With one of the strongest net betas (loan beta minus deposit beta) in the banking sector, Comerica (CMA)
has continued to outperform, with the shares beating regional peers
over the last year and on a year-to-date basis, though lagging more
recently. Although Comerica isn’t posting particularly strong loan
growth, that’s actually not such a bad thing right now, as loan growth
isn’t really what the market is prioritizing or valuing (EPS
revisions/growth are stronger drivers at the moment).
Comerica
continues to look like a good name to consider for investors who want
to play above-average near-term earnings growth, but aren’t as worried
about valuation relative to long-term benchmarks. Rising deposit costs
do remain a worry, but between regulatory relief, spread leverage,
operating leverage, and perhaps some M&A options, Comerica still
offers a lot of what the Street currently wants in a bank stock.
Read more here:
Exceptional Rate Leverage Continues To Drive Comerica
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