NEW YORK (
-- Comerica Inc
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.
Highlights from the ratings report include:
- COMERICA INC has improved earnings per share by 35.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, COMERICA INC turned its bottom line around by earning $0.69 versus -$0.79 in the prior year. This year, the market expects an improvement in earnings ($2.25 versus $0.69).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 37.1% when compared to the same quarter one year prior, rising from $70.00 million to $96.00 million.
- CMA, with its decline in revenue, underperformed when compared the industry average of 20.6%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Net operating cash flow has decreased to $312.00 million or 27.61% when compared to the same quarter last year. Despite a decrease in cash flow of 27.61%, COMERICA INC is in line with the industry average cash flow growth rate of -36.32%.
- CMA's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 33.14%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
Comerica Incorporated, through its subsidiaries, provides various financial products and services in Texas, Arizona, California, Florida, and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico. The company has a P/E ratio of 11.3, below the average banking industry P/E ratio of 11.5 and below the S&P 500 P/E ratio of 17.7. Comerica has a market cap of $4 billion and is part of the
industry. Shares are down 44.5% year to date as of the close of trading on Wednesday.
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