FBR Capital Raises Price Target on Comerica (CMA) to $50 Following 2Q EPS Beat

FBR Capital reiterated an Outperform rating on Comerica (NYSE: CMA), and raised the price target to $50.00 (from $48.00), following the company's 2Q earnings report. CMA reported operating EPS of $0.77, above the $0.69 consensus, largely due to lower-than-expected credit costs.

Analyst Bob Ramsey commented, "We reiterate our Outperform rating on CMA and raise our price target to $50 (from $48), following 2Q16 results; our target equals 13.2x 2017 EPS and 1.2x TBV. There was a lot to like this quarter: good loan growth, broad improvement in energy credit trends, and lower-than-expected credit costs. We consider the big news to be the newly announced "GEAR Up" efficiency initiative, which targets a 25% increase in pre-provision net revenue (PPNR) by the end of 2018 and should boost CMA's ROE by 200 bps, enabling it to earn its cost of capital, all without any lift from higher rates. Also of note, CMA's recent CCAR authorization targets a combined payout ratio in excess of 100% over the next year. Trading at just 1.1x TBV, we like CMA shares. To reflect a lower provision and operating expenses, we raise our 2016 operating EPS estimate to $2.75 (from $2.65) and our 2017 EPS estimate to $3.80 (from $3.60)."

For an analyst ratings summary and ratings history on Comerica click here. For more ratings news on Comerica click here.

Shares of Comerica closed at $44.79 yesterday.

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