We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Comerica (CMA) Deepens Focus on Growth: Time to Buy the Stock?
Read MoreHide Full Article
Comerica Incorporated (CMA - Free Report) continues to gain from its improving organic growth and revenue-enhancing initiatives. Decent liquidity aids its capital deployments. Better credit quality is also a tailwind.
The Zacks Consensus Estimate for Comerica’s 2022 and 2023 earnings has been revised 1.8% and 2.5% upward, respectively, over the past 30 days. The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here..
Shares of Comerica have gained 29.1% in the past six months against the 1.8% fall of the industry.
Image Source: Zacks Investment Research
Comerica’s focus on improving its operational efficiency led to the introduction of GEAR Up initiatives in mid-2016. Since the implementation of this initiative, the bank has consolidated numerous banking centers, significantly reduced retirement plan expenses and retrenched a number of employees. CMA's efforts in product enhancements, enhanced sales tools and training as well as improved customer analytics bode well for robust revenue growth in the upcoming period.
Comerica’s income-generation capability is impressive, given loan growth. While average loans declined in 2021, the same increased, witnessing a five-year compound annual growth rate of 0.3% (ended 2021). With its gradually improving loan commitments, a robust loan pipeline and recovery in the economy, CMA’s loan balance is expected to continue increasing, thereby stoking net interest income growth.
As of Dec 31, 2021, Comerica’s medium- and long-term debt, and times interest earned ratio stood at $2.79 billion and 43.6, respectively, both of which improved over the last few quarters. Moreover, with cash and cash equivalents of $22.6 billion, we believe, Comerica has a lesser likelihood of defaulting interest and debt repayments if the economic situation worsens.
Credit metrics have improved significantly in the past few years. Allowance for credit losses and non-performing assets declined as economic conditions improved with some quarterly volatility. Though the metrics deteriorated in 2020 due to the coronavirus fallout, the same showed an improvement in 2021 and is expected to continue improving with the economic recovery in the upcoming quarters.
Comerica’s capital deployment activities are encouraging. In January 2020, the board of directors hiked quarterly dividend 1.5%. On Apr 27, 2021, the board approved an additional share-buyback plan, with an authorization to repurchase up to an additional 10 million shares. CMA repurchased 9.5 million shares for $720 million in 2021. In addition, its improving performance and a favorable debt-equity ratio than the industry indicate that such capital deployment activities are sustainable in the future.
Other Stocks to Consider
Some other top-ranked stocks in the banking space are First Business Financial Services (FBIZ - Free Report) , Bancolombia S.A. (CIB - Free Report) and PCB Bancorp (PCB - Free Report) . At present, both CIB and FBIZ flaunt a Zacks Rank #1, while PCB carries a Zacks Rank #2 (Buy).
Over the past year, shares of First Business have jumped 26.2%, while the stocks of CIB and PCB have rallied 14.7% and 46.5%, respectively.
Over the past 30 days, the Zacks Consensus Estimate for First Business’ current-year earnings has been revised 3.1% upward, while the same for CIB has moved 14.8% north. Moreover, current-year earnings estimates for PCB Bancorp have moved 10.3% up from the past month’s level.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Comerica (CMA) Deepens Focus on Growth: Time to Buy the Stock?
Comerica Incorporated (CMA - Free Report) continues to gain from its improving organic growth and revenue-enhancing initiatives. Decent liquidity aids its capital deployments. Better credit quality is also a tailwind.
The Zacks Consensus Estimate for Comerica’s 2022 and 2023 earnings has been revised 1.8% and 2.5% upward, respectively, over the past 30 days. The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here..
Shares of Comerica have gained 29.1% in the past six months against the 1.8% fall of the industry.
Image Source: Zacks Investment Research
Comerica’s focus on improving its operational efficiency led to the introduction of GEAR Up initiatives in mid-2016. Since the implementation of this initiative, the bank has consolidated numerous banking centers, significantly reduced retirement plan expenses and retrenched a number of employees. CMA's efforts in product enhancements, enhanced sales tools and training as well as improved customer analytics bode well for robust revenue growth in the upcoming period.
Comerica’s income-generation capability is impressive, given loan growth. While average loans declined in 2021, the same increased, witnessing a five-year compound annual growth rate of 0.3% (ended 2021). With its gradually improving loan commitments, a robust loan pipeline and recovery in the economy, CMA’s loan balance is expected to continue increasing, thereby stoking net interest income growth.
As of Dec 31, 2021, Comerica’s medium- and long-term debt, and times interest earned ratio stood at $2.79 billion and 43.6, respectively, both of which improved over the last few quarters. Moreover, with cash and cash equivalents of $22.6 billion, we believe, Comerica has a lesser likelihood of defaulting interest and debt repayments if the economic situation worsens.
Credit metrics have improved significantly in the past few years. Allowance for credit losses and non-performing assets declined as economic conditions improved with some quarterly volatility. Though the metrics deteriorated in 2020 due to the coronavirus fallout, the same showed an improvement in 2021 and is expected to continue improving with the economic recovery in the upcoming quarters.
Comerica’s capital deployment activities are encouraging. In January 2020, the board of directors hiked quarterly dividend 1.5%. On Apr 27, 2021, the board approved an additional share-buyback plan, with an authorization to repurchase up to an additional 10 million shares. CMA repurchased 9.5 million shares for $720 million in 2021. In addition, its improving performance and a favorable debt-equity ratio than the industry indicate that such capital deployment activities are sustainable in the future.
Other Stocks to Consider
Some other top-ranked stocks in the banking space are First Business Financial Services (FBIZ - Free Report) , Bancolombia S.A. (CIB - Free Report) and PCB Bancorp (PCB - Free Report) . At present, both CIB and FBIZ flaunt a Zacks Rank #1, while PCB carries a Zacks Rank #2 (Buy).
Over the past year, shares of First Business have jumped 26.2%, while the stocks of CIB and PCB have rallied 14.7% and 46.5%, respectively.
Over the past 30 days, the Zacks Consensus Estimate for First Business’ current-year earnings has been revised 3.1% upward, while the same for CIB has moved 14.8% north. Moreover, current-year earnings estimates for PCB Bancorp have moved 10.3% up from the past month’s level.