Analyst David Chiaverini from Wedbush maintained a Hold rating on Comerica (CMA – Research Report) and increased the price target to $57.00 from $55.00.
David Chiaverini has given his Hold rating due to a combination of factors surrounding Comerica’s financial performance and future outlook. Despite a mixed quarter, Comerica’s net interest income (NII) guidance remained unchanged, alleviating concerns as it was better than initially feared. This stability comes in the face of a liability-sensitive balance sheet and a market expecting fewer rate cuts. However, the company’s overall guidance for the full year of 2024 was less optimistic, with reductions in expected loan and deposit growth, and lower fee income forecasts. Additionally, expenses were projected to be higher than previously anticipated.
Furthermore, Comerica’s credit quality presented a mixed picture, with nonperforming assets increasing, particularly in the senior housing sector, though overall credit quality remains above historical levels. The reiteration of NII guidance, despite the downward adjustments, suggests a robust deposit balance and strategic management of deposit rates. Chiaverini’s decision to maintain a neutral stance is rooted in his belief that Comerica’s market valuation already reflects its outlook, indicating that the current stock price appropriately captures the bank’s potential risks and rewards. Therefore, the Hold rating suggests that investors should not expect significant outperformance or underperformance from Comerica’s stock in the near term.
In another report released on April 9, Deutsche Bank also initiated coverage with a Hold rating on the stock with a $59.00 price target.
Based on the recent corporate insider activity of 116 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CMA in relation to earlier this year.
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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.
