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Bank Of Montreal (BMO)
NYSE:BMO
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Bank Of Montreal
(NYSE:BMO)
Rating:77Outperform
Price Target:―
Positive Factors
Capital Management
Management announced a new share repurchase program, indicating confidence in the bank's financial position and potential for value return to shareholders.
Financial Performance
Shares of BMO outperformed peers after reporting strong adjusted earnings per share, driven by lower credit costs in the US and stronger performance in Corporate and Wealth Management segments.
Revenue Growth
The bank's total revenues increased by 9.5% year-over-year, outpacing the growth in expenses and leading to strong pre-tax pre-provision profit growth.
Negative Factors
Analyst Rating
The analyst reiterates a Neutral rating, indicating a better relative risk/reward is seen elsewhere in the group.
Capital Markets Performance
Capital Markets' adjusted pre-tax, pre-provision earnings were below expectations, with expenses rising faster than revenues.
Bank Of Montreal (BMO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$87.03B
Dividend Yield3.66%
Average Volume (3M)792.04K
Price to Earnings (P/E)14.8
Beta (1Y)0.78
Revenue Growth15.63%
EPS Growth66.95%
CountryUS
Employees53,597
SectorFinancial
Sector Strength76
IndustryBanks - Diversified
Share Statistics
EPS (TTM)2.34
Shares Outstanding722,070,740
10 Day Avg. Volume747,264
30 Day Avg. Volume792,037
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 Cap2.61
Enterprise Value/Revenue2.89
Enterprise Value/Gross Profit7.38
Enterprise Value/Ebitda16.76
Forecast
1Y Price Target
$123.71Price Target Upside0.14% Upside
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 maintains a strong financial foundation with solid profitability and efficient operations. However, challenges in revenue growth and a decrease in free cash flow warrant attention. The company's strategic use of leverage supports its growth, but a low equity ratio could amplify risks in adverse conditions.Income Statement
The Bank of Montreal demonstrates a solid financial performance with a strong gross profit margin of 44.8% in TTM (Trailing-Twelve-Months), although there has been a decline in net profit margin to 12.4% due to increased expenses. Revenue growth has faced challenges, showing a decrease from the previous year, indicating potential issues with generating top-line growth. However, EBIT and EBITDA margins remain healthy, signifying operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a moderate debt-to-equity ratio of 4.6, suggesting leverage is being used effectively. Return on equity stands at 9.6%, indicating decent profitability relative to equity. The equity ratio is relatively low at 6.0%, highlighting a reliance on debt, which may pose risks if market conditions worsen.70
Positive
Cash Flow
Cash flow analysis reveals a significant decrease in free cash flow compared to the prior year, with a decline in free cash flow growth rate. Operating cash flow to net income ratio is healthy at 0.42, but the reduction in free cash flow may impact future flexibility in covering expenses or investing in growth opportunities.65
Positive
| 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
123.54
Price Trends
113.00
Positive
106.44
Positive
100.71
Positive
Market Momentum
2.57
Negative
80.94
Negative
98.76
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 123.54 is above the 20-day moving average (MA) of 115.51, above the 50-day MA of 113.00, and above the 200-day MA of 100.71, indicating a bullish trend. The MACD of 2.57 indicates Negative momentum. The RSI at 80.94 is Negative, neither overbought nor oversold. The STOCH value of 98.76 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
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $87.03B | 14.83 | 10.20% | 3.66% | 15.63% | 66.95% | |
68 Neutral | $17.79B | 11.64 | 10.28% | 3.76% | 9.64% | 1.17% | |
| ― | $77.29B | 16.10 | 8.64% | 4.88% | ― | ― | |
| ― | $71.88B | 12.97 | 13.40% | 3.49% | ― | ― | |
| ― | $204.14B | 15.24 | 14.60% | 2.93% | ― | ― | |
| ― | $131.37B | 9.02 | 17.36% | 3.96% | ― | ― | |
| ― | $41.03B | 14.22 | 13.25% | 3.13% | ― | ― |
* Financial Sector Average
Performance Comparison
BMO
Bank Of Montreal
123.54
44.19
55.69%
BNS
Bank Of Nova Scotia
62.85
14.92
31.13%
CM
Canadian Bank of Commerce
78.44
22.02
39.03%
RY
Royal Bank Of Canada
145.64
27.67
23.46%
TD
Toronto Dominion Bank
74.86
18.51
32.85%
NTIOF
National Bank of Canada
104.88
16.43
18.58%
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.