BMO Stock Forecast & Price Target

Bank of Montreal demonstrates a robust financial performance with performing allowance for credit losses (ACLs) at 0.56% of gross loans, reflecting a significant year-over-year increase that exceeds industry peers and surpasses pre-pandemic levels. The bank's capital markets segment has shown remarkable growth, with earnings rising approximately 119% quarter-over-quarter and 45% year-over-year, reaching $591 million, which significantly outperformed estimates. Additionally, enhanced earnings projections indicate strong forward momentum, with core earnings per share (EPS) estimates rising to $11.27 in 2025 and $13.04 in 2026, underscoring the bank's positive financial trajectory.

The Bank of Montreal reported a total provision for credit losses (PCLs) of $1,011 million in Q1/25, marking a significant decline of approximately 34% quarter-over-quarter, and falling short of the projected $1,396 million. Impaired PCLs also decreased to $859 million, approximately 22% lower than the expectations of $1,057 million, contributing to concerns about the bank's credit quality. Additionally, the decline in performing PCLs to $152 million, from $416 million in the previous quarter, further underscore the ongoing challenges in the bank's credit performance metrics.