With the markets ability to "price in fore casted earnings etc"...How to you expected BMO share prices and other banks to react to already expected reduced profit, increased loss provisions ect.
Banks have been on a steady decline coming into earnings....and wondering how much further they might go....
opinion...
Thx
Bank stocks continue to drift lower as investors continuously worry about problems that have yet to occur. Thus, valuation multiples are approaching historical lows. BMO, for example. While the P/E of course bounces around with price, the lowest 'average' P/E of the past 20 years was 8.8X (2012). Even in the financial crisis of 2008, it averaged 11.5X and barely went below 9X. EPS at those times did not decline as much as the stock did. So today, BMO is 9.0X earnings. Yes, we could see a housing decline, corporate losses and a recession. But these issues do seem priced in. Partially priced in, fully, or too much of course is the big question. But we have declining prices and multiples at a time when, at least based on consenus estimates, earnings are still expected to increase over each of the next two years. Bottoms are hard to call, but we must be getting close.