Canadian Bank of Commerce (CM) AI Stock Analysis

• Market Cap: $94.91B
• Dividend Yield: 3.76%
• Average Volume (3M): 2.39M
• Price to Earnings (P/E): 12.7
• Beta (1Y): 0.85
• Revenue Growth: 5.38%
• EPS Growth: 21.68%
• Country: CA
• Employees: 48,698
• Sector: Financial
• Sector Strength: 69
• Industry: Banks - Diversified
• EPS (TTM): 2.05
• Shares Outstanding: 934,190,550
• 10 Day Avg. Volume: 1,467,277
• 30 Day Avg. Volume: 2,387,620
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.57
• Enterprise Value/Revenue: 6.97
• Enterprise Value/Gross Profit: 9.28
• Enterprise Value/Ebitda: 19.99
• 1Y Price Target: $103.12
• Price Target Upside: 1.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 83 Outperform
• Price Target: C$114.00 ▲(12.63% Upside)

CIBC demonstrates robust financial performance and technical strength, supported by solid earnings growth and strategic focus on AI and digital enhancements. While valuation metrics are attractive, high leverage and increased provisions for credit losses pose potential risks. The earnings call highlighted significant growth in income and strategic advancements, contributing positively to the overall score.

Positive Factors

Capital Markets

CM's earnings were boosted by strong trading revenues and higher market-related fees in Capital Markets.

Capital Strength

CIBC’s CET1 ratio currently sits at 13.4%, far above the firm’s 12.5% target range, giving CM flexibility for dividend growth, organic growth, buybacks, and potential tuck-in M&A.

Financial Performance

CM reported solid Q2 results with EPS beating estimates due to capital markets strength and lower-than-expected PCLs.

Negative Factors

Geopolitical Risk

There is a risk of further performing builds in Q3 if the credit model changes, despite some accounting for geopolitical volatility.

U.S. Earnings

U.S. Commercial & Wealth earnings missed estimates due to lower-than-expected fee revenue and AUA, despite AUA growth.

Canadian Bank of Commerce Business Overview & Revenue Model

Company Description

The Canadian Bank of Commerce (CM) is a leading financial institution in Canada, providing a wide range of banking and financial services to individuals, businesses, and institutions. Operating primarily in the retail and commercial banking sectors, CM offers products such as personal and business banking accounts, loans, mortgages, investment services, and wealth management solutions. The bank is committed to delivering customer-centric services and leveraging technology to enhance customer experience.

How the Company Makes Money

The Canadian Bank of Commerce generates revenue through various key streams, primarily focusing on net interest income from loans and deposits. The bank earns interest from loans provided to customers, which is typically higher than the interest it pays on deposits, creating a profit margin. Additionally, CM generates fee-based income from services such as account maintenance fees, transaction fees, and advisory services. Investment income from wealth management and investment products also contributes to the bank's revenue. Significant partnerships with financial technology firms allow CM to innovate and enhance its service offerings, further boosting its earnings potential.

Canadian Bank of Commerce Financial Statement Overview

Summary

The Canadian Bank of Commerce exhibits strong financial performance. The income statement shows robust revenue growth and profitability with a TTM gross profit margin of 59.1% and a net profit margin of 17.6%. The balance sheet is stable, though leveraged, with a debt-to-equity ratio typical for the banking industry. Cash flows are solid, with significant free cash flow growth, though sustainability should be monitored.

Income Statement

The Canadian Bank of Commerce demonstrates strong financial performance in its income statement. The TTM (Trailing-Twelve-Months) gross profit margin is approximately 59.1%, indicating efficient cost management. The net profit margin stands at 17.6%, reflecting solid profitability. Revenue growth is robust, with a significant increase of 73.9% from the previous year, signaling strong market demand and effective business strategies. EBIT margin is healthy at 24.8%, and EBITDA margin is 27.4%, both indicating good operational efficiency. Overall, the income statement reveals robust growth and profitability.

Balance Sheet

The balance sheet of the Canadian Bank of Commerce shows a stable financial position. The debt-to-equity ratio is approximately 5.66, which is relatively high, suggesting significant leverage but typical for the banking industry. The return on equity (ROE) is strong at 12.7%, indicating effective use of equity capital to generate profits. The equity ratio is 5.7%, which is low but expected for banks due to their leveraged nature. The bank's large asset base and equity growth are positive signs, despite the high debt levels.

Cash Flow

The cash flow statement reflects a stable financial performance with some areas for improvement. The free cash flow growth rate is impressive at 126.1%, indicating enhanced cash generation capabilities. The operating cash flow to net income ratio is 1.83, suggesting strong cash generation relative to net profits. However, the free cash flow to net income ratio is 2.89, which is very high, indicating potential reinvestment opportunities. Overall, cash flows are strong but should be monitored for sustainability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	34.95B	25.53B	21.31B	20.78B	19.86B	16.25B
Gross Profit	26.24B	25.53B	21.29B	20.80B	19.80B	16.25B
EBITDA	12.19B	12.36B	8.05B	8.97B	9.28B	5.80B
Net Income	7.82B	7.12B	5.00B	6.22B	6.43B	3.79B
Balance Sheet
Total Assets	1.09T	1.04T	975.72B	943.60B	837.68B	769.55B
Cash, Cash Equivalents and Short-Term Investments	132.62B	93.25B	80.52B	92.72B	88.15B	117.07B
Total Debt	349.01B	208.49B	194.50B	187.45B	164.17B	45.86B
Total Liabilities	1.03T	982.98B	922.51B	893.22B	791.85B	728.22B
Stockholders Equity	61.67B	58.73B	52.98B	50.18B	45.65B	41.15B
Cash Flow
Free Cash Flow	13.09B	10.00B	11.14B	21.61B	-4.17B	59.99B
Operating Cash Flow	14.19B	11.09B	12.15B	22.71B	-3.33B	60.30B
Investing Cash Flow	-16.50B	-20.75B	-20.76B	-24.39B	-3.51B	-19.41B
Financing Cash Flow	5.99B	-2.61B	-2.16B	-1.61B	-1.95B	-1.22B

Canadian Bank of Commerce Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 101.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CM, the sentiment is Positive. The current price of 101.22 is above the 20-day moving average (MA) of 100.59, above the 50-day MA of 98.50, and above the 200-day MA of 89.48, indicating a bullish trend. The MACD of 0.84 indicates Positive momentum. The RSI at 59.47 is Neutral, neither overbought nor oversold. The STOCH value of 59.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CM.

Canadian Bank of Commerce Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CM	83 Outperform	$94.91B	12.73	13.19%	3.76%	5.38%	21.68%
TD	81 Outperform	$179.46B	10.61	14.27%	4.05%	13.12%	61.99%
NA	78 Outperform	$59.10B	14.23	13.42%	3.01%	13.80%	9.06%
BMO	78 Outperform	$113.30B	14.56	9.88%	4.38%	6.98%	32.63%
RY	76 Outperform	$267.12B	15.05	14.17%	3.11%	6.03%	15.60%
BNS	71 Outperform	$97.86B	15.86	8.00%	6.85%	0.44%	-18.29%
Sector *	68 Neutral	$17.56B	11.61	10.34%	3.76%	9.69%	0.41%