Bank of Montreal is scheduled to release third-quarter earnings before Tuesday’s market open, with analysts projecting a 16% year-over-year increase in earnings per share to CAD 3.74. Revenue is forecast to reach CAD 9.70 billion, up 7.9% from the prior-year period and 1.4% sequentially.
The bank’s Q2 performance exceeded expectations, with reported EPS of CAD 3.67 surpassing the consensus estimate of CAD 3.42 by 7.3%. Revenue for the quarter totaled CAD 9.57 billion, beating forecasts by 1.6% and contributing to a rally that brought shares near their 52-week high of CAD 187.22. Over the past twelve months, BMO has reported 17% growth in operating income.
BMO’s valuation remains elevated, trading at 18.1 times trailing earnings and 16.4 times forward earnings, reflecting its status as a CAD 122 billion lender. The bank has also expanded into structured products, launching 3× leveraged exchange-traded notes tied to corporate bonds.
Corporate restructuring continues, with BMO announcing the sale of its Moneris payments joint venture to Francisco Partners for CAD 2 billion. The divestiture follows a broader shift in strategy as Canada’s mortgage reset cycle pressures traditional lending margins, prompting banks to emphasize higher-margin, fee-based revenue streams.
Analysts at CIBC downgraded BMO to Neutral from Outperformer late last week, citing the stock’s strong performance. EPS estimates have risen 1.64% over the past 60 days, while revenue forecasts increased 0.53% in the past week.
