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 data by YCharts
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