BMO Q3 Earnings Preview: What to Watch

Bank of Montreal (BMO), the fourth largest bank in Canada, will kick off Canada’s Big Banks Q3 earnings reporting on Tuesday. Over the past year, the stock has jumped by nearly 70%, and is currently trading close to C$130.

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Strong earnings could drive BMO stock price higher, so let’s have a look at what analysts are expecting.

Analysts on average expect BMO to report adjusted earnings of C$2.93 per share in Q3 2021, which would represent a growth of 58.4% from the prior-year quarter (C$1.85 per share). The estimated revenue is C$6.3 billion, indicating an increase of 5% from C$6 billion in the third quarter of 2020. BMO didn’t beat EPS estimates in its last quarter.

Investors will be looking for signs of loan growth, the impact of the COVID-19 Delta variant, and clues about what the bank might do with its cash reserves. (See Bank of Montreal stock charts on TipRanks)

Last week, Scotiabank analyst Meny Grauman maintained a Buy rating on BMO while raising its price target to C$147.00 (from C$138.00). This implies 13.1% upside potential.

Grauman expects “a more modest pace of reserve releases” as management teams focus on more pessimistic credit scenarios.

The rest of the Street is cautiously optimistic about BMO, with a Moderate Buy consensus rating based on seven Buys, two Holds, and one Sell. The average Bank of Montreal price target of C$137.22 implies 6.7% upside potential to current levels.

TipRanks’ Smart Score

BMO scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform the overall market.