BMO Stock Forecast & Price Target

Bank of Montreal's performance metrics indicate a robust financial position, with performing allowance for credit losses (ACLs) as a proportion of gross loans at 0.56%, representing a notable improvement of 9 basis points year-over-year and surpassing pre-pandemic levels. The bank experienced a remarkable increase in trading revenues, growing approximately 67% quarter-over-quarter and 77% year-over-year, driven by strong performance in both equities and fixed income, currencies, and commodities (FICC) trading. Additionally, capital markets earnings surged approximately 119% quarter-over-quarter and 45% year-over-year, reaching $591 million and significantly exceeding expectations, further underpinning the bank's positive outlook.

The Bank of Montreal reported a total provision for credit losses (PCLs) of $1,011 million in Q1/25, representing a significant decline of approximately 34% quarter-over-quarter and falling short of expectations. Impaired PCLs also decreased to $859 million, down about 22% from the previous quarter, highlighting ongoing concerns about credit quality. Furthermore, the decrease in performing PCLs to $152 million from $416 million last quarter raises red flags regarding the bank's underlying asset performance and potential future profitability challenges.