Bank of Montreal (NYSE: BMO) Stock Analysis: Raymond James Outperform Rating vs. DCF Valuation

Font: Financial Modeling Prep  • May 12, 2026

• Raymond James reiterates an "Outperform" rating for Bank of Montreal (NYSE: BMO), raising its price target to C$227.00.
• A Discounted Cash Flow (DCF) analysis suggests Bank of Montreal may be overvalued, with an estimated intrinsic value of $109.00 compared to its current price of $153.00.
• Bank of Montreal is strategically selling businesses to enhance capital efficiency and improve its Return on Equity (ROE).

On May 12, 2026, analyst firm Raymond James reiterated its "Outperform" rating for Bank of Montreal (NYSE: BMO). Bank of Montreal is one of Canada's largest banks, offering a wide range of financial services. These include personal and commercial banking, wealth management, and capital markets operations across North America, solidifying its position in the Canadian banking sector.

The firm also raised its price target on BMO to C$227.00 from C$214.00. At the time of this update, the stock’s price was $151.44. This new target suggests the analyst sees significant investment potential for the stock's price to increase from its current levels, reflecting positive equity research.

However, a discounted cash flow (DCF) analysis by GuruFocus presents a different view. A DCF estimates a company's value based on its future cash flows. The analysis suggests BMO may be overvalued, with its current price of around $153.00 exceeding its estimated intrinsic value of $109.00.

This positive analyst outlook aligns with recent strategic moves by BMO. The bank announced the sale of its transportation and vendor-finance businesses to Stonepeak, as highlighted by PR Newswire. This business divestiture is intended to improve the bank's capital efficiency and sharpen its focus on core markets.

As part of the deal, BMO will keep a 19.9% equity stake in the businesses. The transaction is expected to improve BMO's capital ratios and its Return on Equity (ROE). ROE is a key financial performance metric that measures how profitably a company uses the money invested by its shareholders.