Comerica (CMA) Stock Rises on Analyst Upgrade

NEW YORK (TheStreet) -- Comerica (CMA) shares are up 1.39% to $53.26 in early market trading on Wednesday after the financial services company was upgraded to "buy" from "neutral" by analysts at Bank of America/Merrill Lynch.

The firm set a $60 price target on the company's shares, a potential 12.7% upside from the stocks current trading price.

Analysts at the firm believe that the company will continue to see an increase in its price to earnings ratio.

If the company continues to show strength, analyst Erika Najarian sees it becoming a potential takeover target with a buy range between $66 and $70 per share.

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 multiple strengths, 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 revenue growth, good cash flow from operations, expanding profit margins, attractive valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • CMA's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 7.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has significantly increased by 57.94% to $338.00 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 -37.14%.
  • The gross profit margin for COMERICA INC is currently very high, coming in at 94.79%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 19.39% trails the industry average.
  • COMERICA INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, COMERICA INC increased its bottom line by earning $3.15 versus $2.86 in the prior year. For the next year, the market is expecting a contraction of 4.8% in earnings ($3.00 versus $3.15).
  • You can view the full analysis from the report here: CMA Ratings Report

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