Canadian Bank of Commerce (CM) AI Stock Analysis

• Market Cap: C$92.55B
• Dividend Yield: 3.85%
• Average Volume (3M): 3.47M
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.89
• Revenue Growth: 5.38%
• EPS Growth: 21.68%
• Country: CA
• Employees: 48,698
• Sector: Financial
• Sector Strength: 68
• Industry: Banks - Diversified
• EPS (TTM): 2.05
• Shares Outstanding: 934,190,550
• 10 Day Avg. Volume: 2,982,206
• 30 Day Avg. Volume: 3,474,456
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$100.45
• Price Target Upside: 1.39% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 83 Outperform
• Price Target: C$114.00 ▲(15.07%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 Performance

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

Earnings Growth

Canadian Personal & Business Banking showed earnings growth driven by net interest margin expansion and positive operating leverage.

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.

U.S. Operations

U.S. Commercial & Wealth earnings missed estimates due to lower-than-expected fee revenue and assets under administration.

Canadian Bank of Commerce Business Overview & Revenue Model

Company Description

The Canadian Bank of Commerce (CM), commonly known as CIBC, is one of Canada's leading financial institutions, offering a comprehensive range of financial products and services. Headquartered in Toronto, Ontario, CIBC operates in key sectors including personal and business banking, wealth management, and capital markets. The bank provides services such as banking accounts, loans, credit cards, investment advisory, and wealth management solutions to individuals, businesses, and institutional clients across Canada and internationally.

How the Company Makes Money

CIBC generates revenue through a diversified business model comprising several key revenue streams. The primary sources of income include net interest income from loans and deposits, which is the difference between the interest earned on assets like loans and the interest paid on liabilities such as deposits. The bank also earns substantial fees and commissions from diverse financial services, including investment management, credit card services, and transaction processing. In addition, CIBC's capital markets division contributes to revenue through trading activities, underwriting, and advisory services. The bank benefits from strategic partnerships and investments, enhancing its product offerings and market reach. CIBC's earnings are also influenced by factors such as economic conditions, interest rate fluctuations, and regulatory environments in the regions where it operates.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	25.53B	21.31B	21.76B	19.96B	18.67B
Gross Profit	25.53B	23.29B	21.76B	19.96B	18.67B
EBITDA	12.36B	8.05B	8.97B	9.28B	5.80B
Net Income	7.12B	5.00B	6.22B	6.43B	3.79B
Balance Sheet
Total Assets	1.04T	975.72B	943.60B	837.68B	769.55B
Cash, Cash Equivalents and Short-Term Investments	93.25B	80.52B	92.72B	88.15B	117.07B
Total Debt	208.49B	194.50B	187.45B	164.17B	45.86B
Total Liabilities	982.98B	922.51B	893.22B	791.85B	728.22B
Stockholders Equity	58.73B	52.98B	50.18B	45.65B	41.15B
Cash Flow
Free Cash Flow	10.00B	11.14B	21.61B	-4.17B	59.99B
Operating Cash Flow	11.09B	12.15B	22.71B	-3.33B	60.30B
Investing Cash Flow	-20.75B	-20.76B	-24.39B	-3.51B	-19.41B
Financing Cash Flow	-2.61B	-2.16B	-1.61B	-1.95B	-1.22B

Canadian Bank of Commerce Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 99.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 99.07 is below the 20-day moving average (MA) of 99.93, above the 50-day MA of 96.22, and above the 200-day MA of 88.34, indicating a neutral trend. The MACD of 1.09 indicates Positive momentum. The RSI at 53.26 is Neutral, neither overbought nor oversold. The STOCH value of 14.50 is Positive, 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	C$92.55B	12.41	13.19%	3.85%	5.38%	21.68%
TD	79 Outperform	$175.33B	10.37	14.27%	4.17%	13.12%	61.99%
RY	78 Outperform	$250.30B	14.10	14.17%	3.34%	6.03%	15.60%
NA	78 Outperform	$56.19B	13.53	13.42%	3.18%	17.13%	14.73%
BMO	71 Outperform	$110.42B	14.19	9.88%	4.55%	6.98%	32.63%
BNS	71 Outperform	$95.32B	15.45	8.00%	7.13%	3.72%	-17.99%
Sector *	67 Neutral	$17.01B	11.59	9.13%	3.95%	10.67%	1.35%