The last six months have seen a definite uptick in expectations for a new rate-tightening cycle, as one of the perennially most rate-sensitive banks out there, Comerica (NYSE:CMA) has shot higher, rising about 30% since my last update and outperforming larger bank peers by a similar amount. Given Comerica’s significant leverage to variable-rate loans, considerable excess cash, and heavily commercial-weighted loan book, this is definitely a good way to play higher rates and improving business activity.
Because Comerica is so sensitive to rates, it’s a tougher bank to model on a longer-time basis – in just the last 90 days, the sell-side average EPS estimate for 2023 has risen $1.35, or about 20%. I have my concerns about Comerica as a long-term buy-and-hold name, but the shares do seem to still offer some near-term upside.
Read the full article here:
Comerica Offers Focused Exposure To Rates And Business Growth
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