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What's in the Offing for Bank of Montreal (BMO) Q2 Earnings?
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Bank of Montreal (BMO - Free Report) is slated to announce second-quarter fiscal 2021 (ended Apr 30) results on May 26, before the opening bell. The company’s earnings are expected to have witnessed substantial year-over-year growth.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate and also increased from the prior-year quarter figure. An improvement in revenues, lower provisions and a decline in expenses supported results.
Bank of Montreal has a decent earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with the average surprise being 15.48%.
The Zacks Consensus Estimate for earnings has moved 11.8% north over the past seven days to $2.18 per share, which indicates a jump 186.8% from the prior-year reported number.
Before we take a look at what our quantitative model predicts, let’s check out the factors that are expected to have impacted Bank of Montreal’s fiscal second-quarter performance.
Factors at Play
Net Interest Income (NII): Overall demand for loans was weak in the February-April quarter, mainly due to declining commercial lending. This, along with a low interest rate environment, is expected to have hampered the company’s NII growth.
Investment Banking Fees: As economic and business activities have started to gradually resume, deal making continued to gain pace in the to-be-reported quarter. Thus, with an increase in global M&A volumes, Bank of Montreal’s advisory fees are likely to have been positively impacted.
Also, IPO activities were high in the to-be-reported quarter. Further, as companies continued to build liquidity to tide over the pandemic-induced crisis, there was a rise in follow-up equity issuances. Moreover, bond issuance volumes were strong as companies took this as an opportunity to bolster their balance sheets. Hence, growth in Bank of Montreal’s underwriting fees is likely to have been decent in the fiscal second quarter.
Trading Revenues: Driven by persistent uncertainty over economic growth, equity markets witnessed a significant rise in volatility and higher client activity in the fiscal second quarter. Also, fixed income markets’ performance remained strong amid concerns related to inflation. Hence, its equity and fixed income markets’ revenues are expected to have improved in the to-be-reported quarter.
Provisions: Bank of Montreal, having already built large reserves owing to deterioration in the macro-economic backdrop in fiscal 2020, is less likely to have recorded a substantial increase in provision for loan losses in the fiscal second quarter.
What Our Model Predicts
We cannot conclusively predict that Bank of Montreal will beat the Zacks Consensus Estimate this time around. This is because it doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Toronto-Dominion is 0.00%.
Royal Bank of Canada (RY - Free Report) , Canadian Imperial Bank of Commerce (CM - Free Report) and The Toronto-Dominion Bank (TD - Free Report) are scheduled to announce quarterly numbers on May 27.
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The only question is “Will you get into the right stocks early when their growth potential is greatest?”
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What's in the Offing for Bank of Montreal (BMO) Q2 Earnings?
Bank of Montreal (BMO - Free Report) is slated to announce second-quarter fiscal 2021 (ended Apr 30) results on May 26, before the opening bell. The company’s earnings are expected to have witnessed substantial year-over-year growth.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate and also increased from the prior-year quarter figure. An improvement in revenues, lower provisions and a decline in expenses supported results.
Bank of Montreal has a decent earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with the average surprise being 15.48%.
Bank Of Montreal Price and EPS Surprise
Bank Of Montreal price-eps-surprise | Bank Of Montreal Quote
The Zacks Consensus Estimate for earnings has moved 11.8% north over the past seven days to $2.18 per share, which indicates a jump 186.8% from the prior-year reported number.
Before we take a look at what our quantitative model predicts, let’s check out the factors that are expected to have impacted Bank of Montreal’s fiscal second-quarter performance.
Factors at Play
Net Interest Income (NII): Overall demand for loans was weak in the February-April quarter, mainly due to declining commercial lending. This, along with a low interest rate environment, is expected to have hampered the company’s NII growth.
Investment Banking Fees: As economic and business activities have started to gradually resume, deal making continued to gain pace in the to-be-reported quarter. Thus, with an increase in global M&A volumes, Bank of Montreal’s advisory fees are likely to have been positively impacted.
Also, IPO activities were high in the to-be-reported quarter. Further, as companies continued to build liquidity to tide over the pandemic-induced crisis, there was a rise in follow-up equity issuances. Moreover, bond issuance volumes were strong as companies took this as an opportunity to bolster their balance sheets. Hence, growth in Bank of Montreal’s underwriting fees is likely to have been decent in the fiscal second quarter.
Trading Revenues: Driven by persistent uncertainty over economic growth, equity markets witnessed a significant rise in volatility and higher client activity in the fiscal second quarter. Also, fixed income markets’ performance remained strong amid concerns related to inflation. Hence, its equity and fixed income markets’ revenues are expected to have improved in the to-be-reported quarter.
Provisions: Bank of Montreal, having already built large reserves owing to deterioration in the macro-economic backdrop in fiscal 2020, is less likely to have recorded a substantial increase in provision for loan losses in the fiscal second quarter.
What Our Model Predicts
We cannot conclusively predict that Bank of Montreal will beat the Zacks Consensus Estimate this time around. This is because it doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Toronto-Dominion is 0.00%.
Zacks Rank: The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Canadian Banks
Royal Bank of Canada (RY - Free Report) , Canadian Imperial Bank of Commerce (CM - Free Report) and The Toronto-Dominion Bank (TD - Free Report) are scheduled to announce quarterly numbers on May 27.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>