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Why Comerica (CMA) Stock is Worth Betting on Right Now
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Comerica Incorporated’s (CMA - Free Report) shares have gained 64.3% year to date, significantly outperforming the 19.5% growth for the Zacks categorized Major Regional Banks industry. This momentum is likely to continue based on its underlying strength in fundamentals.
This is clearly reflected in the latest estimate revision trend for its earnings. The company has seen its earnings estimate for the current year revising 9.6% upward over the past 90 days. This is the reason it carries a Zacks Rank #1 (Strong Buy).
Looking at the fundamentals, cost containment is a key strength at Comerica. Expenses have declined at a four-year (2011-2014) CAGR of 2.8%. Moreover, it’s Growth in Efficiency and Revenue Initiative (GEAR Up) is expected to result in annual pre-tax income of $180 million in 2017 and of about $270 million by the end of 2018.
Also, following the recent Fed rate hike, the company raised its prime lending rate to 3.75%. In fact, an improving loan portfolio is likely to offset some of the margin pressure. As the economy recovers gradually, loan growth is expected to continue in the near term.
Further, its GEAR Up initiative is anticipated to bolster revenues to about $30 million for 2017 and approximately $70 million for 2018, through expanded product offerings, enhanced sales tools and training and improved customer analytics.
Comerica also keeps on benefiting for a strong capital position. Notably, it won regulatory approval for its 2016 capital plan.
Though several regulatory issues and a probability of higher energy-related provisions may pose risks, Comerica’s continuous geographic diversification beyond its traditional and slow-growth Midwest markets are expected to offset the negative impact.
Other Stocks to Consider
Some other favorably ranked stocks in the same space include KeyCorp (KEY - Free Report) , Citigroup Inc. (C - Free Report) and The Bank of New York Mellon Corporation (BK - Free Report) .
KeyCorp has witnessed an upward earnings estimate revision of 6.7% for the current year, over the past 60 days. Its share price has risen more than 39% year to date. It currently boasts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Citigroup carries a Zacks Rank #2 (Buy). For the current year, over the past 60 days, its Zacks Consensus Estimate has been revised 1.1% upward. Its share price has increased 17.5% year to date.
BNY Mellon also carries a Zacks Rank #2. It has witnessed an upward earnings estimate revision of 2.6% for the current year, over the past 60 days. Its share price is up 15.7% year to date.
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Why Comerica (CMA) Stock is Worth Betting on Right Now
Comerica Incorporated’s (CMA - Free Report) shares have gained 64.3% year to date, significantly outperforming the 19.5% growth for the Zacks categorized Major Regional Banks industry. This momentum is likely to continue based on its underlying strength in fundamentals.
This is clearly reflected in the latest estimate revision trend for its earnings. The company has seen its earnings estimate for the current year revising 9.6% upward over the past 90 days. This is the reason it carries a Zacks Rank #1 (Strong Buy).
Looking at the fundamentals, cost containment is a key strength at Comerica. Expenses have declined at a four-year (2011-2014) CAGR of 2.8%. Moreover, it’s Growth in Efficiency and Revenue Initiative (GEAR Up) is expected to result in annual pre-tax income of $180 million in 2017 and of about $270 million by the end of 2018.
Also, following the recent Fed rate hike, the company raised its prime lending rate to 3.75%. In fact, an improving loan portfolio is likely to offset some of the margin pressure. As the economy recovers gradually, loan growth is expected to continue in the near term.
Further, its GEAR Up initiative is anticipated to bolster revenues to about $30 million for 2017 and approximately $70 million for 2018, through expanded product offerings, enhanced sales tools and training and improved customer analytics.
Comerica also keeps on benefiting for a strong capital position. Notably, it won regulatory approval for its 2016 capital plan.
Though several regulatory issues and a probability of higher energy-related provisions may pose risks, Comerica’s continuous geographic diversification beyond its traditional and slow-growth Midwest markets are expected to offset the negative impact.
Other Stocks to Consider
Some other favorably ranked stocks in the same space include KeyCorp (KEY - Free Report) , Citigroup Inc. (C - Free Report) and The Bank of New York Mellon Corporation (BK - Free Report) .
KeyCorp has witnessed an upward earnings estimate revision of 6.7% for the current year, over the past 60 days. Its share price has risen more than 39% year to date. It currently boasts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Citigroup carries a Zacks Rank #2 (Buy). For the current year, over the past 60 days, its Zacks Consensus Estimate has been revised 1.1% upward. Its share price has increased 17.5% year to date.
BNY Mellon also carries a Zacks Rank #2. It has witnessed an upward earnings estimate revision of 2.6% for the current year, over the past 60 days. Its share price is up 15.7% year to date.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>.