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Bank of Montreal BMO

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Morningstar’s Analysis

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Good Start to 2021 for BMO With Strong Q1 Results

Eric Compton, CFA Senior Equity Analyst

Analyst Note

| Eric Compton, CFA |

Narrow-moat-rated Bank of Montreal reported solid fiscal first-quarter earnings. Adjusted earnings per share were CAD 3.06, soundly beating FactSet consensus of CAD 1.69. This represented year-over-year EPS growth of 27%, as revenue growth has returned while expenses were down. Provisioning was also back to its lowest level since early 2019. This largely aligns with our view that the Canadian banks will be fine and that better results should be returning in 2021. We are increasing our fair value estimate to CAD 109/$86 per share from CAD 105/$81. As the pandemic has further played out and we are more confident in vaccine distribution and economic resilience, we are also lowering our uncertainty rating for Bank of Montreal back to medium from high.

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Company Profile

Business Description

Bank of Montreal is a diversified financial-services provider based in North America, operating four business segments: Canadian personal and commercial banking, U.S. P&C banking, wealth management, and capital markets. The bank's operations are primarily in Canada, with a material portion also in the U.S.

129 rue Saint-Jacques
Montreal, QC, H2Y 1L6, Canada
T +1 416 867-7366
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings Jan 31, 2021
Fiscal Year End Oct 31, 2021
Stock Type
Employees 43,360