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Bank of Montreal (BMO) Gains But Lags Market: What You Should Know

·3 min read

Bank of Montreal (BMO) closed at $96.97 in the latest trading session, marking a +0.83% move from the prior day. The stock lagged the S&P 500's daily gain of 1.06%. At the same time, the Dow added 1.05%, and the tech-heavy Nasdaq gained 0.4%.

Prior to today's trading, shares of the bank had lost 12.58% over the past month. This has lagged the Finance sector's loss of 9.62% and the S&P 500's loss of 8.3% in that time.

Investors will be hoping for strength from Bank of Montreal as it approaches its next earnings release. The company is expected to report EPS of $2.45, down 12.5% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.38 billion, down 12.63% from the prior-year quarter.

BMO's full-year Zacks Consensus Estimates are calling for earnings of $10.43 per share and revenue of $21.55 billion. These results would represent year-over-year changes of +1.16% and -0.36%, respectively.

It is also important to note the recent changes to analyst estimates for Bank of Montreal. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Bank of Montreal is currently a Zacks Rank #3 (Hold).

In terms of valuation, Bank of Montreal is currently trading at a Forward P/E ratio of 9.22. This represents a premium compared to its industry's average Forward P/E of 8.19.

Investors should also note that BMO has a PEG ratio of 1.29 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BMO's industry had an average PEG ratio of 0.78 as of yesterday's close.

The Banks - Foreign industry is part of the Finance sector. This group has a Zacks Industry Rank of 92, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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