Comerica, the Financial sector company, was revisited by a Wall Street analyst today. Analyst David Chiaverini from Jefferies upgraded the rating on the stock to a Hold and gave it a $70.00 price target.
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David Chiaverini has given his Hold rating due to a combination of factors surrounding Comerica’s current market position and potential future developments. The primary reason for the Hold rating is the increased likelihood of a strategic acquisition, which has been fueled by recent actions and statements from Comerica’s CEO, Curt Farmer, as well as pressure from an activist investor group. This potential for a takeover offsets some of the downside risks associated with Comerica’s ongoing fundamental challenges.
Despite the growing speculation around a possible sale, Comerica’s core performance metrics have been underwhelming compared to its peers, particularly since Curt Farmer took over as CEO. The bank’s shares have underperformed, and it faces challenges such as the loss of significant non-interest-bearing deposits. However, the valuation of Comerica’s shares, which trade at a discount compared to peers, balances the risk and reward between remaining independent and being acquired, justifying the Hold stance.
In another report released on July 24, Truist Financial also maintained a Hold rating on the stock with a $68.00 price target.