Analyst Brandon Berman from Bank of America Securities reiterated a Hold rating on Commerce Bancshares (CBSH – Research Report) and increased the price target to $71.00 from $69.00.
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Brandon Berman has given his Hold rating due to a combination of factors influencing Commerce Bancshares’ current and future performance. The acquisition of FineMark National Bank & Trust is seen as a strategic move to bolster Commerce’s wealth management sector, aligning with its growth strategy. However, the valuation of the deal is slightly above the average for similar transactions, which may limit the immediate upside potential for investors.
Additionally, while Commerce Bancshares is recognized as a high-quality franchise, the stock is trading at a premium compared to its mid-cap peers, suggesting that there might be better risk/reward opportunities elsewhere. Despite the positive outlook on earnings per share and the raised price objective, the regulatory and shareholder approvals required for the acquisition add an element of uncertainty. Therefore, Berman maintains a Neutral stance, reflecting a balanced view of the potential benefits and risks associated with the stock.
Berman covers the Financial sector, focusing on stocks such as Commerce Bancshares, F.N.B., and UMB Financial. According to TipRanks, Berman has an average return of -2.7% and a 45.76% success rate on recommended stocks.