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 Sterling Bancshares (SBIB)," 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 Huntington Bancshares (HBAN), 12.1 for M&T Bank Corp (MTB), 13.3 for Hudson City Bancorp (HCBK), 14.5 for Northern Trust (NTRS), 15.1 for Zions Bancorporation (ZION) and 16.8 for Marshall & Ilsley (MI), according to data provided by SNL Financial. M&I agreed in December to be acquired by Bank of Montreal (BMO), in a deal valued at $5.8 billion, expected to close in July. -- Written by Philip van Doorn in Jupiter, Fla. To contact the writer, click here: Philip van Doorn. To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn. To submit a news tip, send an email to: firstname.lastname@example.org.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV