) -- Shares of Comerica
(CMA - Get Report)
were up 1% in afternoon trading, to $39.61, despite analyst comment that the stock is relatively expensive based on earnings projections.
Christopher Mutascio of Stifel Nicolaus reiterated his hold rating on the shares, but cut his 2011 earnings estimate to $1.73 a share from $2.05 and his 2011 estimate to $2.17 from $2.35, "to reflect the acquisition of
," which was announced January 18 and is expected to be completed in the second quarter.
Comerica agreed to pay about $1 billion in an exchange of shares for its Houston competitor.
Mutascio said the "primary drivers" for his reduced earnings estimates for Comerica were "an increased share count (23 million shares) and merger-related expenses," and that his estimates also reflected "cost savings of roughly $20 million in 2011, and $36 million in 2012."
"Despite appearing relatively attractive at 1.2 times tangible book, shares of Comerica trade at 18.1 times" Mutascio's 2012 earnings estimate. The analyst said that Comerica's forward P/E multiple was one of the highest within his firm's "large cap bank coverage universe."
Comerica had $53.7 billion in total assets as of December 31.
Looking at other bank holding companies with between $50 billion and $100 billion in assets, the forward price-to-earnings ratios based on the earnings estimates for 2012 among analysts polled by Thomson were 10.8 for
, 12.1 for
M&T Bank Corp
(MTB - Get Report)
, 13.3 for
Hudson City Bancorp
, 14.5 for
(NTRS - Get Report)
, 15.1 for
(ZION - Get Report)
and 16.8 for
Marshall & Ilsley
, according to data provided by SNL Financial.
M&I agreed in December to be acquired by
Bank of Montreal
(BMO - Get Report)
, in a deal valued at $5.8 billion, expected to close in July.
Written by Philip van Doorn in Jupiter, Fla.
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