This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 Big Banks Stocks to Watch In the 'Kitchen Sink' Quarter (Update 3)

9. Comerica

Shares of Comerica (CMA) of Dallas closed at $32.34 Monday, trading just below tangible book value, and for 12.3 times the consensus 2013 EPS estimate of $2.64. The consensus 2014 EPS estimate is $2.74.

The shares returned 20% during 2012, following a 38% decline in 2011.

Based on a quarterly payout of 15 cents, the shares have a dividend yield of 1.86%.

Comerica is scheduled to report its fourth-quarter results on Jan. 16, with the consensus among analysts being a profit of 65 cents, increasing from 61 cents in the third quarter, and 48 cents in the fourth quarter of 2011.

Brian Klock on Dec. 12 lowered his rating for Comerica to "Underperform," and lowered his price target for the shares by a dollar to $28, saying "CMA is a well-run bank, with excess capital, but in our opinion the difficult interest rate and economic environment is more challenging to the company's extremely asset sensitive business model and earnings power.

During the third quarter, Comerica's net interest income declined to $427 million, from $435 million in the second quarter, although it increased from $423 million in the third quarter of 2011. The company's net interest margin -- the difference between the average yield on loans and investments and the average cost for deposits and borrowings -- narrowed to 2.96%, from 3.10% the previous quarter, and 3.18% a year earlier.

Klock also said that "consensus estimates are too high for 2013 & 2014 and with a lack of earnings growth expected over the next two years, we believe the shares will underperform the large regional peer bank in 2013." He estimates that Comerica will report fourth-quarter earnings of 63 cents a share and that the bank will earn $2.60 a share in 2013 and in 2014.

Oppenheimer Securities analyst Terry McEvoy on Wednesday downgraded Comerica to a "Perform" rating from "Market Perform," saying that recent strength for the stock "reflects the rise in the 10-year Treasury yield given the company's asset-sensitive balance sheet. We would remind investors that 85% of Comerica's loan portfolio is variable rate and about 75% is indexed to one-month LIBOR. One-month LIBOR has been hovering around 21bps over the past few weeks while the yield on the 10-year security has spiked above 1.90%."

"Therefore, we do not see a meaningful impact to Comerica's net interest margin or earnings in 1H13 if one-month LIBOR remains unchanged," he said. McEvoy added that "Comerica's earnings have to potential to nearly double once we enter a more normal interest rate environment. Unfortunately, that still appears to be some years into the future."

Comerica's shares pulled back 1% on Wednesday to close at $31.60.

CMA Chart CMA data by YCharts

Interested in more on Comerica? See TheStreet Ratings' report card for this stock.
3 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.04 -0.67%
C $44.20 -1.00%
FITB $17.48 -0.34%
RF $9.04 0.06%
WFC $48.92 -0.03%


Chart of I:DJI
DOW 17,637.36 -13.90 -0.08%
S&P 500 2,049.02 -2.10 -0.10%
NASDAQ 4,717.8970 -7.7420 -0.16%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs