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Comerica Inc. (CMA)
NYSE:CMA
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Comerica
(NYSE:CMA)
66Neutral
Positive Factors
M&A Activity
Comerica outperformed peers, reflecting optimism that bank M&A activity is set to accelerate, offsetting the risk to the company's commercial-heavy business model in a weaker economic environment.
Net Interest Income
CMA should be able to grow NII given a relatively healthy loan pipeline and lower short-term rates helping NIB balances.
Negative Factors
Expense Guidance
The stock underperformance was driven by the miss on 2025 expense guide, which was higher than consensus estimates.
Legal Risks
There is a CFPB lawsuit regarding the Direct Express Government Program.
Loan Growth
Comerica's core commercial loan growth has lagged behind peers, with C&I and CRE balances essentially flat compared to peers' median growth.
Comerica (CMA) vs. S&P 500 (SPY)
Market Cap
$6.73B
Dividend Yield5.54%
Average Volume (3M)2.34M
Price to Earnings (P/E)10.2
Beta (1Y)1.50
Revenue Growth-6.54%
EPS Growth-21.90%
CountryUS
Employees7,565
SectorFinancial
Sector Strength86
IndustryBanks - Regional
Share Statistics
EPS (TTM)5.02
Shares Outstanding131,205,670
10 Day Avg. Volume2,577,735
30 Day Avg. Volume2,343,347
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.43
Price to Cash Flow (P/CF)-5.50
P/FCF Ratio4.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$66.64Price Target Upside30.56% Upside
Rating ConsensusHold
Number of Analyst Covering16
Comerica Business Overview & Revenue Model
Company DescriptionComerica Incorporated, through its subsidiaries, provides various financial products and services. It operates through Commercial Bank, Retail Bank, Wealth Management, and Finance segments. The Commercial Bank segment offers various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services, and loan syndication services for small and middle market businesses, multinational corporations, and governmental entities. The Retail Bank segment provides personal financial services, such as consumer lending, consumer deposit gathering, and mortgage loan origination. This segment also offers various consumer products that include deposit accounts, installment loans, credit cards, student loans, home equity lines of credit, and residential mortgage loans, as well as commercial products and services to micro-businesses. The Wealth Management segment provides products and services comprising fiduciary, private banking, retirement, investment management and advisory, and investment banking and brokerage services. This segment also sells annuity products, as well as life, disability, and long-term care insurance products. The Finance segment engages in the securities portfolio, and asset and liability management activities. It operates in Texas, California, Michigan, Arizona, Florida, Canada, and Mexico. The company was formerly known as DETROITBANK Corporation and changed its name to Comerica Incorporated in July 1982. Comerica Incorporated was founded in 1849 and is headquartered in Dallas, Texas.
How the Company Makes MoneyComerica makes money primarily through its interest income and non-interest income streams. The company earns interest income by extending loans to businesses and individuals, which include commercial loans, real estate loans, and consumer loans. A significant portion of its revenue is derived from the interest spread, which is the difference between the interest it charges on loans and the interest it pays on deposits. Additionally, Comerica generates non-interest income through fees and service charges, including wealth management fees, card fees, and treasury management services. The company also benefits from its strategic partnerships and investments in technology to enhance its service offerings and improve operational efficiency, thereby supporting its revenue growth.
Comerica Financial Statement Overview
Summary
Comerica demonstrates a strong revenue growth trajectory and improved equity position, with a significant reduction in debt. However, recent financials show declining net income and cash flow stability, posing concerns about future profitability and liquidity. Despite some weaknesses, the company maintains a solid financial foundation overall.Income Statement
Comerica has shown consistent revenue growth over recent years, with a notable increase in total revenue from $2.917 billion in 2020 to $3.939 billion in 2024. Despite a dip in net income in 2024, Comerica maintains a strong gross profit margin, as gross profit aligns with total revenue. However, the absence of EBIT and EBITDA data for 2024 limits profitability analysis for the latest year.70
Positive
Balance Sheet
Comerica's balance sheet reveals a healthy equity position, with stockholders' equity increasing from $5.181 billion in 2022 to $6.543 billion in 2024. The debt-to-equity ratio improved significantly as total debt was eliminated by 2024. The equity ratio is relatively stable, but the shrinking cash reserves and total assets over the years indicate potential liquidity concerns.65
Positive
Cash Flow
The cash flow statements show stability in operating cash flow, though it decreased from $1.251 billion in 2023 to $601 million in 2024. Free cash flow to net income ratio is favorable, but a declining trend in free cash flow growth and a drop in operating cash flow suggest challenges in maintaining cash flow stability.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.94B | 3.59B | 3.53B | 2.97B | 2.91B |
| Gross Profit | ||||
| 3.94B | 5.29B | 3.53B | 2.97B | 2.91B |
| EBIT | ||||
| -2.73B | 1.35B | 1.68B | 1.49B | 591.00M |
| EBITDA | ||||
| 0.00 | 1.23B | 1.57B | 1.59B | 729.00M |
| Net Income Common Stockholders | ||||
| 698.00M | 881.00M | 1.15B | 1.17B | 497.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 15.89B | 9.50B | 25.45B | 39.86B | 30.97B |
| Total Assets | ||||
| 79.30B | 85.83B | 85.41B | 94.62B | 88.13B |
| Total Debt | ||||
| 6.67B | 9.77B | 6.24B | 2.80B | 5.73B |
| Net Debt | ||||
| -131.00M | 269.00M | -47.00M | -19.88B | -10.04B |
| Total Liabilities | ||||
| 72.75B | 79.43B | 80.22B | 86.72B | 5.73B |
| Stockholders Equity | ||||
| 6.54B | 6.41B | 5.18B | 7.90B | 8.05B |
| Cash Flow | Free Cash Flow | |||
| 601.00M | 1.10B | 556.00M | 564.00M | 849.00M |
| Operating Cash Flow | ||||
| 601.00M | 1.25B | 638.00M | 634.00M | 928.00M |
| Investing Cash Flow | ||||
| 3.26B | 3.49B | -9.95B | 1.72B | -4.60B |
| Financing Cash Flow | ||||
| -6.56B | -1.52B | -7.08B | 4.55B | 13.62B |
Comerica Technical Analysis
Negative
51.04
Price Trends
60.45
Negative
62.49
Negative
59.21
Negative
Market Momentum
-0.73
Negative
40.84
Neutral
31.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMA, the sentiment is Negative. The current price of 51.04 is below the 20-day moving average (MA) of 56.69, below the 50-day MA of 60.45, and below the 200-day MA of 59.21, indicating a bearish trend. The MACD of -0.73 indicates Negative momentum. The RSI at 40.84 is Neutral, neither overbought nor oversold. The STOCH value of 31.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CMA.
Comerica Risk Analysis
Comerica disclosed 34 risk factors in its most recent earnings report. Comerica reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Comerica Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $6.99B | 15.15 | 7.62% | 1.00% | 14.99% | -16.42% | |
75 Outperform | $7.23B | 9.65 | 8.54% | 3.79% | 5.86% | -10.72% | |
74 Outperform | $6.51B | 9.44 | 11.84% | 1.90% | 11.51% | 7.73% | |
69 Neutral | $6.87B | 12.06 | 15.13% | 3.53% | 7.81% | -2.49% | |
66 Neutral | $6.73B | 10.24 | 10.72% | 5.54% | -6.54% | -21.90% | |
64 Neutral | $13.21B | 9.26 | 9.39% | 4.87% | 16.14% | -8.87% | |
58 Neutral | $6.98B | 8.92 | 12.32% | 2.37% | 13.60% | 8.85% |
* Financial Sector Average
Performance Comparison
CMA
Comerica
51.04
2.70
5.59%
CFR
Cullen/Frost Bankers
107.73
3.05
2.91%
PNFP
Pinnacle Financial Partners
90.04
10.98
13.89%
WBS
Webster Financial
42.37
-2.04
-4.59%
WTFC
Wintrust Financial
98.61
3.92
4.14%
WAL
Western Alliance
63.21
8.11
14.72%
Comerica Earnings Call Summary
Earnings Call Date: Jan 22, 2025 | % Change Since: -22.14% | Next Earnings Date: Apr 18, 2025
Earnings Call Sentiment Neutral
Comerica's earnings call highlighted strong capital management, improved customer deposits, and strategic investments. However, challenges in loan growth, particularly in commercial real estate, and increased noninterest expenses were notable concerns. The overall sentiment is balanced with a positive outlook for 2025, tempered by current hurdles.Highlights
Capital Management and Share Repurchases
Comerica increased its CET1 capital ratio by 80 basis points and resumed share repurchases, returning $100 million in capital in Q4 2024.
Improvement in Customer Deposits
Excluding brokered CDs, customer deposits grew over $800 million or over 1% in Q4, with period-end deposits increasing by $700 million.
Strategic Investments and Technological Advancement
Comerica is advancing strategic priorities, including investing in relationship managers, financial advisers, and technology, with plans to have almost all applications in the cloud or on a SaaS platform by year-end 2025.
Strong Credit Quality
Credit quality remained a strength with net charge-offs at 13 basis points, reflecting disciplined underwriting and historically low levels.
Positive Outlook for 2025
Comerica projects 2% average loan growth excluding commercial real estate, 6% to 7% increase in net interest income, and 4% increase in noninterest income for 2025.
Lowlights
Decline in Average Loans
Average loans declined less than 0.5%, primarily due to expected paydowns in commercial real estate.
Challenges in Commercial Real Estate
A $500 million reduction in commercial real estate loans was reported, impacting overall loan growth.
Noninterest Income Decrease
Fourth quarter noninterest income decreased by $27 million, impacted by a $19 million securities repositioning loss.
Higher Noninterest Expenses
Noninterest expenses increased by $25 million over the prior quarter, influenced by higher legal and litigation-related expenses and increased funding to the charitable foundation.
Company Guidance
During the Comerica Q4 2024 earnings call, the executives provided guidance reflecting a positive outlook for 2025. They projected full-year average loans to remain flat or increase by 1%, excluding the impact of anticipated commercial real estate paydowns, which could result in a 2% growth. Net interest income is expected to rise by 6% to 7% with the benefit of BSBY cessation and a more efficient funding mix. Noninterest income is anticipated to grow by 4%, driven by a 2% increase in customer-related income, while expenses are projected to rise by 3%, with a priority on maintaining expense discipline. The company also plans to continue reducing brokered time deposits, which could lead to a 2% to 3% decline in average deposits but expects customer deposits, excluding brokered CDs, to grow by 1%. Additionally, Comerica intends to manage its CET1 capital ratio well above its 10% strategic target, planning around 11% for 2025, while considering various factors like loan growth and the forward curve in capital decisions. These metrics and the strategic focus on efficiency and customer-related growth highlight their preparation for favorable trends in 2025.Comerica Corporate Events
Business Operations and Strategy
Comerica Executives to Present at 2025 RBC Conference
Positive
Mar 4, 2025
Comerica announced that its executives will present at the 2025 RBC Capital Markets Financial Institutions Conference on March 5, 2025. The presentation will highlight Comerica’s strategic revenue investments aimed at sustainable growth, including enhancing customer loan and deposit trends, and expanding its market presence through targeted initiatives. These efforts are expected to improve revenue growth and returns, positioning Comerica well for future opportunities.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.