Comerica (CMA) isn't the cheapest-looking bank I follow, but it may well be seriously in the running for least-liked, as analysts have continued to fret about this bank's exceptional rate sensitivity (a liability with rates near zero) and elevated credit risk. The shares have outperformed a bit lately, though, as investors seem more willing to bet on eventual recovery stories. With Comerica's third quarter results pointing toward some signs of stability in spreads and credit, more of that valuation gap could shrink.
Comerica is undervalued, but there are a lot of banks I can say that about, and many of have better near-term outlooks, better long-term growth stories, stronger fundamentals, or some combination of the three. I would expect Comerica to do a little better than the average bank, but unless there's a catalyst for a steeper rate curve sooner than everyone expects, I can't see why I should pick this name over a host of undervalued alternatives.
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