Analyst Mario Mendonca from TD Cowen maintained a Buy rating on Canadian Bank of Commerce and increased the price target to C$134.00 from C$124.00.
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Mario Mendonca has given his Buy rating due to a combination of factors that highlight the Canadian Bank of Commerce’s strong financial performance and strategic positioning. The bank has shown stability in its provisions for credit losses, robust growth in Canadian personal and business pre-tax pre-provision profits, and a solid performance in capital markets. Additionally, the ongoing expansion of net interest margins (NIM) indicates a focus on profitability over volume, which supports a price-to-earnings ratio that surpasses many peers.
Furthermore, the bank’s ability to repurchase shares and its impressive adjusted earnings per share growth demonstrate financial strength and shareholder value creation. The bank’s operating leverage and net interest income growth are particularly noteworthy, driven by improved NIM in both Canada and the US. While there are emerging risks associated with late-cycle growth in capital markets loans, the bank’s conservative approach to reserves and its diversified loan book provide a buffer against potential uncertainties. These factors collectively underpin Mario Mendonca’s optimistic outlook on the bank’s future performance.
In another report released on November 25, Scotiabank also maintained a Buy rating on the stock with a C$123.00 price target.
Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CM in relation to earlier this year.