Download PDF

1. Company Snapshot

1.a. 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.

Show Full description

1.b. Last Insights on BMO

Bank of Montreal's recent performance was driven by strong Q1 2025 earnings and revenue growth, with net income increasing 65.5% year-over-year to $2.138 billion, and adjusted net income rising 21.3% to $2.289 billion. The company's broad-based revenue growth, strategic capital management, and robust financial performance have contributed to its recent success. Additionally, a price target raise to C$154 from C$150 by CIBC and an upgrade to a Buy rating by a leading analyst firm reflect growing optimism about the company's earnings prospects.

1.c. Company Highlights

2. BMO Financial Group's Q3 2025 Earnings: A Strong Performance

BMO Financial Group reported a robust Q3 2025, with net income reaching $2.4 billion and EPS of $3.23, beating analyst estimates of $2.97. Pre-provision pretax earnings rose 13% to $4 billion, driven by significant contributions from every operating group. The bank's CET1 ratio stood strong at 13.5%, providing ample flexibility to deploy its balance sheet and support client growth. The actual EPS of $3.23 was slightly higher than the reported $3.22.

Publication Date: Aug -27

📋 Highlights
  • Strong Q3 2025 Earnings:: Net income of $2.4 billion and EPS of $3.23, with pre-provision pretax earnings up 13% to $4 billion.
  • Capital Strength:: CET1 ratio of 13.5% and improved ROE to 12%, reflecting disciplined risk management and strategic growth initiatives.
  • US Loan Growth Outlook:: Expected recovery in H2 2025 driven by commercial and wholesale markets, with 15% ROE target achievable via profitable growth.
  • Wealth Management Expansion:: Record revenue and $2.4 billion net new assets, bolstered by the Burgundy acquisition to enhance financial planning capabilities.
  • Credit Risk Mitigation:: Lower provisions and improved credit migration, with PCLs expected to decline as macroeconomic uncertainty reduces.

Segmental Performance

The bank's Canadian Personal Banking segment continued to drive top-tier customer growth, with deep relationships and strong digital and branch performance. Canadian Commercial Banking witnessed broad-based loan and deposit growth, as clients gained clarity on the environment. U.S. P&C demonstrated positive operating leverage through disciplined expense management and balance sheet optimization.

Wealth Management and Capital Markets

BMO Wealth Management delivered a strong quarter, with record revenue in Wealth and Asset Management, driven by continued growth in net new assets. The acquisition of Burgundy Asset Management is expected to further expand BMO's wealth management capabilities. BMO Capital Markets reported strong pre-provision pretax earnings, driven by robust underwriting and advisory fees.

Credit Quality and Provisions

Impaired loan provisions trended down, and the bank remains cautious due to the current tariff announcements and evolving policy environment. Despite this, the bank is adequately provisioned and has strong capital and liquidity levels to manage risks. Piyush Agrawal noted that credit performance is in line with expectations, and the impact of the revised macroeconomic outlook and tariff environment is being closely monitored.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) of 1.39 and a Dividend Yield of 4.23%, BMO Financial Group appears to be reasonably valued. The bank's ROE target of 12% is achievable, driven by sustainable, profitable loan and deposit growth. As the bank continues to invest in digital and AI capabilities, it is well-positioned to drive value in its businesses and for its clients.

Growth Prospects

The bank is optimistic about its ability to grow in the US, driven by its strong customer relationships and investments in technology and talent. Loan growth is expected to recover in the second half of the year and into next year, driven by the bank's strong commercial business and wholesale capital markets. Analysts estimate revenue growth at 3.3% for next year.

3. NewsRoom

Card image cap

Bank of Montreal (BMO) Q4 2025 Earnings Call Highlights: Record Net Income and Strategic Growth ...

Dec -04

Source:

Card image cap

Does BMO’s Upgrade Reveal Old Dominion (ODFL) Has More Durable Pricing Power Than Believed?

Dec -04

Source:

Card image cap

TSX Closer: Sets Fresh Record Close On Improved Commodity Prices and Optimism Around Economy

Dec -04

Source:

Card image cap

Is It Too Late To Consider BMO After Its Strong 37% One Year Rally?

Dec -04

Source:

Card image cap

BMO details strategy to improve US profitability

Dec -04

Source:

Card image cap

TD, BMO and CIBC beats analysts' estimates despite uncertain economy

Dec -04

Source:

Card image cap

Canadian Big Bank Earnings Top Expectations, Raise Dividends

Dec -04

Source:

Card image cap

Jobless Claims Puzzlingly Light, Lowest in 3 Years

Dec -04

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.80%)

6. Segments

Metals & Mining - Gold & Other Precious Metals

Expected Growth: 3.8%

As the global economy grows, demand for precious metals is likely to increase, driving growth in this segment.

7. Detailed Products

Personal Banking

Bank of Montreal offers a range of personal banking services, including chequing and savings accounts, credit cards, loans, and investment products.

Credit Cards

Bank of Montreal offers a variety of credit cards with different features, rewards, and benefits, such as cashback, travel points, and low interest rates.

Mortgages

Bank of Montreal offers a range of mortgage products, including fixed-rate and variable-rate mortgages, with flexible repayment terms and competitive interest rates.

Investments

Bank of Montreal offers a range of investment products, including mutual funds, exchange-traded funds (ETFs), and self-directed investment accounts.

Business Banking

Bank of Montreal offers a range of business banking services, including business chequing and savings accounts, credit cards, loans, and cash management solutions.

Commercial Banking

Bank of Montreal offers a range of commercial banking services, including commercial lending, cash management, and trade finance solutions.

Wealth Management

Bank of Montreal offers a range of wealth management services, including investment advice, portfolio management, and estate planning.

Capital Markets

Bank of Montreal offers a range of capital markets services, including debt and equity underwriting, mergers and acquisitions advisory, and risk management solutions.

8. Bank of Montreal's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Bank of Montreal is medium due to the presence of alternative financial institutions and digital payment systems. However, the bank's strong brand and customer loyalty mitigate this threat to some extent.

Bargaining Power Of Customers

The bargaining power of customers is low for Bank of Montreal due to the lack of switching options and the complexity of banking services. Customers are also loyal to the bank due to its long history and reputation.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for Bank of Montreal due to the bank's large size and negotiating power. The bank is able to negotiate favorable terms with its suppliers.

Threat Of New Entrants

The threat of new entrants is low for Bank of Montreal due to the high barriers to entry in the banking industry. New entrants would need to invest heavily in infrastructure and comply with strict regulations.

Intensity Of Rivalry

The intensity of rivalry is high for Bank of Montreal due to the presence of several large banks in Canada. The bank faces intense competition in terms of pricing, product offerings, and customer service.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 76.36%
Debt Cost 9.88%
Equity Weight 23.64%
Equity Cost 9.88%
WACC 9.88%
Leverage 322.99%

11. Quality Control: Bank of Montreal passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
TD Bank

A-Score: 7.3/10

Value: 5.6

Growth: 6.3

Quality: 4.8

Yield: 8.0

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
JPMorgan Chase

A-Score: 6.7/10

Value: 5.3

Growth: 5.2

Quality: 6.5

Yield: 5.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
BMO

A-Score: 6.7/10

Value: 3.8

Growth: 6.1

Quality: 3.6

Yield: 8.0

Momentum: 8.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Citigroup

A-Score: 6.2/10

Value: 6.7

Growth: 4.7

Quality: 4.4

Yield: 5.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
Bank of America

A-Score: 6.2/10

Value: 5.6

Growth: 5.3

Quality: 5.0

Yield: 5.0

Momentum: 7.5

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
NatBank

A-Score: 6.1/10

Value: 4.0

Growth: 4.7

Quality: 4.9

Yield: 6.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

178.24$

Current Price

178.24$

Potential

-0.00%

Expected Cash-Flows