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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
Earnings Growth
Strong earnings growth indicates effective cost management and revenue generation, enhancing long-term profitability and shareholder value.
Digital and AI Strategy
Investment in digital and AI tools improves operational efficiency and customer service, positioning BMO for future growth in a tech-driven market.
Shareholder Returns
Strong capital returns through dividends and buybacks demonstrate financial health and commitment to enhancing shareholder value.
Negative Factors
Revenue Growth Challenges
Inconsistent revenue growth can hinder long-term financial performance, requiring strategic adjustments to sustain growth.
High Leverage
High leverage poses risks to financial stability, potentially limiting flexibility in adverse economic conditions.
Credit Card Delinquencies
Rising delinquencies can impact profitability and risk management, necessitating improved credit controls and economic resilience.
Bank Of Montreal (BMO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$98.91B
Dividend Yield3.61%
Average Volume (3M)562.68K
Price to Earnings (P/E)17.0
Beta (1Y)0.66
Revenue Growth15.63%
EPS Growth66.95%
CountryUS
Employees53,597
SectorFinancial
Sector Strength70
IndustryBanks - Diversified
Share Statistics
EPS (TTM)2.42
Shares Outstanding708,905,700
10 Day Avg. Volume698,361
30 Day Avg. Volume562,681
Financial Highlights & Ratios
PEG Ratio0.71
Price to Book (P/B)1.43
Price to Sales (P/S)1.61
P/FCF Ratio14.78
Enterprise Value/Market Cap4.87
Enterprise Value/Revenue6.16
Enterprise Value/Gross Profit14.83
Enterprise Value/Ebitda35.40
Forecast
1Y Price Target
$139.37Price Target Upside0.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Bank Of Montreal Business Overview & Revenue Model
Company DescriptionBank of Montreal provides diversified financial services primarily in North America. The company's personal banking products and services include checking and savings accounts, credit cards, mortgages, and financial and investment advice services; and commercial banking products and services comprise business deposit accounts, commercial credit cards, business loans and commercial mortgages, cash management solutions, foreign exchange, specialized banking programs, treasury and payment solutions, and risk management products for small business and commercial banking customers. It also offers investment and wealth advisory services; digital investing services; financial services and solutions; and investment management, and trust and custody services. In addition, the company provides life insurance, accident and sickness insurance, and annuity products; creditor and travel insurance to bank customers; and reinsurance solutions. Further, it offers client's debt and equity capital-raising services, as well as loan origination and syndication, and treasury management; strategic advice on mergers and acquisitions, restructurings, and recapitalizations, as well as valuation and fairness opinions; and trade finance, risk mitigation, and other operating services. Additionally, the company provides research and access to markets for institutional, corporate, and retail clients; trading solutions that include debt, foreign exchange, interest rate, credit, equity, securitization and commodities; new product development and origination services, as well as risk management advice and services to hedge against fluctuations; and funding and liquidity management services to its clients. It operates through approximately 900 bank branches and 3,300 automated banking machines in Canada and the United States. Bank of Montreal was founded in 1817 and is headquartered in Montreal, Canada.
How the Company Makes MoneyBMO generates revenue primarily through net interest income and non-interest income. Net interest income is earned from the difference between the interest it collects on loans and the interest it pays on deposits. This includes personal loans, mortgages, and commercial loans. Non-interest income comes from fees for services such as wealth management, investment advice, and trading services, as well as transaction fees from credit card usage and account maintenance. Additionally, BMO's Capital Markets division contributes significantly to its earnings through investment banking, trading, and advisory services. The bank also benefits from strategic partnerships with other financial institutions and technology firms that enhance its service offerings and operational efficiency, driving further revenue growth.
Bank Of Montreal Earnings Call Summary
Earnings Call Date:Dec 04, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 25, 2026
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements in earnings growth, ROE improvement, and strategic initiatives, especially in digital and AI advancements. However, challenges in the Canadian economy and credit card delinquencies, along with macroeconomic uncertainties, were notable concerns.Q4-2025 Updates
Positive Updates
Strong Earnings Growth
BMO reported an adjusted EPS of $3.28 for Q4 2025, up significantly from $1.90 last year, with net income of $2.5 billion driven by strong PPPT growth of 16% and lower PCLs.
Increased Return on Equity
Full year ROE increased by 150 basis points from 9.8% to 11.3%, with Q4 momentum at 11.8%.
Record Net Income
Record net income of $9.2 billion for the year, with EPS growth of 26%.
Positive Operating Leverage
Achieved positive operating leverage of 4% for the year, with an efficiency ratio improvement of 230 basis points to 56.3%.
Capital Optimization and Shareholder Returns
Returned over $8 billion in capital to shareholders through buybacks and dividends, with a dividend increase of $0.04 to $1.67 per share.
Digital and AI Strategy
Introduced AI productivity tools to all employees, with over 80% active users, and implemented Gen AI tools like Lumi and Rover to enhance customer service.
Strong Wealth Management Performance
Wealth Management had a very strong year with record revenues and net income, driven by client asset growth and market conditions.
Negative Updates
Challenges in Canadian Economy
Softness in the Canadian economy, including rising unemployment and trade uncertainty, resulted in higher losses in Canadian Personal and Commercial business.
Credit Card Delinquencies
Higher delinquency rates in the Canadian credit card book, attributed to macroeconomic conditions affecting mass consumers.
Asset Sale and Goodwill Write-down
Goodwill write-down related to the announced sale of certain U.S. branches.
Economic Uncertainty Impacting Loan Growth
Trade uncertainty and subdued consumer sentiment impacting loan growth, particularly in Canada.
Company Guidance
During the BMO Financial Group's Q4 2025 earnings call, CEO Darryl White highlighted several key metrics reflecting the bank's strong performance. The bank reported an adjusted EPS of $3.28 for Q4 and $12.16 for the fiscal year, marking a 26% growth in EPS and a record net income of $9.2 billion. BMO achieved a full-year ROE increase from 9.8% to 11.3%, exiting Q4 with an ROE of 11.8%. Pre-Provision Pre-Tax (PPPT) earnings rose by 18% to $15.8 billion. The bank also achieved positive operating leverage of 4%, with an improved efficiency ratio of 56.3%. BMO's credit performance showed impaired provisions at 44 basis points, and the bank returned over $8 billion to shareholders through buybacks and dividends, increasing the dividend by $0.04 to $1.67 per share. The CET1 ratio remained strong at 13.3%. The bank's digital-first AI-powered strategy and investments in AI capabilities were also emphasized as key drivers of operational efficiency and client service enhancements.Bank Of Montreal Financial Statement Overview
Summary
Earnings and profitability improved (solid net margin and higher ROE), but the latest-year balance-sheet leverage increased meaningfully (debt-to-equity ~4.7x vs ~3.1x) and both revenue and cash flows have been volatile, reducing confidence in durability.Income Statement
Revenue is volatile: it rose strongly in 2024 and remained high in 2025, but 2025 showed a slight decline year over year. Profitability is solid with a 2025 net margin around 11% and improved earnings versus 2024, indicating decent operating leverage. However, margins and growth rates have been inconsistent across the period (including unusually high margin years earlier), which reduces confidence in durability of the run-rate.65
Positive
Balance Sheet
The balance sheet is large and growing, but leverage is elevated: debt-to-equity moved up to ~4.7x in 2025 versus ~3.1x in 2024, signaling a meaningful increase in balance-sheet risk. Equity has grown over time, and return on equity improved to ~9.9% in 2025 from ~8.7% in 2024, but the higher leverage in the latest year is a key watch item for a diversified bank.70
Positive
Cash Flow
Cash generation is positive in 2025 (operating cash flow ~$10.2B; free cash flow ~$8.5B) with free cash flow covering a large portion of net income (~83%). That said, operating and free cash flow are highly volatile (very strong in 2024, much lower in 2025), and the cash-flow-based coverage metric provided is very low in recent years, suggesting weaker consistency in cash conversion and/or balance-sheet-driven cash movements.75
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 78.15B | 78.56B | 29.02B | 26.26B | 26.91B |
| Gross Profit | 32.48B | 28.28B | 29.64B | 25.95B | 26.91B |
| EBITDA | 13.73B | 11.18B | 7.71B | 19.09B | 11.44B |
| Net Income | 8.71B | 7.32B | 4.42B | 13.54B | 7.75B |
Balance Sheet | |||||
| Total Assets | 1.48T | 1.41T | 1.29T | 1.14T | 988.17B |
| Cash, Cash Equivalents and Short-Term Investments | 104.16B | 113.53B | 114.31B | 118.21B | 121.97B |
| Total Debt | 415.19B | 262.44B | 248.74B | 222.64B | 189.81B |
| Total Liabilities | 1.39T | 1.33T | 1.22T | 1.07T | 930.65B |
| Stockholders Equity | 88.05B | 84.25B | 77.01B | 71.04B | 57.52B |
Cash Flow | |||||
| Free Cash Flow | 8.51B | 27.47B | 19.59B | 3.51B | 43.07B |
| Operating Cash Flow | 10.24B | 29.03B | 21.27B | 4.96B | 44.05B |
| Investing Cash Flow | 605.00M | -24.53B | -21.16B | -29.47B | -299.00M |
| Financing Cash Flow | -8.67B | -17.41B | 268.00M | 15.98B | 47.12B |
Bank Of Montreal Technical Analysis
Positive
139.23
Price Trends
130.31
Positive
128.18
Positive
117.19
Positive
Market Momentum
2.53
Negative
69.95
Neutral
88.93
Negative
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 139.23 is above the 20-day moving average (MA) of 134.99, above the 50-day MA of 130.31, and above the 200-day MA of 117.19, indicating a bullish trend. The MACD of 2.53 indicates Negative momentum. The RSI at 69.95 is Neutral, neither overbought nor oversold. The STOCH value of 88.93 is Negative, 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $98.91B | 17.01 | 10.10% | 3.61% | 15.63% | 66.95% | |
77 Outperform | C$127.97B | 17.73 | 9.19% | 4.32% | -3.65% | -1.73% | |
76 Outperform | $63.25B | 15.94 | 13.53% | 2.64% | 7.50% | -5.28% | |
73 Outperform | $316.35B | 16.02 | 15.28% | 2.58% | 2.13% | 25.16% | |
71 Outperform | C$117.06B | 14.65 | 13.69% | 3.07% | -3.13% | 18.22% | |
70 Outperform | C$214.40B | 10.97 | 16.78% | 3.34% | 3.07% | 144.41% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
BMO
Bank Of Montreal
141.40
44.92
46.56%
TSE:BNS
Bank Of Nova Scotia
103.04
31.87
44.77%
TSE:CM
Canadian Bank of Commerce
128.23
39.38
44.32%
TSE:RY
Royal Bank Of Canada
227.52
54.50
31.50%
TSE:TD
Toronto Dominion Bank
127.99
48.29
60.58%
TSE:NA
National Bank of Canada
163.68
36.73
28.94%
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.