On Monday, DA Davidson maintained a Neutral rating for Comerica Incorporated (NYSE:CMA) with a consistent price target of $55.00 for the shares. The firm highlighted Comerica's solid core financial results but pointed out the potential challenge of losing the Direct Express Business, which could result in the bank forfeiting approximately $3.3 billion in average noninterest bearing deposits.
Although this change is not expected to financially impact Comerica in 2024, there is uncertainty regarding the timing of the deposit withdrawals and the possible negative effect on the bank's earnings for 2025.
The firm also noted that Comerica has revised its full-year net interest income (NII) outlook to a 14% decrease, a slight dip from the 13% decrease projected in the updated guidance on June 11. The third quarter is anticipated to mark the lowest point for NII.
Despite these concerns, DA Davidson remarked on the positive aspects of Comerica's performance, specifically the strength of credit quality and the bank's capital accumulation, which is reaching the higher end compared to its peers.
The $55 price target set by DA Davidson is based on a target price-to-earnings (P/E) multiple of 9.9 times the firm's 2025 earnings per share (EPS) forecast of $5.62 for Comerica.
The reassessment of Comerica's financial outlook, including the potential departure of the Direct Express Business deposits and the updated NII forecast, has been carefully considered in maintaining the price target and rating.
In other recent news, Comerica Incorporated has been the subject of various adjustments and reassessments by analysts. Truist Securities downgraded Comerica's stock from Buy to Hold, citing a less favorable outlook for the company's net interest income and fee income for 2025, and a predicted decrease in loan growth into 2025.
The firm also adjusted its earnings per share forecast for 2025, seeing a 16% decrease. RBC Capital and DA Davidson have also revised their price targets for Comerica, with RBC Capital lowering it to $58 and DA Davidson maintaining a 'Hold' rating with a price target of $57.
On the other hand, Wells Fargo reduced its price target for Comerica shares from $52.00 to $48.00 due to regulatory concerns. Citi downgraded Comerica's stock from Buy to Neutral, revising its price target to $56, after reviewing the company's first quarter earnings.
Comerica also announced the appointment of Floyd Kessler as Executive Vice President, Chief Business Risk and Controls Officer. These are some of the recent developments that are shaping analysts' outlooks and affecting the company's valuation.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.