Top 5 Largecap Banks Ranked by WarrenAI: BMO Leads with 56% Annual Return

Investing.com -- Largecap banks have shown remarkable performance variations over the past year, with some institutions delivering exceptional returns while others present compelling valuation opportunities, according to WarrenAI’s comprehensive analysis using Investing Pro metrics.

1. Bank of Montreal (BMO) tops the rankings with explosive performance metrics, showing a remarkable 56.3% one-year return. Technical indicators are exceptionally strong, though RSI readings of 81.9 suggest the stock is currently overbought. BMO offers significant upside potential with Fair Value estimates pointing to 25.2% headroom, while analyst price targets suggest a more modest 6.6% upside. WarrenAI notes BMO "checks every bullish box" across technicals, momentum, and returns despite the overbought warning signs.

In a recent development, BMO Financial Group reported a 25% increase in third-quarter profit, with adjusted earnings per share of C$3.23 and revenue of C$8.99 billion, both surpassing analyst expectations.

2. U.S. Bancorp (USB) presents the strongest valuation opportunity with a substantial 35.6% Fair Value upside and 19.2% analyst target upside, though its one-year return of 14.8% trails sector leaders. Technical indicators show strong buy signals on both daily and weekly timeframes, with RSI readings in the 60-70 range indicating strong but not overheated momentum. WarrenAI describes USB as "undervalued with strong technicals" but notes it lacks the price momentum of BMO.

U.S. Bancorp reported Q2 2025 earnings with an EPS of $1.11 and also launched a new cash flow platform for small businesses. Following these updates, Truist Securities raised its price target on the company to $51.00.

3. PNC Financial Services Group (PNC) demonstrates balanced metrics with 23.2% Fair Value upside and 12.3% analyst target upside, accompanied by 15.7% one-year returns. Technical indicators reflect a "Strong Buy" across timeframes with RSI readings similar to USB in the 60-70 range. WarrenAI characterizes PNC as having "strong technicals" within a "healthy uptrend."

PNC Financial Services Group announced its acquisition of FirstBank, which prompted several analyst actions, including an upgrade to Outperform from Oppenheimer and a price target increase to $219 from HSBC.

4. Capital One Financial (COF) ranks fourth despite matching BMO’s momentum with a 57% one-year return. The stock appears overvalued with negative Fair Value upside of -8.6%, though analyst targets still suggest modest 4% upside potential. Technical indicators remain bullish with weekly RSI at 65.2, prompting WarrenAI to note its "massive 1Y rally" while cautioning that "short-term upside is spent."

Recently, Capital One Financial announced strong second-quarter results, with adjusted earnings per share of $5.48 significantly exceeding consensus estimates. Following the report, TD Cowen raised its price target on the company to $260.

5. Toronto-Dominion Bank (TD) rounds out the top five with strong 31.5% one-year returns but concerning valuation metrics. Fair Value estimates indicate the stock is 2.1% overvalued, though analyst targets suggest 14.1% upside potential. Technical indicators remain bullish despite overbought RSI readings of 75.5, leading WarrenAI to warn that "overbought/negative fair value suggest limited runway."

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