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

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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