Canadian Bank of Commerce (CM) AI Stock Analysis

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Canadian Bank of Commerce

(TSX:CM)

Rating:77Outperform

Price Target:

C$106.00

▲(13.03%Upside)

The Canadian Bank of Commerce scores well due to its strong financial performance and robust earnings growth, as highlighted in the latest earnings call. Technical analysis suggests bullish momentum, though caution is advised due to potential overbought conditions. Valuation metrics support a favorable view, with a reasonable P/E ratio and attractive dividend yield. Risks include increasing credit loss provisions and potential mortgage growth challenges.

Positive Factors

Analyst Confidence

Analyst maintains an 'Outperform' rating and has increased the target price to $102, reflecting confidence in the bank's future performance.

Earnings

The stock's strong performance was driven by significant earnings in Capital Markets and Canadian Personal & Business Banking.

Financial Stability

The bank maintained strong capital levels with a CET1 ratio of 13.4% and repurchased 6 million shares, indicating financial stability.

Negative Factors

Credit Model Risk

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

Earnings Miss

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

Canadian Bank of Commerce (CM) vs. iShares MSCI Canada ETF (EWC)

Market Cap

$87.18B

Dividend Yield4.14%

Average Volume (3M)2.87M

Price to Earnings (P/E)11.7

Beta (1Y)0.90

Revenue Growth5.38%

EPS Growth21.68%

CountryCA

Employees48,698

SectorFinancial

Sector Strength75

IndustryBanks - Diversified

Share Statistics

EPS (TTM)2.05

Shares Outstanding934,190,550

10 Day Avg. Volume2,933,459

30 Day Avg. Volume2,868,453

Financial Highlights & Ratios

PEG Ratio-2.24

Price to Book (P/B)1.11

Price to Sales (P/S)0.00

P/FCF Ratio2.59

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$99.69

Price Target Upside6.30% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering10

Canadian Bank of Commerce Business Overview & Revenue Model

Company DescriptionThe Canadian Bank of Commerce (CM), operating under the name CIBC, is one of Canada's leading financial institutions, offering a comprehensive range of financial products and services. The bank serves personal, business, and institutional clients across Canada and globally through its various divisions, which include retail and business banking, wealth management, and capital markets. CIBC is committed to helping its clients achieve their financial goals by providing innovative solutions and personalized advice.

How the Company Makes MoneyCIBC makes money through a diverse range of revenue streams, primarily generated from interest income, non-interest income, and capital markets activities. Interest income is derived from loans and mortgages offered to personal and business clients, where the bank earns interest on the amounts borrowed. Non-interest income includes fees from banking services, investment management, and advisory services in wealth management. Additionally, CIBC generates revenue from its capital markets operations, including trading activities, underwriting services, and corporate finance advisory. Strategic partnerships and collaborations also play a role in enhancing CIBC's service offerings and expanding its market reach, contributing to overall earnings.

Canadian Bank of Commerce Earnings Call Summary

Earnings Call Date:May 29, 2025

(Q2-2025)

% Change Since: -0.22%|

Next Earnings Date:Aug 28, 2025

Earnings Call Sentiment Positive

CIBC reported strong financial results with significant growth in earnings and revenue, improved operating leverage, and a robust capital position. Advancements in AI and recognition for customer focus were highlighted. However, increased provisions for credit losses and challenges related to mortgage growth and trade uncertainties presented potential concerns.

Q2-2025 Updates

Positive Updates

Strong Financial Performance

CIBC reported a net income of $2 billion and earnings per share of $2.05, both up 17% from the prior year. Pre-provision pretax earnings increased by 19%, and revenues were up 14% driven by strong trading activity and higher fee income.

Improved Operating Leverage

CIBC achieved 430 basis points of operating leverage, demonstrating effective expense management relative to revenues.

Robust Capital Position

The bank maintained a healthy CET1 ratio of 13.4% and returned $1.4 billion in capital to shareholders, including $500 million in share repurchases.

Recognition for Customer Focus

CIBC received Forrester's customer-obsessed Enterprise Award for North America, highlighting its dedication to placing clients at the center of its operations.

Growth in U.S. Capital Markets

U.S. region Capital Markets revenue increased by 37% from the prior year, showcasing successful expansion and connectivity across the bank.

Advancements in AI Integration

CIBC's AI platform saved an estimated 200,000 hours during a successful pilot, and the bank was the first major Canadian bank to sign the Government of Canada's voluntary code of conduct for generative artificial intelligence.

Negative Updates

Increased Provisions for Credit Losses

Total provisions for credit losses were up 18% from a year ago, driven by higher performing provisions reflecting macroeconomic uncertainties.

Challenges in Mortgage Growth

Mortgage growth was flat, and the bank indicated a selective approach to mortgages, focusing on clients with strong relationship potential.

Pressure from Trade Uncertainties

The ongoing discussions and uncertainties around trade policy were highlighted as potential challenges impacting the bank's ability to predict future outcomes.

Company Guidance

During the CIBC Q2 Quarterly Results Conference Call, the bank provided guidance on several key metrics. CIBC reported adjusted net income of $2 billion and earnings per share of $2.05, reflecting a 17% increase from the previous year. The bank achieved a return on equity of 13.9%, up 50 basis points year-over-year, and maintained a healthy CET1 ratio of 13.4%. CIBC also highlighted robust pre-provision pretax earnings growth of 19% and a 14% increase in revenues, driven by strong trading activity, volume growth, and higher fee income. The bank repurchased 6 million common shares during the quarter, contributing to its capital management strategy. Despite an 18% increase in total provisions for credit losses, CIBC's impaired provisions remained within previous guidance. The bank emphasized its strategic priorities, including expanding its wealth franchise, enhancing digital banking capabilities, and leveraging AI to improve operational efficiency.

Canadian Bank of Commerce Financial Statement Overview

Summary

Overall, the Canadian Bank of Commerce exhibits solid financial health with strong revenue growth and profitability. While leverage is moderate, the bank's ability to generate cash flow is robust, although some volatility in free cash flow presents a risk. Continued focus on managing operational costs and maintaining stable cash flow will be crucial for sustaining financial performance.

Income Statement

Very Positive

The Canadian Bank of Commerce demonstrates strong revenue growth, with a TTM revenue increase of 4.1% compared to the previous year. The gross profit margin and net profit margin are robust at 100% and 28.5%, respectively, reflecting efficient cost management. However, there's a notable decline in EBIT margin from the previous periods, suggesting rising operational costs.

Balance Sheet

Positive

The bank maintains a healthy equity position with a debt-to-equity ratio of 3.55, indicating a moderate level of leverage. The equity ratio is at 5.67%, which is typical for the banking industry but could be improved. The return on equity shows a solid performance at 12.33%, indicating effective use of shareholder funds.

Cash Flow

Positive

Operating cash flow is strong, with a TTM figure significantly higher than net income, yielding a high operating cash flow to net income ratio of 3.87. The free cash flow has shown significant growth of 182.2% over the previous year, although fluctuations in free cash flow over the years indicate potential volatility in cash generation capabilities.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
26.57B	25.53B	21.31B	21.76B	19.96B	18.67B
	Gross Profit
26.57B	25.53B	23.29B	21.76B	19.96B	18.67B
	EBIT
11.07B	11.19B	9.56B	17.49B	8.30B	4.89B
	EBITDA
12.25B	12.36B	8.05B	8.97B	9.28B	5.80B
	Net Income Common Stockholders
7.56B	7.12B	5.00B	6.22B	6.43B	3.79B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
127.57B	93.25B	80.52B	92.72B	88.15B	117.07B
	Total Assets
1.08T	1.04T	975.72B	943.60B	837.68B	769.55B
	Total Debt
217.97B	208.49B	194.50B	187.45B	164.17B	45.86B
	Net Debt
170.16B	152.46B	131.33B	114.13B	94.90B	-16.66B
	Total Liabilities
1.02T	982.98B	922.51B	893.22B	791.85B	728.22B
	Stockholders Equity
61.34B	58.73B	52.98B	50.18B	45.65B	41.15B
Cash Flow		Free Cash Flow
28.21B	10.00B	11.14B	21.61B	-4.17B	59.99B
	Operating Cash Flow
29.29B	11.09B	12.15B	22.71B	-3.33B	60.30B
	Investing Cash Flow
-46.90B	-20.75B	-20.76B	-24.39B	-3.51B	-19.41B
	Financing Cash Flow
25.53B	-2.61B	-2.16B	-1.61B	-1.95B	-1.22B

Canadian Bank of Commerce Technical Analysis

Technical Analysis Sentiment

Positive

Last Price93.78

Price Trends

50DMA

88.88

Positive

100DMA

86.49

Positive

200DMA

86.25

Positive

Market Momentum

MACD

1.08

Positive

RSI

64.06

Neutral

STOCH

63.72

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 93.78 is above the 20-day moving average (MA) of 93.49, above the 50-day MA of 88.88, and above the 200-day MA of 86.25, indicating a bullish trend. The MACD of 1.08 indicates Positive momentum. The RSI at 64.06 is Neutral, neither overbought nor oversold. The STOCH value of 63.72 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

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RY	81 Outperform	$246.78B	13.90	14.17%	3.39%	6.03%	15.60%
TD	79 Outperform	$168.97B	9.99	14.27%	4.34%	13.12%	61.99%
NA	78 Outperform	$53.20B	12.82	13.42%	3.31%	17.13%	14.73%
CM	77 Outperform	$87.18B	11.69	13.19%	4.14%	5.38%	21.68%
BMO	72 Outperform	$104.84B	13.47	9.88%	4.39%	6.98%	32.63%
BNS	71 Outperform	$92.75B	15.03	8.00%	5.71%	3.72%	-17.99%
Sector *	64 Neutral	$12.73B	9.77	7.84%	78.17%	12.05%	-7.99%

* Financial Sector Average

Performance Comparison

TSE:CM

Canadian Bank of Commerce

93.78

31.87

51.48%

TSE:NA

National Bank of Canada

135.09

32.14

31.22%

TSE:BMO

Bank Of Montreal

145.57

36.23

33.13%

TSE:TD

Toronto Dominion Bank

97.69

27.50

39.17%

TSE:RY

Royal Bank Of Canada

175.33

38.70

28.32%

TSE:BNS

Bank Of Nova Scotia

74.35

16.02

27.46%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.