Analyst Manan Gosalia of Morgan Stanley maintained a Sell rating on Comerica (CMA – Research Report), retaining the price target of $55.00.
Manan Gosalia has given his Sell rating due to a combination of factors affecting Comerica’s financial outlook. Despite Comerica’s first-quarter earnings surpassing expectations due to lower expenses and higher net interest income (NII), the forward guidance indicates challenges. The macroeconomic environment is pressuring the bank’s loan growth and NII projections, with expectations of a slight decline in average loan growth and a modest increase in NII, both of which are below previous guidance.
Additionally, Comerica’s fee income has underperformed, leading to a downward revision in the full-year fee guidance. While deposit trends have improved, with declining interest-bearing deposit costs, the overall revenue environment remains uncertain. The bank has adjusted its expense guidance slightly downward, but the potential need to recalibrate expenses further if revenue conditions worsen adds to the cautious outlook. These factors collectively contribute to the Sell rating as they suggest limited growth prospects and potential financial pressures for Comerica.
In another report released today, Evercore ISI also downgraded the stock to a Sell with a $50.00 price target.