BMO Q1 Earnings Preview: What to Expect

Bank of Montreal (TSE: BMO) (NYSE: BMO) will report 2022 first-quarter financial results on March 1 before the opening bell.  

Stock Performance 

Year-to-date, the bank stock has jumped by 5.5% and is currently trading close to C$146.

Analyst Estimates 

Analysts on average expect BMO to report adjusted earnings of C$3.28 per share in Q1 2022, which would represent a growth of 7.2% from the prior-year quarter (C$3.06 per share). The estimated revenue is C$6.64 billion, indicating a decrease of 4.9% from C$6.98 billion in the first quarter of 2021.

BMO has beaten estimates in each of the past six quarters.

Points to Watch 

With the end of the pandemic era monetary policy, rising interest rates hikes are a key factor watched by analysts. Once achieved, rate hikes should have a major positive effect on net interest income and margins

Notoriously volatile capital markets earnings are expected to be significantly lower in the quarter.

Spending will likely have increased, due to wage growth, inflation, and capital outflows as banks invest heavily in technology.

Wall Street’s Take 

On February 23, National Bank Financial analyst Gabriel Dechaine kept a Buy rating on BMO and raised the price target to C$163 (from C$151). This implies 11.7% upside potential.  

The rest of the Street is bullish on BMO with a Strong Buy consensus rating based on nine Buys and two Holds. The average Bank of Montreal price target of C$164.29 implies 12.6% upside potential to current levels.   

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