CIBC World Markets Upgrades Bank of Montreal to Strong-Buy

CIBC World Markets has officially upgraded the shares of Bank of Montreal (NYSE:BMO – Free Report) from a hold rating to a strong-buy rating, as noted in a research report released on Friday.

This change in rating comes as part of a series of assessments made by various equity research analysts regarding Bank of Montreal. For instance, Bank of America had previously lowered its rating on the bank's shares from "buy" to "neutral," adjusting their price target from $134.00 to $117.00 on August 28. Similarly, Barclays also revised their price target for Bank of Montreal from $132.00 to $126.00, categorizing the stock as "overweight." Furthermore, Scotiabank elevated its rating for Bank of Montreal from "sector perform" to "sector outperform" in a research note published on the same day.

On the same date, Royal Bank of Canada reaffirmed its "sector perform" rating, raising its price objective for Bank of Montreal shares to $133.00, up from a previous target of $106.00. Conversely, StockNews.com downgraded Bank of Montreal from a "hold" to a "sell" rating in a report dated August 29. Currently, the overall consensus includes one analyst rating the stock as a sell, seven as hold, four as buy, and one placing a strong buy on the bank.

Performance Overview

As of Friday, shares of Bank of Montreal opened at $103.39. The bank has showcased a stable performance with a 50-day simple moving average of $93.33 and a 200-day simple moving average of $88.36. The current market capitalization of the bank stands at approximately $75.43 billion, with a price-to-earnings (P/E) ratio of 14.81. The company's P/E ratio for growth (P/E/G) is noted at 2.59, and it has a beta value of 1.10. Bank of Montreal's financial metrics include a current ratio of 0.98, a quick ratio of 0.98, and a debt-to-equity ratio of 0.13. On the stock's performance, it has recorded a yearly low of $76.98 and a yearly high of $104.63.

Dividend Announcement

Recently, Bank of Montreal disclosed plans to increase its quarterly dividend, scheduled for payment on February 26. Shareholders on record by January 30 will receive a dividend of $1.1329 per share, marking an increment from the previous quarter’s dividend of $1.12. With this adjustment, shareholders can expect an annualized dividend of $4.53, resulting in a dividend yield of 4.38%. Currently, the bank's dividend payout ratio stands at 65.62%.

Institutional Investment Insights

Institutional investors have shown active interest in Bank of Montreal's stock, with several notable changes in their holdings. For instance, Pathway Financial Advisers LLC dramatically increased its stake by 2,701.7% in the third quarter, acquiring an additional 29,367 shares and totaling 30,454 shares. Newport Trust Company LLC also reported a 1.1% increase in its holdings during the second quarter, resulting in 1,411,695 shares valued at $118,371,000. Similarly, Intact Investment Management Inc. expanded its stake by 72.9% during the third quarter, amassing 588,209 shares worth $53,082,000 after acquiring an additional 248,098 shares.

Fiera Capital Corp reported a 2.1% increase in its stake during the second quarter, totaling 3,403,431 shares valued at $285,789,000. Cardinal Capital Management Inc. raised its position by 4.9%, with 1,298,627 shares valued at $117,326,000. Overall, institutional investors now collectively hold approximately 45.82% of Bank of Montreal's stock.

Company Overview

Bank of Montreal primarily provides diversified financial services across North America. Its operational segments include Canadian P&C, U.S. P&C, BMO Wealth Management, and BMO Capital Markets. The company offers a variety of personal banking products such as deposits, mortgages, home lending, consumer credit, small business lending, and credit cards, alongside commercial banking services that encompass multiple financing options and risk management solutions.

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