Bank of Montreal downgraded to Sector Perform from Outperform at RBC Capital

RBC Capital analyst Darko Mihelic downgraded Bank of Montreal to Sector Perform from Outperform with a price target of C$118, down from C$124. Following an analyst of BMO‘s credit results relative to its U.S. peers, the firm lowered earnings estimates and the stock’s target multiple. Even after normalizing BMO’s Q2 credit result for “idiosyncratic/outlier” losses, the bank’s credit deterioration appears to be occurring at a faster pace than its U.S. peers despite having a similar loan mix, the analyst tells investors in a research note. Furthermore, BMO seems to be alone in flagging higher provision for credit losses guidance for the second half of 2024, adds RBC.