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Investing.com - Piper Sandler has reduced its price target on Commerce Bancshares (NASDAQ:CBSH) to $63.00 from $70.00 while maintaining a Neutral rating on the stock. The $6.97 billion market cap bank currently trades at a P/E ratio of 13.67x, with InvestingPro data showing the stock trading near its 52-week low.
The adjustment follows Commerce Bancshares’ third-quarter net interest income miss, which prompted the research firm to lower its 2025 and 2026 operating EPS estimates by 2-3% to $4.22 and $4.20, respectively.
Piper Sandler noted that Commerce Bancshares has underperformed the KRE index by 12% year-to-date, with its current valuation reaching among its cheapest relative and absolute levels within the past five years.
Despite the lower valuation, the research firm maintained its Neutral stance, citing "limited visibility of stand-alone catalysts" that could materially expand the bank’s current premium multiples of 12.2x/12.3x consensus 2025E/26E EPS compared to peers at 10.8x/10.4x.
The new price target is based on 15.0x the firm’s 2026 EPS estimate, representing a multiple reduction of 1.0x due to lower peer multiples, and remains in line with the stock’s historical long-term premium of 4x-5x.
In other recent news, Commerce Bancshares, Inc. reported its third-quarter financial results, revealing earnings of $1.06 per share. This figure did not meet analyst expectations, which were set at $1.10 per share. Additionally, the company’s revenue for the quarter was $440.97 million, falling short of the consensus estimate of $447.84 million. These results come as part of the latest developments concerning the company. Despite not meeting the earnings and revenue projections, the announcement had a slight positive impact on the company’s stock in pre-market trading. Investors will likely be interested in how Commerce Bancshares plans to address these shortfalls in future quarters. The company did not provide additional details on its strategy moving forward.
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