On Monday, Keefe, Bruyette & Woods adjusted their price target for Comerica Incorporated (NYSE:CMA), decreasing it to $50.00 from the previous target of $56.00. Despite this change, the firm maintained a Market Perform rating for the bank's stock.
The revision comes after a notable decline in Comerica's stock value. On the same day, the shares experienced an approximate 11% drop, which the firm relates directly to its updated 2025 earnings estimate. This forecast revision accounts for the loss of Comerica's Direct Express relationship, a factor that is expected to reduce the 2025 earnings estimate by 14%.
Prior to this setback, Comerica's stock had shown signs of improvement, buoyed by the anticipation of lower interest rates, potential regulatory easing, and merger and acquisition activity. However, the latest news regarding the Direct Express contract loss has cast a shadow over the stock's near-term outlook.
The firm's analyst pointed out that while the stock had been performing well due to these positive market conditions, the recent disclosure regarding the Direct Express relationship is likely to continue affecting investor sentiment.
In summary, Keefe, Bruyette & Woods' decision to lower the price target reflects their revised earnings expectations for Comerica in light of the Direct Express contract loss, while the Market Perform rating indicates a neutral stance on the stock's future performance.
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