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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

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 ChartCMA data by YCharts

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

3 of 11

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,454.10 -109.20 -0.66%
S&P 500 1,922.99 -7.68 -0.40%
NASDAQ 4,342.5590 -27.2140 -0.62%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs