Bank of Montreal (BMO) is growing its core business segments and producing steady results in the very challenging financial sector.

Company Description

Bank of Montreal operates as a financial institution specializing in retail banking and other various financial services in North America and Internationally. The company was founded in 1817 and has a market cap of $28 billion.

Bank of Montreal’s share price has basically been on fire for the few months, climbing from $19 to a recent high above $50. The company’s solid first-quarter results, reported on May 26, were better then expected in spite of the precarious financial-sector landscape.

Second-Quarter Results

Earnings came in at 80 cents per share besting the Zacks Consensus Estimate of 71. A couple of the Banks largest and most important segments did well. It’s personal and commercial banking looked strong, with income up 30% from last year to $350 million. Capital Markets also gained, up 33% to $249 million.

Estimates

After word of the quarter hit the Street, estimates jumped higher. The current year added 15 cents and moved to $3.67.

That means that in spite of the big run up, this stock has a P/E multiple of 13,5X, a discount to the overall market. The next-year estimate is projecting 2% growth, but the financial sector has been volatile, this number could swing big in either direction.

The Chart

Shares of BMO have surged back to the 18-month high, a key long-term level. Take a look below.

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