How Will Comerica (CMA) Stock Be Affected by This Analyst Action Today?

NEW YORK (TheStreet) -- Shares of Comerica Inc. (CMA) are up 0.08% to $50.48 after the company was upgraded to "buy" from "hold" at Wunderlich Securities.

Wunderlich rose the financial product and services company's ratings because it said the company has a good track record and is leveraged to rising interest rates.

A $65 price target was set for Comerica. 

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TheStreet Ratings team rates COMERICA INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate COMERICA INC (CMA) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • COMERICA INC has improved earnings per share by 5.3% 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 two years. We feel that this trend should continue. During the past fiscal year, COMERICA INC increased its bottom line by earning $2.86 versus $2.68 in the prior year. This year, the market expects an improvement in earnings ($3.11 versus $2.86).
  • 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 5.6% when compared to the same quarter one year prior, going from $143.00 million to $151.00 million.
  • The gross profit margin for COMERICA INC is currently very high, coming in at 94.55%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.84% is above that of the industry average.
  • Net operating cash flow has significantly increased by 1366.66% to $132.00 million when compared to the same quarter last year. In addition, COMERICA INC has also vastly surpassed the industry average cash flow growth rate of -97.39%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 28.97% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • You can view the full analysis from the report here: CMA Ratings Report
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