Analysts Estimate Bank of Montreal (BMO) to Report a Decline in Earnings: What to Look Out for

Analysts anticipate Bank of Montreal (BMO) will report a 3.1% year-over-year decline in earnings to $1.85 per share for the quarter ending April 2025, despite an expected 9.6% increase in revenue to $6.44 billion. The Zacks Earnings ESP, which factors in recent analyst revisions, is negative at -2.34%, suggesting a potential earnings miss; however, BMO holds a Zacks Rank #3, making an earnings surprise difficult to predict conclusively. Bank of Nova Scotia (BNS), another industry player, is also expected to report a decline in earnings.

Analysis

Bank of Montreal (BMO) is anticipated to report a year-over-year earnings decline for the quarter ending April 2025, with consensus estimates projecting earnings per share (EPS) of $1.85, a 3.1% decrease, despite an expected 9.6% rise in revenues to $6.44 billion. The Zacks Consensus EPS estimate has remained stable over the past 30 days. However, a critical indicator, the Zacks Earnings ESP (Expected Surprise Prediction), stands at -2.34% for BMO, reflecting that the Most Accurate Estimate is below the consensus. This negative ESP, coupled with a Zacks Rank #3 (Hold), suggests a reduced likelihood of an earnings beat and indicates recent bearish sentiment among analysts, making a conclusive prediction challenging. Historically, BMO has beaten consensus EPS estimates in only one of the last four quarters, although its most recent reported quarter saw a significant positive surprise of +25.88% ($2.14 actual vs. $1.70 expected). The market's reaction will heavily depend on whether actual results surpass these muted expectations and, crucially, on management's commentary regarding business conditions during the earnings call scheduled for May 28, 2025. Comparatively, industry peer Bank of Nova Scotia (BNS) is also forecasted to report a 2.6% EPS decline to $1.13 on revenues of $6.52 billion (a 6% increase), with a neutral ESP of 0.00% and a Zacks Rank #3 (Hold), suggesting similar headwinds within the foreign banking sector.

Key Decisions for Investors

• Investors should approach Bank of Montreal with caution ahead of its May 28, 2025 earnings release, given the consensus expectation for an earnings decline and a negative Earnings ESP which signals potential for a miss.
• Closely monitor BMO's reported EPS against the $1.85 estimate and revenue against the $6.44 billion projection, paying particular attention to management's forward guidance and qualitative discussion of business conditions on the earnings call, as these will be key determinants of future stock performance.
• Consider the broader context of the foreign banking sector, as evidenced by Bank of Nova Scotia's similar projected earnings decline, when assessing individual stock positions and potential sector-wide pressures.