Bernard von-Gizycki, an analyst from Deutsche Bank, has initiated a new Hold rating on Comerica (CMA).
Bernard von-Gizycki has given his Hold rating due to a combination of factors affecting Comerica’s financial outlook and performance within the banking sector. While Comerica’s stock has seen a significant rebound from its lows in late 2023, the improvement was largely driven by a market correction post the March 2023 bank crisis and expectations of a favorable shift in Federal Reserve policies. Despite these positive trends, Comerica’s year-to-date performance has been lackluster compared to its peers and the broader market, which can be attributed to concerns over its adaptation to regulatory changes and the impact of these changes on its commercial real estate portfolio, alongside uncertainty regarding the Fed’s interest rate cuts and the anticipated effect on Comerica’s net interest income in the following fiscal year.
Moreover, despite Comerica’s efforts to reduce funding costs and its ongoing investments to diversify revenue streams, von-Gizycki remains cautious about the overall banking group’s outlook. Specific challenges for Comerica include the continued shift from non-interest bearing to interest-bearing deposits, which could weigh on margins, and the larger economic implications of a prolonged high-rate environment on net interest income. Regulatory uncertainties, particularly around Category IV banking status, and the suspension of share buybacks due to significant unrealized losses on available-for-sale securities, further reinforce the Hold rating as Comerica navigates these headwinds.
In another report released on April 4, UBS also downgraded the stock to a Hold with a $59.00 price target.
CMA’s price has also changed moderately for the past six months – from $40.510 to $54.460, which is a 34.44% increase.
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Comerica (CMA) Company Description:
Comerica, Inc. engages in the provision of financial services. It operates through the following segments: Business Bank, Retail Bank, Wealth Management, Finance, and Other. The Business Bank segment involves in the middle market businesses, multinational corporations, and governmental entities by offering various products and services such as commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management, and loan syndication. The Retail Bank segment includes small business banking and personal financial services, which consist of consumer lending, consumer deposit gathering, and mortgage loan origination. The Wealth Management segment offers fiduciary services, private banking, retirement services, investment management and advisory services, investment banking and brokerage services. The Finance segment comprises corporation’s securities portfolio and asset and liability management activities. The Other category consists of income and expense impact of equity and cash, tax benefits, charges of an unusual or infrequent nature that are not reflective of the normal operations, and miscellaneous other expenses of a corporate nature. The company was founded in 1973 and is headquartered in Dallas, TX.
