National Bank Hikes Bank of Montreal Target to C$205, Q1 Profit Hits C$2.55B
National Bank raised Bank of Montreal's price target to C$205 from C$186 while keeping a Sector Perform rating. Bank of Montreal reported Q1 adjusted profit of C$2.55 billion, EPS C$3.48, record revenue, 16% wealth management and 11% capital markets earnings growth, 13% U.S. and 8% Canada net income growth.
1. Price Target Increase
On February 26 National Bank analyst Gabriel Dechaine raised Bank of Montreal’s price target to C$205 from C$186 while maintaining a Sector Perform rating.
2. First-Quarter Financial Results
Bank of Montreal reported adjusted profit of C$2.55 billion for the quarter ended January 31, up from C$2.29 billion in the prior period, and delivered EPS of C$3.48 alongside record revenue across all business segments supported by lower loan loss provisions.
3. Segment Earnings Growth
Adjusted earnings in wealth management rose 16% and in capital markets 11%, while U.S. operations cut bad loan exposure, closed branches and shifted towards higher-margin commercial lending to drive 13% adjusted net income growth, and Canadian net income grew 8%.
4. Outlook and Balance Sheet Optimization
CEO Darryl White said balance sheet optimization will be complete by the end of next quarter, paving the way for positive commercial loan growth in the second half of the year as strong deal pipelines and U.S. economic strength underpin expansion.