Commerce Bancshares (CBSH – Research Report), the Financial sector company, was revisited by a Wall Street analyst on January 19. Analyst Timur Braziler from Wells Fargo remains neutral on the stock and has a $52.00 price target.
Timur Braziler has given his Hold rating due to a combination of factors impacting Commerce Bancshares. His analysis indicates that while the company has outperformed peers with its best net interest income (NII) growth among mid-cap banks, reflecting a substantial balance sheet and notable net interest margin (NIM) inflection, the stock’s premium valuation limits upside potential. This growth in NII is expected to begin in Q1 2024 and should accelerate as fixed assets reprice. Despite the positive momentum, Braziler believes that some of it is temporary, especially concerning the balance sheet size, but still, the higher NIM run-rate led him to raise his FY24/25 earnings per share (EPS) estimates. Consequently, he increased the price target but maintained an Equal Weight (EW) rating due to the stock’s expensive nature.
Another reason for the Hold rating lies in the performance of deposits and expenses. Commerce Bancshares is unique among its peers for growing demand deposit account (DDA) balances quarter-over-quarter and total deposits, although Braziler notes that much of this growth is seasonal. Looking ahead, a decline in deposit balances is expected in the first quarter due to seasonal outflows, but steady growth should follow. On the expenses side, core expenses increased more than anticipated, and while management expects similar growth through the first half of the year, a period of moderation is forecasted thereafter. These factors, combined with the anticipation of fee income growth and an improved capital position, contribute to the rationale for maintaining a Hold rating on CBSH.
According to TipRanks, Braziler is a 2-star analyst with an average return of 0.4% and a 49.30% success rate. Braziler covers the Financial sector, focusing on stocks such as First Horizon, Banc of California, and Popular.
In another report released today, Bank of America Securities also maintained a Hold rating on the stock with a $57.50 price target.
See Insiders’ Hot Stocks on TipRanks >>
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
Commerce Bancshares (CBSH) Company Description:
Commerce Bancshares, Inc. operates as a bank holding company. Its provides electronic banking, deposit accounts, loans and credit lines, and mortgage loans. The company was founded in February 1968 and is headquartered in Nolensville, TN.
Read More on CBSH:
- Commerce Bancshares reports Q4 EPS 84c, consensus 85c
- CBSH Earnings Report this Week: Is It a Buy, Ahead of Earnings?
- Salesforce upgraded, Warner Bros. downgraded: Wall Street’s top analyst calls
- BofA starts Commerce Bancshares with a Neutral on ‘rich’ valuation
- Commerce Bancshares initiated with a Neutral at BofA
