Negative Updates
Challenges in Canadian Personal and Commercial Banking
Canadian P&C net income was down 5% year-over-year, primarily due to higher provisions for credit losses.
Macroeconomic Uncertainty in Canada
Canada is experiencing a period of modest growth with some trade-related risks and geopolitical challenges impacting the economic environment.
Weakness in Canadian Retail Portfolios
Higher losses in Canadian unsecured retail portfolios were observed, driven by unemployment and insolvency trends in Canada.
Company Guidance
During the BMO Financial Group's Q3 2025 earnings call, the company reported a strong financial performance with several key metrics highlighted. Earnings per share increased by 22% to $3.23, and net income reached a record high of $2.4 billion. Pre-provision pretax earnings rose 13% to $4 billion, driven by contributions from all operating groups. The CET1 ratio stood robust at 13.5%, supporting share buybacks and client growth. Return on equity improved to 12%, and year-to-date revenue growth was 12%, with PPPT up 19% and all-bank operating leverage at 4.7%. These results were achieved amid a modest growth environment in Canada and resilience in the U.S. economy, despite higher interest rates and tariffs. BMO continues to focus on ROE rebuild strategies, capital optimization, and sustainable growth across its businesses.Bank Of Montreal Financial Statement Overview
Summary
Bank of Montreal shows strong revenue growth and profitability with solid margins. However, high leverage and declining cash flow growth present potential risks. The company needs to focus on improving cash flow management and reducing leverage to enhance financial stability.Income Statement
The Bank of Montreal shows strong revenue growth with a 17.84% increase in TTM, indicating robust business expansion. Gross profit margin is healthy at 39.15%, and net profit margin has improved to 11.09%, reflecting enhanced profitability. EBIT and EBITDA margins are solid, supporting operational efficiency. However, historical fluctuations in revenue growth and margins suggest potential volatility.85
Very Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 4.54, indicating significant leverage, which could pose risks in adverse conditions. Return on equity is moderate at 10.13%, showing reasonable profitability from shareholders' equity. The equity ratio is relatively low, suggesting limited equity financing. Overall, the balance sheet is stable but with notable leverage concerns.70
Positive
Cash Flow
The cash flow statement highlights a significant decline in free cash flow growth by 74.17% in TTM, raising concerns about cash generation. The operating cash flow to net income ratio is low at 0.002, indicating potential cash flow constraints. However, the free cash flow to net income ratio remains positive at 0.24, suggesting some level of cash profitability. Overall, cash flow management needs improvement.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 78.61B | 78.56B | 29.02B | 26.26B | 26.91B | 22.23B |
| Gross Profit | 30.77B | 28.28B | 29.64B | 25.95B | 26.91B | 25.02B |
| EBITDA | 13.55B | 11.18B | 7.71B | 19.00B | 11.44B | 7.61B |
| Net Income | 8.72B | 7.32B | 4.42B | 13.54B | 7.75B | 5.10B |
Balance Sheet | ||||||
| Total Assets | 1.43T | 1.41T | 1.29T | 1.14T | 988.17B | 949.26B |
| Cash, Cash Equivalents and Short-Term Investments | 169.21B | 113.53B | 114.31B | 118.21B | 121.97B | 95.24B |
| Total Debt | 394.00B | 262.44B | 248.74B | 222.64B | 189.81B | 187.01B |
| Total Liabilities | 1.34T | 1.33T | 1.22T | 1.07T | 930.65B | 892.67B |
| Stockholders Equity | 86.72B | 84.25B | 77.01B | 71.04B | 57.52B | 56.59B |
Cash Flow | ||||||
| Free Cash Flow | 518.00M | 27.47B | 19.59B | 3.51B | 43.07B | 49.80B |
| Operating Cash Flow | 2.18B | 29.03B | 21.27B | 4.96B | 44.05B | 50.84B |
| Investing Cash Flow | -5.94B | -24.53B | -21.16B | -29.47B | -299.00M | -31.97B |
| Financing Cash Flow | -12.02B | -17.41B | 268.00M | 15.98B | 47.12B | -10.30B |
Bank Of Montreal Technical Analysis
Positive
129.80
Price Trends
119.35
Positive
112.86
Positive
103.94
Positive
Market Momentum
3.22
Positive
67.11
Neutral
68.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BMO, the sentiment is Positive. The current price of 129.8 is above the 20-day moving average (MA) of 127.74, above the 50-day MA of 119.35, and above the 200-day MA of 103.94, indicating a bullish trend. The MACD of 3.22 indicates Positive momentum. The RSI at 67.11 is Neutral, neither overbought nor oversold. The STOCH value of 68.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BMO.
Bank Of Montreal Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$104.51B | 13.52 | 12.99% | 3.45% | -0.39% | 20.28% | |
78 Outperform | C$59.06B | 14.63 | ― | 3.08% | 9.25% | 0.34% | |
77 Outperform | $93.62B | 15.92 | 10.20% | 3.48% | 15.63% | 66.95% | |
75 Outperform | C$286.10B | 15.37 | 14.13% | 2.91% | 3.48% | 17.81% | |
74 Outperform | C$188.39B | 9.44 | 16.66% | 3.78% | 7.92% | 175.59% | |
71 Outperform | C$111.51B | 16.72 | ― | 6.08% | -2.54% | -6.66% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
BMO
Bank Of Montreal
129.80
42.62
48.89%
TSE:BNS
Bank Of Nova Scotia
90.20
20.87
30.10%
TSE:CM
Canadian Bank of Commerce
110.86
32.57
41.59%
TSE:RY
Royal Bank Of Canada
204.70
43.24
26.78%
TSE:TD
Toronto Dominion Bank
111.11
29.31
35.83%
TSE:NA
National Bank of Canada
148.92
25.85
21.00%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.