On Sep 13, 2013, we reaffirmed our Neutral recommendation on
). This was based on the company's positive second-quarter 2013
earnings. However, we remain concerned about the unsettled
economic environment, regulatory overhangs and persistent
pressure on net interest margin.
BANKUNITED INC (BKU): Free Stock Analysis
COMERICA INC (CMA): Free Stock Analysis
FIRSTBANK ALMA (FBMI): Free Stock Analysis
FIRST INTST MT (FIBK): Free Stock Analysis
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On Jul 16, Comerica reported second-quarter 2013 earnings per
share of 76 cents, beating the Zacks Consensus Estimate by 6
cents. The company's results reflect increased non-interest
income and lower expenses. Further, growth in average loans and
deposits as well as improved credit metrics were the positives.
However, a marginal decline in net interest income was the
The Zacks Consensus Estimate for 2013 remained stable at $2.89
per share over the last 60 days. However, for 2014, the Zacks
Consensus Estimate declined 1.0% to $2.91 per share over the same
time period. Comerica currently carries a Zacks Rank #3 (Hold).
Comerica is a sound asset for yield-seeking investors. In the
first half of 2013, share repurchases, combined with dividends,
resulted in a total payout of about 76% of net-income to
shareholders. Further, we expect the company's expense saving
initiatives and improvement in credit metrics to aid in
countering the tepid economic recovery. Moreover, Comerica's
acquisitions will benefit revenue growth going forward.
However, Comerica's top-line growth is expected to be sluggish in
the coming quarters due to severe pressure on NIM. We expect NIM
to remain compressed on the assumption of an unchanged yield
curve and prepayment fees.
Moreover, lower non-interest income is a major concern for
Comerica. Though we expect the fee-based category to improve with
economic recovery, this will likely be challenging due to the
prevailing sluggish economy. Alongside, the company's significant
concentration in the California and Michigan regions, which were
hard hit by the recession, is a cause of concern.
Other Stocks to Consider
Some better-performing banks include
First Interstate Bancsystem Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).