Is Bank of Montreal (BMO) Stock Over or Undervalued?

InvestorsObserver gives Bank of Montreal (BMO) a strong valuation score of 77 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. BMO currently holds a better value than 77% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.

BMO gets a 77 Valuation Rank today. Find out what this means to you and get the rest of the rankings on BMO!

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Metrics Analysis

BMO has a trailing twelve month Price to Earnings (PE) ratio of 14.1. The historical average of roughly 15 shows a average value for BMO stock as investors are paying fair share prices relative to the company's earnings. BMO's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 2.60 justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings. BMO has a 12 month forward PE to Growth (PEG) ratio of 0.68. Markets are overvaluing BMO in relation to its projected growth as its PEG ratio is currently above the fair market value of 1. 2.5999999's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.

Summary

All together these valuation metrics paint a pretty strong picture for BMO at its current price due to a undervalued PEG ratio despite strong growth. The PE and PEG for BMO are better than the average of the market resulting in a valuation score of 77. Click Here to get the full Report on Bank of Montreal (BMO) stock.