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Investing.com - Raymond (NSE:RYMD) James downgraded Comerica (NYSE:CMA) from Outperform to Market Perform on Tuesday, removing its previous $60 price target. According to InvestingPro data, the bank currently trades at a P/E ratio of 11.86, with analyst targets ranging from $47 to $75.
The downgrade comes as Raymond James sees a balanced risk-reward profile and fair valuation for the bank, despite its solid capital and liquidity position, historically strong credit quality, and presence in attractive markets. The $8.27 billion market cap bank has maintained dividend payments for 55 consecutive years and delivered a strong 32% return over the past year.
The firm cited below-peer projected loan growth and profitability as key concerns, along with headwinds from declining BSBY (Bloomberg Short-Term Bank Yield Index) benefits and the roll-off of Direct Express deposits in coming years.
Raymond James also noted a "lack of fundamental catalysts" for Comerica, whose shares have now exceeded the firm’s previous $60 price target.
The investment bank views a near-term sale of Comerica as "less than likely," assigning less than 50% probability of a near- to intermediate-term acquisition despite recent regulatory efforts to accelerate bank deregulation that could increase industry consolidation.
In other recent news, Comerica Incorporated reported earnings per share of $1.25, surpassing Wall Street’s expectation of $1.14. The company’s net interest income exceeded estimates, contributing an additional six cents, although this was offset by lower fee revenue. UBS maintained a Neutral rating on Comerica with a $59 price target, reflecting the mixed earnings results. DA Davidson also adjusted its outlook, reducing the price target to $56 due to lower revenue forecasts and a weaker loan outlook. Comerica’s revenue projections were revised downward despite surpassing EPS estimates.
Jefferies initiated coverage on Comerica with an underperform rating, citing concerns about the bank’s future financial performance and setting a price target of $47. The anticipated loss of Direct Express deposits and stagnant loan growth were highlighted as potential challenges. Additionally, Comerica announced a change in its executive team, with Brian S. Goldman resigning as Chief Risk Officer, effective May 2025. Melinda A. Chausse will temporarily assume the role while a permanent replacement is sought.
Comerica also reported changes to its Board of Directors, reducing the number to eleven members following the conclusion of Nancy Avila’s tenure. Shareholders voted to affirm the election of eleven directors and ratified the appointment of Ernst & Young LLP as the independent auditor for the fiscal year ending December 31, 2025.
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