Jefferies has begun coverage on Comerica (CMA, Financial), assigning an Underperform rating and setting a price target of $47. As the firm evaluates 32 regional and mid-cap banks, it maintains a generally positive outlook, despite some economic uncertainties. Several factors might bolster the banking sector, including a potential increase in loan growth if the U.S. manages to avoid a recession. Additionally, a steeper yield curve could lead to net interest margin expansion, while credit metrics remain robust. Comerica's excess capital positions it well for strategic maneuvers, whether aggressive or defensive, and its valuation appears attractive, according to analysts.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Comerica Inc (CMA, Financial) is $60.19 with a high estimate of $75.00 and a low estimate of $50.00. The average target implies an upside of 3.55% from the current price of $58.12. More detailed estimate data can be found on the Comerica Inc (CMA) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, Comerica Inc's (CMA, Financial) average brokerage recommendation is currently 3.1, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Comerica Inc (CMA, Financial) in one year is $56.72, suggesting a downside of 2.41% from the current price of $58.12. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Comerica Inc (CMA) Summary page.
CMA Key Business Developments
Release Date: April 21, 2025
- Earnings: $172 million or $1.25 per share.
- Net Interest Income: Stable at $575 million, with a 12 basis point expansion in net interest margin.
- Average Loans: Declined less than 1%, with specific decreases in national dealer services and commercial real estate.
- Average Deposits: Decreased by $1.4 billion from the fourth quarter, with non-interest bearing deposits remaining flat at 38% of total deposits.
- Net Charge-Offs: Increased to 21 basis points, at the low end of the normal 20 to 40 basis point range.
- Non-Interest Income: Increased by $4 million, with a notable $19 million benefit from the absence of prior quarter securities repositioning loss.
- Non-Interest Expenses: Decreased by $3 million, with reductions in litigation expenses and consulting fees.
- Common Equity Tier 1 (CET1) Ratio: Estimated at 12.05%, above the strategic target.
- Shareholder Returns: $143 million returned through share repurchases and dividends.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Comerica Inc (CMA, Financial) exceeded expectations in several categories, resulting in higher profitability compared to the previous quarter.
- The company saw a 12 basis point expansion in net interest margin due to good deposit trends and structural benefits from swaps and securities portfolios.
- Comerica Inc (CMA) maintained a strong capital position with an estimated CET1 ratio of 12.05%, providing flexibility to navigate economic uncertainties.
- The company returned $143 million to shareholders through share repurchases and dividends, demonstrating a commitment to shareholder value.
- Non-interest income grew, and the company expects to drive positive momentum in customer-related fees throughout the year.
Negative Points
- Comerica Inc (CMA) experienced a modest reduction in average loan balances due to muted loan demand and declines in national dealer services and commercial real estate.
- Customer sentiment took a step back due to increased macroeconomic uncertainty, impacting market confidence.
- Net charge-offs increased, although they remained at the low end of the normal range, indicating some pressure on credit quality.
- Non-interest expenses declined, but the company noted a slowdown in business activity, which could impact future growth.
- The company anticipates a potential wide range of outcomes for 2025 due to increased economic uncertainty, with slower GDP growth expected compared to 2024.
