BMO Stock Forecast & Price Target

Bank of Montreal is supported by broad-based execution, with Q3/F26 core cash EPS of $3.96 beating expectations and each major segment delivering record PTPP earnings, while ROE improved to 14.0% and moved closer to management’s 15.0%+ target. The outlook is further strengthened by the U.S. banking franchise, where commercial lending momentum, mid-single-digit loan growth guidance, and lower PCLs point to improving earnings quality, while Capital Markets and Wealth continue to benefit from strong market-sensitive businesses. Credit trends are also constructive, as total PCLs fell to $739 million and the impaired PCL ratio guidance of mid-40s bps implies a path toward mid-30s bps by the end of 2027, supporting higher earnings across the bank.

Bank of Montreal is facing a negative outlook because its Canadian consumer credit metrics are deteriorating, with 90+ day delinquencies rising 4 bps QoQ and 13 bps YoY, led by mortgage delinquencies up to 51 bps and personal loans at 61 bps. Although Q2/26 PCLs of $739 million were below estimates and the impaired PCL ratio was only 0.45%, the write-up highlights a recessionary downside in North America, muted loan growth, and limited further benefit from PCL normalization. Its core ROE was 12.2% in 2025 versus a 15% medium-term target, while the CET 1 ratio fell to 13.0% in Q2/26 and is modeled to be the lowest in the group by Q3/26, with corporate core losses still expected to persist.