Bank Of Montreal (BMO) AI Stock Analysis

• Market Cap: $90.79B
• Dividend Yield: 3.61%
• Average Volume (3M): 675.66K
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.69
• Revenue Growth: 15.63%
• EPS Growth: 66.95%
• Country: US
• Employees: 53,597
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Diversified
• EPS (TTM): 2.35
• Shares Outstanding: 716,360,530
• 10 Day Avg. Volume: 437,474
• 30 Day Avg. Volume: 675,662
• PEG Ratio: 0.19
• Price to Book (P/B): 1.10
• Price to Sales (P/S): 1.18
• P/FCF Ratio: 3.36
• Enterprise Value/Market Cap: 2.31
• Enterprise Value/Revenue: 2.67
• Enterprise Value/Gross Profit: 6.81
• Enterprise Value/Ebitda: 15.47
• 1Y Price Target: $130.96
• Price Target Upside: 3.37% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• 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

Revenue Growth

Strong revenue growth indicates robust business expansion and effective market penetration, enhancing BMO's competitive position in the financial sector.

Strategic U.S. Expansion

Expanding branch network in the U.S. strengthens BMO's market presence and customer base, supporting long-term growth and revenue diversification.

Strong Earnings Growth

Record earnings growth reflects effective management strategies and operational efficiency, enhancing shareholder value and financial stability.

Negative Factors

High Leverage

Significant leverage poses risks in adverse conditions, potentially impacting BMO's financial flexibility and ability to manage economic downturns.

Declining Cash Flow

Declining cash flow growth can constrain BMO's ability to fund operations and investments, affecting long-term financial health and strategic initiatives.

Challenges in Canadian Market

Challenges in the Canadian market, including higher credit losses, may hinder BMO's profitability and growth prospects in its home market.

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 generates revenue through various streams, primarily from interest income and non-interest income. Interest income comes from the loans it extends to customers, including personal loans, mortgages, and commercial loans, which are repaid with interest over time. Non-interest income includes fees from account services, transaction fees, investment management fees, and trading income from its capital markets division. Additionally, BMO benefits from partnerships with other financial institutions and businesses, providing investment banking and advisory services. The bank also sees significant contributions from its wealth management services, which cater to both individual and institutional clients, thereby diversifying its revenue sources.

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.

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.

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.

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	19.09B	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

• Technical Analysis Sentiment: Positive
• Last Price: 126.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 126.69 is above the 20-day moving average (MA) of 123.96, above the 50-day MA of 125.14, and above the 200-day MA of 110.03, indicating a bullish trend. The MACD of 0.40 indicates Negative momentum. The RSI at 58.53 is Neutral, neither overbought nor oversold. The STOCH value of 89.10 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NA	78 Outperform	$61.80B	15.30	13.53%	2.69%	7.50%	-5.28%
CM	77 Outperform	$110.53B	14.30	13.40%	3.07%	-0.39%	20.28%
BMO	77 Outperform	$90.79B	15.49	10.10%	3.61%	15.63%	66.95%
RY	75 Outperform	$303.77B	16.32	15.28%	2.70%	2.13%	25.16%
TD	75 Outperform	$201.79B	10.11	17.36%	3.50%	7.92%	175.59%
BNS	71 Outperform	$122.66B	16.91	9.19%	4.39%	-3.65%	-1.73%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%