Stephens analyst Terry McEvoy downgraded the rating on Comerica (CMA – Research Report) to a Hold today, setting a price target of $64.00.
Terry McEvoy has given his Hold rating due to a combination of factors influencing Comerica’s current market position. Despite Comerica’s strong performance in the first quarter of 2025 and its premium trading at approximately 10 times the 2026 earnings per share, there are concerns about the company’s commercial-heavy business model in a potentially weaker economic environment. The loss of the Direct Express contract, which accounted for a significant portion of non-interest-bearing deposits, poses a risk to revenue and earnings per share, especially if commercial loan demand remains subdued.
Additionally, while there is speculation about potential mergers and acquisitions, the anticipated upside in a takeout scenario appears limited. For instance, a hypothetical acquisition by PNC would only offer a modest premium and require capital raising to maintain regulatory capital ratios. Furthermore, Comerica’s commercial loan growth has historically lagged behind its peers, which could continue to be a challenge given the current economic conditions. These factors collectively contribute to the Hold rating, with a revised price target of $64.
In another report released on March 27, Wells Fargo also maintained a Hold rating on the stock with a $67.00 price target.