Bank Of Montreal (BMO) AI Stock Analysis

• Market Cap: $77.95B
• Dividend Yield: 4.12%
• Average Volume (3M): 561.18K
• Price to Earnings (P/E): 13.9
• Beta (1Y): 0.80
• Revenue Growth: 15.63%
• EPS Growth: 66.95%
• Country: US
• Employees: 53,597
• Sector: Financial
• Sector Strength: 79
• Industry: Banks - Diversified
• EPS (TTM): 1.92
• Shares Outstanding: 722,070,740
• 10 Day Avg. Volume: 623,591
• 30 Day Avg. Volume: 561,183
• PEG Ratio: 0.08
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.75
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $116.84
• Price Target Upside: 8.45% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 77 Outperform
• 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

BMO reported an EPS beat driven by lower-than-expected Corporate losses.

Financial performance

The stock outperformed peers after reporting stronger growth due to a narrower loss in the corporate segment and lower credit costs.

Net interest margins

Balance sheet optimization actions, such as selling a non-relationship credit card portfolio and focusing on core checking deposits, are boosting net interest margins and return on equity.

Negative Factors

Capital Markets performance

Capital Markets performance was below estimates despite a 14% increase in Global Markets revenue.

Credit risks

Risks from tariffs could impact credit improvements, with potential rises in impaired provisions for credit losses.

Impaired provisions

BMO noted that impaired PCLs could trend up slightly in the back half of the year, which was worse than expected but reasonable given the current climate.

Bank Of Montreal Business Overview & Revenue Model

Company Description

Bank 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 Money

BMO makes money primarily through interest income and non-interest income. Interest income is generated from loans and mortgages offered to personal and commercial banking customers. The bank earns interest on the funds it lends, which is a major component of its revenue. Non-interest income comes from fees and commissions associated with various financial services, including wealth management, investment banking, and trading activities. BMO also benefits from its capital markets operations, which provide services such as underwriting, advisory, and trading solutions. Additionally, strategic partnerships and collaborations with financial technology firms and other institutions enhance its service offerings and contribute to its revenue growth.

Bank Of Montreal Financial Statement Overview

Summary

Bank of Montreal demonstrates a strong overall financial position with stable revenue growth and profitability. Despite high leverage, the bank maintains robust operations with effective cash conversion, though continued focus on operational efficiency and cash flow management is crucial.

Income Statement

The income statement shows a solid performance with a significant increase in total revenue from the previous year by 38.24% (TTM). The gross profit margin is robust, indicating efficient cost management. However, the EBIT margin is moderate at 6.96%, suggesting room for improvement in operational efficiency. The net profit margin is healthy at 18.42%, highlighting profitability.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 3.13, which is typical for the banking industry but indicates high leverage. The equity ratio is 5.96%, suggesting a conservative level of equity financing. Return on Equity is a strong 9.32%, affirming effective use of shareholders' funds.

Cash Flow

The cash flow statement shows a decline in free cash flow growth rate compared to previous periods, indicating potential challenges in generating cash. The operating cash flow to net income ratio is 2.15, suggesting effective conversion of income to cash. However, the free cash flow to net income ratio of 1.96 indicates less cash available after capital expenditures.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
44.31B	32.04B	29.02B	26.26B	26.91B	25.02B
	Gross Profit
45.22B	32.04B	33.05B	26.26B	26.91B	25.02B
	EBIT
6.33B	11.18B	10.30B	28.90B	10.26B	6.35B
	EBITDA
6.17B	11.18B	7.71B	19.00B	11.44B	7.61B
	Net Income Common Stockholders
8.16B	7.32B	4.37B	13.54B	7.75B	5.10B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
180.06B	113.53B	114.31B	118.21B	121.97B	95.24B
	Total Assets
1.47T	1.41T	1.29T	1.14T	988.17B	949.26B
	Total Debt
274.34B	262.44B	248.74B	222.64B	189.81B	187.01B
	Net Debt
194.54B	193.70B	166.69B	129.44B	88.24B	120.57B
	Total Liabilities
1.38T	1.33T	1.22T	1.07T	930.65B	892.67B
	Stockholders Equity
87.56B	84.25B	77.01B	71.04B	57.52B	56.59B
Cash Flow		Free Cash Flow
16.02B	27.47B	7.91B	3.51B	43.07B	49.80B
	Operating Cash Flow
17.57B	29.03B	9.59B	4.96B	44.05B	50.84B
	Investing Cash Flow
-31.52B	-24.53B	-21.16B	-29.47B	-299.00M	-31.97B
	Financing Cash Flow
7.31B	-17.41B	268.00M	15.98B	-5.12B	-10.30B

Bank Of Montreal Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 107.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: 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 107.74 is above the 20-day moving average (MA) of 105.78, above the 50-day MA of 98.80, and above the 200-day MA of 94.18, indicating a bullish trend. The MACD of 2.58 indicates Positive momentum. The RSI at 78.91 is Negative, neither overbought nor oversold. The STOCH value of 54.75 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RY	81 Outperform	$247.46B	13.94	14.17%	3.21%	6.03%	15.60%
TD	79 Outperform	$169.49B	10.02	14.27%	4.13%	13.12%	61.99%
NA	78 Outperform	$52.63B	12.69	13.42%	3.23%	17.13%	14.73%
BMO	77 Outperform	$77.95B	13.95	9.88%	4.12%	15.63%	66.95%
CM	77 Outperform	$87.52B	11.74	13.19%	3.91%	5.38%	21.68%
BNS	71 Outperform	$92.15B	14.93	8.00%	5.47%	3.72%	-17.99%
Sector *	64 Neutral	$12.85B	9.81	7.79%	78.20%	12.23%	-7.93%