BMO Stock Forecast & Price Target

Bank of Montreal is demonstrating a stronger fundamental profile as Q3/F26 core cash EPS of $3.96 beat expectations, revenue came in ahead, and lower PCLs helped offset higher expenses. Its main franchises are contributing broadly, with Capital Markets and Wealth Management delivering very strong market-sensitive results, while U.S. personal and commercial banking showed improving loan momentum and better credit performance, supporting record PTPP earnings across all business lines. Rising ROE to 14.0%, closer to the 15.0% target exiting F2027, along with lower impairment charges and improving efficiency, reinforces confidence in sustained earnings traction through F2027.

Bank of Montreal is facing a negative outlook because its credit profile remains pressured, with Q2/26 gross impaired loans at 1.01% and Canadian consumer delinquencies rising, especially mortgages and personal loans, even as total PCLs of $739 million only temporarily beat estimates. Core NIM ex-Global Markets and Insurance fell 4 bps sequentially to 2.29%, and weaker Canada P&C revenue and higher low-yielding treasury assets suggest earnings power is being constrained despite some deposit and ladder-reinvestment support. Although 2027 modeled impaired PCLs improve to 38 bps and non-interest expense estimates are trimmed, persistent Corporate losses, US/Canada housing risk, and macro downside from a deep recession keep fundamental risk elevated.