Sometimes, a temporary pullback in a fundamentally strong stock can create an attractive buying opportunity for long-term investors, and Bank of Montreal (TSX: BMO) may be reaching that point right now. BMO stock has surged 42% over the last year, but it slipped 6% in August and ended the month at $236.24 per share.
That pullback comes just as the bank recently delivered another quarter of solid adjusted profit growth, lower provisions for credit losses, and improving results across several major businesses. So, the recent weakness does not necessarily point to weaker fundamentals.
Let’s dig into BMO’s latest numbers, recent stock performance, and growth plans to see whether the pullback makes BMO stock an attractive buy for September 2026.
BMO stock after the recent pullback
As a major North American bank, Bank of Montreal serves about 13 million customers, with operations spanning personal and commercial banking, wealth management, and capital markets.
BMO stock ended August at $236.24 per share, giving the bank a market cap of $164.7 billion. At this price, it also offers a 2.9% annualized dividend yield.
Although its shares fell 6% last month and now sit nearly 9% below their 52-week high, its longer-term picture remains impressive as BMO stock is still up 33% year-to-date.
Earnings growth remains strong underneath the headline
Its third-quarter numbers give us a concrete reason why BMO stock remains attractive despite its recent decline.
In the third quarter of fiscal 2026 (ended in July), the bank’s reported net income fell 25% year over year (YoY) to about $1.8 billion. However, this weaker headline result was mainly driven by a $962 million after-tax charge tied to the announced sale of its Transportation Finance and Vendor Finance businesses. That’s why the underlying picture looked much better. Interestingly, BMO’s adjusted net profit climbed 19% YoY in the latest quarter to about $2.9 billion, while its adjusted return on equity strengthened to 14% from 12% a year ago.
Last quarter, BMO’s quarterly revenue climbed 10% YoY to $9.9 billion. At the same time, its provisions for credit losses improved to $722 million from $797 million a year ago, largely reflecting lower provisions on impaired loans in Canadian personal and commercial banking and U.S. banking.
The strength was spread across BMO’s major businesses, as its Canadian personal and commercial banking net income grew 16% YoY to $980 million, backed by higher net interest margin and non-interest revenue. Similarly, its U.S. banking division’s net income rose 13% to $868 million.
Meanwhile, wealth management’s adjusted net income also surged 22% YoY, while its capital markets segment delivered an even stronger 45% increase. This broad-based growth makes BMO’s recent stock pullback easier for long-term investors to view as a strong buying opportunity, in my opinion.
Why BMO still looks attractive in September
Strong earnings are only part of the investment appeal, as BMO’s capital position and shareholder returns add more reasons to buy this stock in September. BMO finished the quarter with a common equity tier-one ratio of 13% as it continues to deploy capital toward profitable loan growth while investing in talent, technology, and artificial intelligence (AI)-powered capabilities.
In the latest quarter, the bank also repurchased 3.8 million common shares and announced plans for a share-buyback program of up to 25 million shares.
Clearly, BMO stock has already delivered a powerful rally in the last year, so some volatility after those gains should not be surprising. Still, the recent pullback comes as its adjusted earnings rise, credit trends improve, and key businesses continue to post strong growth.
