Escalating expenses due to technological developments remain a concern for Comerica Incorporated’s (CMA - Free Report) . Further, its exposure to risky loan portfolios might hamper financials. However, it is focusing on revenue enhancing initiatives, which are likely to drive operational efficiency. Further, the company is expected to benefit from easing margin pressure and loan growth in the near term.
The company’s volatile non-interest expenses pose a concern. Though management expects expenses to decline in 2019, continued investment in technological developments might put some pressure on it.
Furthermore, Comerica’s significant exposure to commercial loans (nearly 89% of the total loans) and to challenging economies of California and Michigan keeps us apprehensive.
However, the company’s interest income continues to benefit from relatively higher rate environment and consistently increasing loans balance. Management expects average loan growth to be 2-4% for 2019. Also, net interest income is anticipated to increase 3-4%.
In mid-2016, Comerica launched Growth in Efficiency and Revenue Initiative or “GEAR Up” initiatives in order to drive revenue growth, reduce expenses and improve efficiency by identifying and analyzing areas with room for improvement. Notably, execution of these initiatives resulted in an efficiency ratio of under 54% in 2018. Further, such efforts are anticipated to deliver annual pre-tax income of $35 million in 2019 and beyond.
Comerica continues to enhance shareholders’ value through steady capital-deployment activities. In January 2019, the board of directors hiked the quarterly dividend by 12% and approved a plan to repurchase an additional 15 million in common shares. These activities seem sustainable, given the company’s strong capital position.
Recently, Glacier Bancorp (GBCI - Free Report) , Ameris Bancorp (ABCB - Free Report) and State Street (STT - Free Report) announced dividend hikes of 7.4%, 50% and 11%, respectively, in a bid to instil investors’ confidence in the stock.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Escalating expenses due to technological developments remain a concern for Comerica Incorporated’s (CMA - Free Report) . Further, its exposure to risky loan portfolios might hamper financials. However, it is focusing on revenue enhancing initiatives, which are likely to drive operational efficiency. Further, the company is expected to benefit from easing margin pressure and loan growth in the near term.
The company’s volatile non-interest expenses pose a concern. Though management expects expenses to decline in 2019, continued investment in technological developments might put some pressure on it.
Furthermore, Comerica’s significant exposure to commercial loans (nearly 89% of the total loans) and to challenging economies of California and Michigan keeps us apprehensive.
However, the company’s interest income continues to benefit from relatively higher rate environment and consistently increasing loans balance. Management expects average loan growth to be 2-4% for 2019. Also, net interest income is anticipated to increase 3-4%.
In mid-2016, Comerica launched Growth in Efficiency and Revenue Initiative or “GEAR Up” initiatives in order to drive revenue growth, reduce expenses and improve efficiency by identifying and analyzing areas with room for improvement. Notably, execution of these initiatives resulted in an efficiency ratio of under 54% in 2018. Further, such efforts are anticipated to deliver annual pre-tax income of $35 million in 2019 and beyond.
Comerica continues to enhance shareholders’ value through steady capital-deployment activities. In January 2019, the board of directors hiked the quarterly dividend by 12% and approved a plan to repurchase an additional 15 million in common shares. These activities seem sustainable, given the company’s strong capital position.
Recently, Glacier Bancorp (GBCI - Free Report) , Ameris Bancorp (ABCB - Free Report) and State Street (STT - Free Report) announced dividend hikes of 7.4%, 50% and 11%, respectively, in a bid to instil investors’ confidence in the stock.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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