Tuesday, Compass Point maintained a Buy rating on Comerica (NYSE: CMA) but reduced the price target to $56.00 from $63.00. The adjustment reflects a revision in the core earnings per share (EPS) estimates for fiscal years 2024 and 2025, now set at $4.86 and $5.40, down from the previous $5.00 and $6.00, respectively.
The firm pointed to a lower core net interest income (NII) and net interest margin (NIM) as primary factors for the revised estimates. However, this was somewhat counterbalanced by slightly reduced provisions for credit losses and operating expenses compared to earlier projections.
According to Compass Point, despite the lowered price target and EPS forecasts, there are still multiple factors that could lead to the outperformance of Comerica's share price over the next year. The firm did not elaborate on these potential drivers in the update.
Comerica, a financial services company, has been under analysis by Compass Point, which continues to see the stock favorably despite the adjustments in financial projections. The new price target of $56.00 represents Compass Point's current valuation of the company's stock.
In other recent news, Comerica Incorporated (NYSE:CMA) has been the focus of several financial reassessments by analysts. Keefe, Bruyette & Woods decreased their price target for Comerica to $50.00, maintaining a Market Perform rating.
This adjustment comes after a revision of the 2025 earnings estimate due to the expected loss of the Direct Express relationship. Piper Sandler also adjusted the price target for Comerica to $52.00, with a Neutral rating, reflecting a recalibration of future earnings per share (EPS) expectations.
Baird reduced its price target for Comerica to $65 from $68, despite the company surpassing earnings per share estimates in its second-quarter report.
The potential loss of the Federal Direct Express contract renewal was a major factor in this decision. RBC Capital lowered its price target to $56 from $58, maintaining an Outperform rating, due to a decrease in noninterest-bearing deposits and net interest income.
DA Davidson maintained a Neutral rating with a consistent price target of $55.00, highlighting the potential loss of the Direct Express Business as a significant challenge for Comerica's financial projections for 2025.
Truist Securities downgraded Comerica's stock from Buy to Hold, adjusting the price target to $53 due to a less favorable outlook for the company's net interest income and fee income for 2025, along with lower loan growth expectations.
InvestingPro Insights
As investors weigh Compass Point's revised outlook on Comerica, it's valuable to consider the latest InvestingPro data and insights. With a market capitalization of $6.8 billion and a price-to-earnings (P/E) ratio of 11.24, Comerica is positioned in the market with a solid financial footing. The adjusted P/E ratio for the last twelve months as of Q2 2024 stands at 10.92, indicating a slightly more favorable valuation when considering the company's earnings over the past year.
The InvestingPro Tips highlight that, despite a challenging week with a significant price drop, Comerica has maintained its dividend payments for 54 consecutive years, showcasing a commitment to shareholder returns. Additionally, while analysts have revised earnings downwards for the upcoming period and expect a decrease in net income this year, they still predict the company will remain profitable. This is corroborated by Comerica's profitability over the last twelve months.
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