On Wednesday, Jefferies adjusted its outlook on Bank of Montreal (TSX:BMO:CN) (NYSE: BMO), reducing the price target to Cdn$141.00 from the previous Cdn$142.00. The firm maintained a Hold rating on the stock. This change follows the bank's recent adjustments in its operating leverage, which addressed a major concern from the first quarter.
Bank of Montreal's operating leverage was a focal point this quarter as the bank made efforts to rightsize it following criticism from the previous quarter. Despite these adjustments, the bank's domestic retail segment faced challenges due to credit deterioration. Additionally, the U.S. segment of the bank experienced a decline in revenue growth, attributed to a decrease in volume and margin compression.
The firm acknowledged the potential in Bank of Montreal's strategies, noting that there could be positive outcomes in the future. However, the current near-term market conditions, including the aforementioned credit and revenue issues, are expected to dampen investor sentiment towards the bank.
Bank of Montreal has not publicly responded to the revised price target or the comments from Jefferies. The bank's shares continue to trade on the NYSE and the Canadian market, where investors will be watching closely to see how the bank's strategies unfold in light of the recent analysis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.