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Investing.com - Jefferies has upgraded Comerica (NYSE:CMA) from Underperform to Hold and raised its price target to $70.00 from $50.00. The bank stock, which has delivered a 36.9% return over the past year and currently trades at a P/E ratio of 12.9, has shown resilience with its impressive 55-year track record of consecutive dividend payments, currently yielding 4.2%.
The upgrade reflects what Jefferies describes as a "heightened probability of a strategic takeout" for the bank. The firm cited recent developments that have increased the likelihood of a potential sale. According to InvestingPro data, Comerica maintains a "GOOD" Financial Health Score of 2.53, suggesting solid fundamentals despite market speculation.
Among these developments, Jefferies noted CEO Curt Farmer’s "more receptive tone toward M&A" as a key factor in its revised outlook. The firm also mentioned "mounting pressure from a prominent activist investor group" as contributing to the increased possibility of an acquisition.
Jefferies acknowledged that Comerica’s "core fundamentals continue to lag peers" in its assessment. Despite these ongoing operational challenges, the firm believes the takeover potential now balances the downside risks.
The revised Hold rating represents a more neutral stance on Comerica stock, with Jefferies indicating that the acquisition potential "offsets downside risks" that had previously led to its Underperform rating.
In other recent news, Comerica Incorporated announced a quarterly cash dividend of $0.71 per share, set to be paid on October 1, 2025, to shareholders of record as of September 15, 2025. HoldCo Asset Management has urged Comerica’s board to consider a sale process, as detailed in a recent research presentation. UBS has maintained a Neutral rating for Comerica, citing strong pre-provision net revenue performance and positive loan growth, though with some concerns over expenses. Keefe, Bruyette & Woods raised its price target for Comerica to $73, highlighting the stock as a deep-value opportunity in the large regional bank sector. Meanwhile, Stephens increased its price target to $68 following Comerica’s mixed second-quarter earnings, noting growth in loan balances and lower expenses but also highlighting challenges such as higher deposit costs impacting the net interest margin.
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