Commerce Bancshares (CBSH) PT Lowered to $63 at Piper Sandler Post 3Q NII Miss

Piper Sandler analyst Nathan Race lowered the price target on Commerce Bancshares (NASDAQ: CBSH) to $63.00 (from $70.00) while maintaining a Neutral rating.

The analyst commented: "Lower Ests Post 3Q NII Miss; Catalysts Lacking to Reverse YTD Underperformance; Our Take & Updated Estimates/PT. While CBSH has underperformed the KRE by 12% YTD resulting in shares' current valuation dipping to among its cheapest relative and absolute levels within the past five years (see Exhibit 3), we remain Neutral given limited visibility of stand-alone catalysts to materially expand CBSH's current premium multiples (of 12.2x/12.3x consensus 2025E/26E EPS vs. peers at 10.8x/10.4x). We would become more constructive with consistently stronger loan growth and a lower likelihood for additional Fed rate cuts given CBSH's highly asset sensitive B/S. We lower our 2025E / 2026E operating EPS by 2%-3% to $4.22/$4.20 (excludes FNBT deal impacts) to reflect lower NII and NIM outlooks following the 3Q shortfall. Our PT moves to $63 (-$7) based on 15.0x our 2026E EPS (-1.0x on lower peer multiples) and in-line with shares' historical L-T premium of 4x-5x."

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