Desjardins Reaffirms Hold Rating on Bank of Montreal with $165 Price Target

Desjardins reaffirms their Hold rating on Bank Of Montreal with a price target of C$165.00. Analyst Douglas Young, with a 5-star rating and 71.12% success rate, maintains a Hold rating on the bank. Bank Of Montreal reported a quarterly revenue of $19.24 billion and a net profit of $1.96 billion in its latest earnings release.

Bank of Montreal (BMO) reported its third-quarter earnings, beating analyst expectations and prompting a positive market reaction. The bank's adjusted earnings per share (EPS) for the quarter ended July 31, 2025, were C$3.23, surpassing the average analyst estimate of C$2.96 and representing a year-over-year increase from C$2.64 [1]. The bank's adjusted revenue for the quarter was C$8.99 billion, up from C$8.68 billion in the previous quarter and C$8.21 billion a year ago, exceeding the consensus estimate of C$8.89 billion [1].

Key drivers of BMO's performance were robust growth in its personal and commercial banking, wealth management, and global markets and investment banking segments. The bank's net interest income climbed to C$5.50 billion, a significant improvement from C$5.10 billion in the previous quarter and C$4.81 billion a year ago. The adjusted net interest margin, excluding trading and insurance, rose to 1.99% from 1.97% in the prior quarter and 1.83% in the same quarter of 2024 [1]. Notably, the bank's noninterest revenue was C$3.49 billion, down from C$3.58 billion in the previous quarter but up from C$3.40 billion a year ago. Credit losses provisions totaled C$797 million, lower than the C$917.8 million consensus estimate and down from C$1.05 billion in the previous quarter [1]. The adjusted return on equity (ROE) climbed to 12.0% from 9.8% in the prior quarter and 10.6% in the same quarter of 2024 [1].

The Canadian Personal & Commercial Banking unit saw adjusted net income of C$870 million, an 11% quarter-over-quarter increase and a 5% year-over-year decline. The U.S. Personal & Commercial Banking unit reported adjusted net income of US$560 million, a 29% quarter-over-quarter increase and a 42% year-over-year increase. BMO Wealth Management's adjusted net income grew 21% quarter-over-quarter and year-over-year to C$441 million, while BMO Capital Markets' adjusted net income rose 1% quarter-over-quarter and 12% year-over-year to C$442 million [1]. The bank's stock price rose 0.6% in premarket trading on Tuesday following the announcement.

Analysts from RBC Capital and Scotiabank maintained an Outperform and Sector Perform rating, respectively, and raised their price targets for BMO shares [2]. The bank's performance in the U.S. division was particularly strong, with net income at the U.S. personal and commercial banking operation totaling C$709 million, up 51% from a year earlier and exceeding the C$648 million average [1].

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L8N3UI0VO:0-bank-of-montreal-reports-results-for-the-quarter-ended-july-31-earnings-summary/
[2] https://www.marketbeat.com/instant-alerts/bank-of-montreal-tsebmo-receives-average-recommendation-of-hold-from-analysts-2025-08-23/