02:52 PM EDT, 05/29/2024 (MT Newswires) -- BMO reported second-quarter adjusted EPS of $2.59 vs. NBF $2.69 and consensus $2.76.

Key Takeaways:

BMO reported a weak quarter, as expected, writes National Bank's Gabriel Dechaine. The main drag on the quarter was credit performance. PCLs were 30% above NBF forecast on the back of a 24% sequential increase in Gross Impaired Loans (GILs), the second big spike over the past three quarters. This forced the bank to re-set credit performance expectations, with BMO guiding to a similar level of loan losses delivered this quarter (i.e., 44bps total/41bps impaired) over the next few quarters.

"Assuming credit performance is maintained at these levels, and operational performance improves as it has since a disappointing Q1/24, we believe short-term stock upside potential is relatively attractive."

BMO is rated Outperform. Target cut to $136, from $143.

Price: 120.89, Change: -10.21, Percent Change: -7.79