NEW YORK (TheStreet) -- Commerce Bancshares (CBSH) stock is down -2.4% to $44.52 in trading on Thursday.
The drop follows the company's premarket release of its first quarter 2014 earnings report.
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Commerce Bancshares reported earnings of 67 cents per share, up from 63 cents per share in first quarter 2013 -- a 6.3% increase-- but still missed Capital IQ consensus estimates of 68 cents per share.
Year over year first quarter net income rose 5.4% to $64.3 million in 2014 from $61 million in 2013.
TheStreet Ratings team rates COMMERCE BANCSHARES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate COMMERCE BANCSHARES INC (CBSH) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for COMMERCE BANCSHARES INC is currently very high, coming in at 95.26%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.38% significantly outperformed against the industry average.
- Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 25.93% which was in line with the performance of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- COMMERCE BANCSHARES INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COMMERCE BANCSHARES INC reported lower earnings of $2.73 versus $2.76 in the prior year. This year, the market expects an improvement in earnings ($2.84 versus $2.73).
- The change in net income from the same quarter one year ago has exceeded that of the Commercial Banks industry average, but is less than that of the S&P 500. The net income has decreased by 1.3% when compared to the same quarter one year ago, dropping from $66.79 million to $65.92 million.
- You can view the full analysis from the report here: CBSH Ratings Report