Odeon Capital Upgrades Comerica (CMA) to Buy; 'Unlikely to Fail'

June 5, 2023 6:26 AM EDT
Get Alerts CMA Hot Sheet
Price: $45.22 +0.31%

Rating Summary:
    15 Buy, 20 Hold, 4 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 12 | Down: 18 | New: 24
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Odeon Capital analyst Dick Bove upgraded Comerica (NYSE: CMA) from Hold to Buy with a price target of $47.24.

The analyst commented, "The rating on Comerica is being raised from Hold to Buy. The reason is that the valuation of this stock has fallen to a level which makes it attractive:

  • It has declined from a high of $101.24 per share in January 2022 to a low of $31.21 per share in early May this year. It is now at $40.93 per share.
  • The reasons for the decline, explained below, indicated that there was a great deal of logic behind the stock price decline.
  • This company basically ticks off every potential negative facing the banking industry.

However, despite these negatives

  • This company is unlikely to fail.
  • The real value of its assets is more reasonably stated on its balance sheet than for most other banks
  • It is liquid.
  • Its cash flow is such that it is likely to maintain its dividend.

Therefore, valuing it below book value at a roughly 7.0% yield seems excessive. Moreover, its attractiveness as an acquisition candidate is undiminished. For investors unwilling to step up to the common, the bank has an attractive 5.625% preferred issue with a 10.89% yield to worst."

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 $40.93 yesterday.

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