RBC Capital Markets upgraded Bank of Montreal (NYSE:BMO) and Canadian Imperial Bank of Commerce (NYSE:CM) to Outperform from Sector Perform in a recent note, as analyst Darko Mihelic sees a "transitional year" for Canadian lenders in 2025.

Mihelic hiked his price target on Toronto-listed BMO shares from $133 to $161, while upgrading his rating to “Outperform” from “Sector perform.” The stock closed 1.75 per cent higher at $141.55 per share on Wednesday, outpacing the BMO Equal Weight Banks Index ETF ( ZEB.TO ), a basket of Canada’s biggest lenders.