Shares of Bank of Montreal moved higher after the lender posted stronger-than-expected results in its U.S. operations and capital markets business, easing concerns about credit quality and economic softness.
BNN Bloomberg spoke with Cole Kachur, portfolio manager and senior investment advisor at Wellington-Altus Private Wealth, who said he would hold BMO at current levels, while also weighing opportunities in names such as Lowe’s, Loblaw and Cargojet.
Key Takeaways
- BMO reported broad-based strength across divisions, with no major signs of weakness in the quarter.
- Lower provisions for credit losses suggest confidence in loan quality, though private credit remains an area to watch.
- Bank stocks have rallied strongly over the past year, leaving valuations stretched and limiting near-term upside.
- Lowe’s execution remains solid despite a sluggish U.S. housing backdrop, with pullbacks seen as potential entry points.
- Loblaw’s long-term outperformance and recent weakness could offer accumulation opportunities, while Cargojet’s muted multi-year returns raise execution concerns.
Read the full transcript below:
ROGER: Shares of Bank of Montreal are trading higher after the company posted a beat in its American operations and capital markets units. Our next guest says he would hold the BMO stock because, while earnings were good, the stock has seen strong gains in the past year and valuations are starting to look a bit stretched.
Here to tell us more is Cole Kachur, portfolio manager and senior investment advisor at Wellington-Altus Private Wealth. Cole, thanks very much for joining us.
COLE: Yeah, thank you for having me.
ROGER: Initial numbers — your thoughts? What stands out for you? What do you like?
COLE: Well, I think the earnings were pretty good across the board. There weren’t really any major signs of weakness in any of their divisions. As I mentioned in my note, the banks have performed fairly strongly, and the price is now reflected in the stock. A lot of these companies are seeing a little bit of a bump today, and at some point the valuation and the numbers get a little stretched and the stock has to take a breather.
In regard to the current earnings call, I didn’t really see a whole lot that would be cause for concern. I think your previous guest mentioned some issues around credit, which is fair, but if they’re putting less money aside for credit delinquencies, that’s probably a good thing. For the most part, these banks have been conservative, and when they set money aside and don’t end up needing it, it often results in a dividend increase or some type of capital return.
The banks seem to be firing on all cylinders, which is a little surprising because the economy seems somewhat slower.
ROGER: That has been the big concern, but those credit loss numbers kind of offset that. Any potential headwinds you could see coming for BMO or the other banks?
COLE: I don’t know of any major headwinds. In the real estate sector there’s some exposure. You never really know what these banks, or any company, have in the financial sphere in relation to private credit exposure. There have been a few cracks in the private credit market over the last month or two. Sometimes you just don’t know what’s in Pandora’s box.
There will always be areas where banks have exposure that you might hope they wouldn’t. But over a fairly long track record, most of the banks have proven they can mitigate and manage risk. That’s why they’ve delivered pretty good shareholder returns.
Unless there’s something fundamentally broken in the banking system — and specifically in Canada I don’t think there is — there’s not really a major reason to see a ton of downside other than general rotation out of the sector. A lot of good companies correct, and the banks aren’t immune to that.
If I were looking to invest new capital, with the run-up in the banks I would probably look elsewhere. That’s not really about the banks themselves — by and large they’ve been very good.
ROGER: All right, let’s get a couple of other names in here. Lowe’s reported earnings — like Home Depot, good, but...
COLE: That’s the tough part with some of these companies. You can deliver what are really good earnings, but if you don’t raise guidance or significantly exceed expectations, the stock can take a bit of a hit.
With a company like Lowe’s, they’ve been controlling what they can control within their stores. They’ve made some purchases over the last year or two that are helping earnings. They’ve focused more on the contractor business as opposed to just the retail customer.
The reality is the new home market in the U.S. is slow, and that’s going to be a headwind. But in terms of managing the company and managing risk, Lowe’s has done a pretty good job. When you see a company sell off fairly substantially on what I think are good earnings — just not amazing earnings — sometimes good stocks take a breather.
You may want to identify an entry point where you’d be comfortable owning it, because Lowe’s execution has been quite strong.
ROGER: Is this the entry point for Loblaw? Solid earnings, expansion plans, but the stock is down.
COLE: Exactly. Sometimes the market doesn’t like the idea that you have to spend money to make money, whether that’s expansion of new stores or, in the case of tech companies, expansion of data centres.
Loblaw has quietly been a very strong performer for a long time and is deeply embedded within Canada across multiple categories. It’s not often you see dips of 10 per cent or 15 per cent, but generally when you do, those are areas you might look at accumulating rather than panic selling.
It’s on my watch list. Around current levels — in that $64 to $64.50 range — from a technical perspective it’s looking fairly constructive. If the 50-day and 200-day moving averages hold, it could have a chance to move higher rather than lower, even though the earnings selloff was sharper than expected.
ROGER: We want to sneak in one more before we run out of time: Cargojet.
COLE: Cargojet is interesting because, in theory, the stock should perform well. The contracts it has and the delivery volumes suggest it should be a strong performer. But over the last year, and really over the last five years, it’s been capital that hasn’t really moved.
I don’t mind the stock at this level, but there’s uncertainty around owning a name that hasn’t performed well without a clear change in fundamentals. There are probably better places to deploy capital. The company should arguably be better than what it has been, but execution matters. Over the last five years, it hasn’t delivered the returns you might expect.
With many solid management teams available in Canada and the U.S., you might find something else that has performed and that you have a little more confidence in.
ROGER: Cole, we’ll have to wrap it up there. Thank you very much for joining us.
COLE: I appreciate it. Thank you.
ROGER: Cole Kachur, portfolio manager and senior investment advisor at Wellington-Altus Private Wealth.
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This BNN Bloomberg summary and transcript of the Feb. 25, 2026 interview with Cole Kachur are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
