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Tuesday saw Comerica Incorporated (NYSE:CMA) shares maintain their position after UBS analyst Nicholas Holowko reiterated a Neutral rating and a $59.00 price target. With a market capitalization of $6.62 billion and trading at a P/E ratio of 9.54x, InvestingPro analysis suggests the stock is currently undervalued. Comerica reported earnings per share (EPS) of $1.25, surpassing Wall Street’s expectation of $1.14 and UBS’s own estimate of $1.12 for the quarter, though six analysts have recently revised their earnings expectations downward.
The company’s net interest income contributed an additional six cents over both UBS and consensus estimates. However, this was balanced by lower fee revenue, resulting in overall revenue that was approximately in line with expectations. The net interest margin was a bright spot, coming in one basis point higher than anticipated at 3.18%, thanks to strong deposit repricing which helped to counterbalance slightly weaker growth in the balance sheet. Notable for income investors, Comerica maintains a robust 5.61% dividend yield and has maintained dividend payments for 55 consecutive years, according to InvestingPro data.
On the topic of expenses, the report highlighted that they were lower than expected, adding eight cents versus estimates. This was significantly influenced by reduced costs in the "other" category, as litigation expenses decreased compared to the previous quarter. This reduction in expenses was the main contributor to the nine-cent outperformance in pre-provision net revenue (PPNR).
Additionally, Comerica’s provision for credit losses was lower than what analysts had predicted, adding another three cents to earnings compared to Street forecasts. This was due to a decrease in reserves, although the allowance for loan losses remained steady at 1.44%.
Despite what was described as a good quarter for PPNR, UBS does not anticipate the results to significantly influence stock performance on Tuesday. The updated outlook provided by Comerica suggests that the full-year 2025 PPNR range is approximately 1% below the Street’s midpoint expectations and indicates a lower exit rate going into the following year. For deeper insights into Comerica’s financial health and detailed analyst forecasts, investors can access comprehensive research reports and additional ProTips through InvestingPro’s extensive coverage of over 1,400 US stocks.
In other recent news, Comerica Incorporated reported its first-quarter 2025 earnings, posting an earnings per share (EPS) of $1.25, which exceeded analysts’ expectations of $1.16. Despite this earnings beat, the company’s revenue slightly missed forecasts, coming in at $829 million compared to the projected $831.13 million. Analysts from Evercore ISI and JPMorgan have expressed cautious outlooks, downgrading Comerica’s stock ratings due to concerns over revenue headwinds and potential challenges in loan growth. Evercore ISI downgraded the stock to Underperform, while JPMorgan lowered it to Underweight, citing a more cautious future for the bank. Raymond (NSE:RYMD) James adjusted its price target for Comerica to $60 while maintaining an Outperform rating, acknowledging the bank’s strong capital and liquidity. In other developments, Comerica appointed Eric Teal as its new Chief Investment Officer, who will lead investment strategy and portfolio construction. These recent changes and analyst insights highlight the ongoing challenges and strategic shifts facing Comerica.
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