Comerica Has Thawed A Bit, But Expectations Are Still Modest

I don’t really evaluate or recommend stocks on a short-term return basis, but I won’t pretend that it hasn’t been nice to see Comerica (CMA) jump over 10% (beating underlying regional bank indices by about 5%) since my December update when I flagged expectations/sentiment as unusually low. Better still, it looks like expectations are still quite modest even after this stock and this sector have both rebounded from their December lows.

I’m still troubled by Comerica’s relatively weak loan growth, though it looks as though that may accelerate in 2019. Likewise, Comerica’s guidance for mid-single-digit net interest income growth could prove conservative as it includes no further rate hikes. I’d certainly recommend keeping an eye on loan growth, credit quality, and spread leverage here, but even just low single-digit long-term growth should be able to support a fair value more than 10% above today’s level.

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Comerica Has Thawed A Bit, But Expectations Are Still Modest