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Will Comerica Incorporated (CMA) Gain on Rising Earnings Estimates?

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Investors might want to bet on Comerica Incorporated (CMA - Free Report) , as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Comerica Incorporated, as there has been strong agreement among the covering analysts in raising estimates.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The company is expected to earn $2.45 per share for the current quarter, which represents a year-over-year change of +28.95%.

Over the last 30 days, the Zacks Consensus Estimate for Comerica Incorporated has increased 16.77% because six estimates have moved higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $8.27 per share for the full year, which represents a change of -0.96% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, nine estimates have moved up for Comerica Incorporated versus no negative revisions. This has pushed the consensus estimate 10.64% higher.

Favorable Zacks Rank

The promising estimate revisions have helped Comerica Incorporated earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Comerica Incorporated have attracted decent investments and pushed the stock 8.9% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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