Wells Fargo Cuts Comerica (CMA) and First Horizon National (FHN) to Underperform
Tweet
Share
E-mailGet Alerts CMA Hot Sheet
Price: $88.67 --0%
Rating Summary:
6 Buy, 28 Hold, 7 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
6 Buy, 28 Hold, 7 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Join SI Premium – FREE
Wells Fargo downgraded Comerica (NYSE: CMA) and First Horizon National (NYSE: FHN) from Market Perform to Underperform with a price targets of $34-$37 and $10-$11, respectively. Analyst Matthew H. Burnell believes the stocks already reflect benefits of higher interest rates.
"We are downgrading CMA and FHN based on the same primary rationale: 1) while both firms are poised to be among the largest beneficiaries of higher short-term interest rates, we believe this potential benefit is largely reflected in the current valuations; (2) CMA and FHN's current and future expected returns (<10% core ROTCE in 2013-2014) imply that both stocks should continue to trade at a valuation at or below tangible book value for some time given the inability to cover the cost of capital in the current operating environment. Fed funds futures currently imply +100 bps of tightening by mid-2016, suggesting that considerable patience will be required before investors realize the benefits of higher interest rates," said Burnell.
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 $37.59 yesterday.
"We are downgrading CMA and FHN based on the same primary rationale: 1) while both firms are poised to be among the largest beneficiaries of higher short-term interest rates, we believe this potential benefit is largely reflected in the current valuations; (2) CMA and FHN's current and future expected returns (<10% core ROTCE in 2013-2014) imply that both stocks should continue to trade at a valuation at or below tangible book value for some time given the inability to cover the cost of capital in the current operating environment. Fed funds futures currently imply +100 bps of tightening by mid-2016, suggesting that considerable patience will be required before investors realize the benefits of higher interest rates," said Burnell.
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 $37.59 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Piper Sandler Reiterates Overweight Rating on Estee Lauder (EL), 'F4Q26 Preview'
- Wells Fargo Downgrades Roku Inc. (ROKU) to Equal Weight
- Freedom Broker Upgrades Serve Robotics (SERV) to Buy
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS View, Downgrades, Hot DowngradesRelated Entities
Wells FargoSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
