Canadian Imperial Bank of Commerce

Canadian Imperial Bank of Commerce (CM - Snapshot Report) recently spiked to a new multi-year high after reporting a solid 15% Q1 earnings surprise in late February. Estimates have since jumped higher, providing more support for this Zacks #1 rank stock.

Company Description

Canadian Imperial Bank of Commerce, with its subsidiaries, offers a wide range of financial services and products to retail and commercial customers primarily in Canada. The company was founded in 1867 and has a market cap of $38 billion.

Much like other financial institutions, CM has seen massive gains over the last two years as the global economy and financial sector has strengthened. But shares got a shot in the arm on February 24 after the company reported another strong quarter that came in ahead of expectations.

First-Quarter Results

Revenue for the period was up 15% from last year to $2.97 billion. Earnings also looked good, coming in at $1.97, 15% ahead of the Zacks Consensus Estimate, the company's third consecutive earnings surprise.

CM's largest segment, CIBC Retail Markets, saw sales increase 6% from last year to $2.5 billion. But its biggest gains came from its smaller Wholesale Banking unit, where revenue jumped to $471 million from $238 million.

The bank also noted that it continues to insolate its financial profile and build reserves, with its Tier 1 and Tangible Common Equity ratios both on the upswing.

Estimates

We saw some upward movement in estimates off the good quarter, with the current year adding 42 cents to $7.59. The next-year estimate is up 34 cents in the same time to $7.76, a solid 8% growth projection.

Valuation

But in spite of the gains, the valuation picture still looks solid, where CM's forward P/E of 11X is a discount to its peers 12X.

12-Month Chart

On the chart, CM has been chugging higher since late last summer, but recently spiked into a new multiyear high on the good quarter. But in spite of the gains, the stochastic below the chart says shares are trading safely away from overbought territory. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.

Read the full analyst report on CM