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Research Alert: CFRA Maintains Hold Opinion On Shares Of Bank Of Montreal

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

We increase our 12-month target price by CAD23 to CAD250, 15.8x our FY 27 (Oct.) EPS view of CAD15.86, a premium to BMO's five-year forward P/E average of 10.3x given expectations for improving efficiency in the bank's U.S. operations. We increase our FY 26 EPS estimate to CAD14.38 from CAD14.19 and FY 27's to CAD15.86 from CAD15.81. BMO has completed its optimization initiatives and should see balance sheet growth improve going forward. However, catching up to peers will take time, given BMO's weak starting position (balances declined Y/Y in 1H FY 26). On a positive note, efficiency improvements are delivering results, with adjusted ROE rising 370 bps to 13.5% in Q2. The underperforming U.S. Banking segment is also improving, with adjusted ROE reaching 9.3% (up 220 bps), and we expect further gains, as this business remains well below its potential. Additionally, the sale of BMO's Transportation and vendor finance businesses should result in an uptick of share repurchases.

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