Abstract

Bank of Montreal is scheduled to report fiscal first-quarter results on February 25, 2026 Pre-Market, with consensus pointing to higher revenue and earnings versus the prior year; this preview outlines last quarter’s scorecard, segment dynamics, and the chief debates into the print.

Market Forecast

Based on the latest quarter-ahead estimates, Bank of Montreal is projected to deliver revenue of $9.35 billion this quarter, up 9.15% year over year, EBIT of $3.81 billion, up 13.15% year over year, and adjusted EPS of $3.23, up 35.43% year over year. Margin forecasts are not indicated, though the prior quarter’s net profit margin was 26.65%, suggesting investors will watch for stability around profitability while EPS growth runs ahead of revenue on operating leverage. Management’s core banking engines are expected to continue driving the bulk of revenue, supported by balanced momentum across personal and commercial lending and services, while fee-based streams help diversify earnings. Within the portfolio, BMO Capital Markets appears well-positioned to contribute a larger share if deal activity and client trading normalize, with last quarter’s allocation implying approximately $1.92 billion; year-over-year trends for this segment were not disclosed.

Last Quarter Review

Bank of Montreal’s previous quarter delivered revenue of $9.34 billion (up 11.63% year over year), a gross profit margin not disclosed, GAAP net profit attributable to shareholders of $2.29 billion, a net profit margin of 26.65%, and adjusted EPS of $3.28 (up 72.63% year over year). A key highlight was the across-the-board beat versus internal and external benchmarks, with revenue and adjusted EPS both exceeding prior estimates, reflecting a combination of expense discipline and better-than-anticipated income trends. Main business highlights show a balanced revenue mix last quarter: Canadian Personal and Commercial Banking approximately $3.16 billion, US Personal and Commercial Banking approximately $2.96 billion, BMO Capital Markets approximately $1.92 billion, and BMO Wealth Management approximately $1.37 billion; year-over-year figures by segment were not disclosed.

Current Quarter Outlook (with major analytical insights)

Main banking franchise: revenue resilience and earnings leverage

The personal and commercial banking businesses remain the backbone of Bank of Montreal’s quarterly earnings profile. With total revenue projected at $9.35 billion, consensus expects year-over-year growth driven primarily by steady balance-sheet volumes combined with disciplined pricing and an improving product mix. As deposit betas normalize and funding costs plateau, the near-term path for net interest income appears constructive, even if asset yields roll modestly with the rate environment. In this setup, management’s control of operating expenses and credit provisions should be the pivotal swing factors for translating revenue growth into outsize EPS expansion this quarter. On credit, investor attention will center on the behavior of provisions for credit losses across consumer and commercial portfolios in Canada and the United States. Incremental deterioration in a handful of corporate exposures or late-cycle consumer credit softness could dilute margin stability, while relatively benign trends would amplify the earnings impact of revenue growth. Given that the prior quarter’s net profit margin stood at 26.65%, a similar or slightly tighter margin alongside higher revenue could still yield a meaningful year-over-year EPS increase due to operating leverage. Fee income from day-to-day banking services and ancillary products should also help smooth any modest swings in net interest income as the rate cycle evolves. Within expenses, management’s efficiency measures are another critical driver into this print. A sustained focus on automation, branch optimization, and technology-enabled operations has the potential to offset wage inflation and compliance costs. If expense run-rates remain contained, the gap between revenue and cost growth should widen enough to support the consensus call for EPS to rise 35.43% year over year to $3.23. The most constructive outcome for shares would be a combination of stable credit, contained costs, and broadly steady margins, which collectively create a path for continued double-digit EBIT growth (consensus 13.15% year over year to $3.81 billion).

Most promising business line: capital markets and fee-based momentum

The capital markets franchise stands out as a potential positive swing factor this quarter given the improving tone in underwriting and advisory pipelines. Last quarter’s revenue allocation implies approximately $1.92 billion, and while segment-level year-over-year growth was not disclosed, the setup favors incremental gains if issuance volumes and client activity keep normalizing from last year’s subdued base. In addition to deal fees, sales and trading could support noninterest revenue if client hedging and positioning remain active amid macro rotations. Wealth management, which contributed roughly $1.37 billion last quarter on an allocation basis, adds torque from asset-based fees that typically benefit from improved market levels and net asset inflows. If markets remain supportive through the quarter and advisory engagement stays firm, positive fee momentum can complement core banking income and reduce volatility in the overall revenue mix. Together, these fee-driven platforms offer countercyclical balance to interest-sensitive lines, which is particularly useful if net interest margins face incremental pressure as the year progresses. For investor sentiment, the degree of visibility management provides on the capital markets backlog and wealth fee trajectory can be as important as the headline numbers. A constructive qualitative update, even absent point estimates, would strengthen confidence in sustained double-digit EBIT growth and lend support to the consensus view that EPS can step higher from the $3.28 reported last quarter toward the $3.23 estimate this quarter and potentially beyond. Conversely, any indication of a weaker start to the advisory calendar or a pause in client activity would be quickly reflected in expectations.

Key stock-price drivers this quarter: credit costs, margins, and operating discipline

Into the print, the elements most likely to move the shares are the shape of credit costs, the stability of margins, and the strictness of expense control. On credit, even modest changes in provisions for credit losses can induce a disproportionate impact on quarterly EPS, especially when revenue growth is in line with expectations. A benign outcome with disciplined underwriting should preserve the path to a 35.43% year-over-year EPS increase this quarter; any uptick in net charge-offs or impaired loans would raise questions around the durability of that trajectory. Margin commentary will be closely parsed as investors gauge how deposit pricing, funding mix, and asset yields balance under current rates. While the company’s net profit margin was 26.65% last quarter, the sustainability of that level depends on the interplay between net interest margin, trading spreads in markets businesses, and fee realizations in wealth. If management indicates that funding pressures are plateauing and that asset yields remain healthy, the setup favors margin containment even as competition for deposits remains an ongoing consideration. Operating discipline is the third pillar. With consensus calling for revenue of $9.35 billion and EBIT of $3.81 billion this quarter, the implied operating leverage assumes expenses are kept in check. Commentary around technology investments, process optimization, and headcount will matter for how investors calibrate the run-rate efficiency ratio. A reiterated commitment to measured expense growth, alongside a clear framework for capital allocation and potential buyback capacity later in the year, would likely be taken positively by the market.

Analyst Opinions

Across updates published between January 1 and February 18, 2026, bullish views outweigh bearish ones, with recent rating actions showing at least one Buy and no Sells among widely followed institutions. Notably, CIBC maintained a Buy rating on Bank of Montreal in mid-February with a price target of C$209.00, underscoring confidence that earnings growth can outpace revenue as operating leverage improves and cost discipline persists. The bullish argument emphasizes several points relevant to this quarter’s setup. First, consensus expects revenue to rise 9.15% year over year to $9.35 billion while adjusted EPS climbs 35.43% to $3.23, implying margin resilience and operating leverage that are more favorable than last year’s baseline. Second, the prior quarter’s performance delivered beats on both revenue and EPS, offering a recent proof point that management’s expense and credit controls can translate top-line growth into outsized bottom-line gains. Third, the fee-based diversification from capital markets and wealth provides an additional support to earnings quality, which can help smooth quarter-to-quarter variability when net interest margins fluctuate. On valuation drivers into the print, bullish analysts highlight the catalysts of steady credit, stable margins, and controlled expenses as reasons to expect an in-line or better outcome versus consensus. They also note that an incremental improvement in capital markets deal flow or a supportive market backdrop for wealth fees would provide upside bias to noninterest income. Conversely, while neutral opinions acknowledge execution risks around credit and funding costs, the absence of newly articulated bearish theses or formal Sell ratings in the cited period reinforces the view that risk-reward remains balanced-to-positive into the event. With that backdrop, the majority bullish stance rests on the premise that Bank of Montreal can meet or modestly exceed the $9.35 billion revenue and $3.23 EPS thresholds, aided by disciplined operations and a constructive mix of interest and fee income streams.