Canadian Imperial Bank of Commerce CM is scheduled to report fiscal fourth-quarter 2024 results (ending Oct. 31) on Dec. 5 before the opening bell. The company’s quarterly earnings and revenues are expected to have improved on a year-over-year basis.
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Its last reported-quarter results benefited from an improvement in revenues and lower provisions. Also, loans and deposit balances increased in the quarter. However, higher expenses were an undermining factor.
CM has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average beat being 6.65%.
Canadian Imperial Bank of Commerce Price and EPS Surprise
Canadian Imperial Bank of Commerce price-eps-surprise | Canadian Imperial Bank of Commerce Quote
Key Factors to Affect CM's Q4 Results
Net Interest Income: The Bank of Canada has continued to ease monetary policy since June this year. CM has since cut interest rates four times, including a 50-basis-point reduction in October, bringing the policy rate from its peak of 5% at the beginning of the year to 3.75%.
While the rate cut is not expected to have significantly affected CM’s net interest income (NII) in the quarter under review, greater clarity on the rate cut path and stabilizing macroeconomic scenario are likely to have aided the lending outlook. This is likely to have aided CM’s top line to some extent in the fiscal fourth quarter.
Non-Interest Income: Amid the falling rate environment and equity markets trading at or near all-time highs, the landscape for both debt and equity financing activity remains positive. Global mergers and acquisitions in the quarter under review also showed signs of improvement. Further, green shoots were observed in the capital markets. This is likely to have supported Canadian Imperial trading revenues. Thus, investment banking fees are likely to have improved in the quarter to be reported.
Further, with an improved lending scenario, CM’s credit fee is likely to have witnessed an increase in the quarter to be reported. Also, increased consumer spending is expected to have supported the company’s card fees. Thus, CM’s transactional fees are expected to have improved in the fiscal fourth quarter.
Rise in Expenses: Canadian Imperial has been facing a rise in expenses in the past several quarters. The same trend is likely to have persisted in the to-be-reported quarter as the company continues to invest in its business.
CM’s Earnings & Sales Estimates for Q4
The Zacks Consensus Estimate for CM’s fiscal fourth-quarter earnings is pegged at $1.26 per share, unchanged in the past seven days. The estimate indicates an 8.6% rise from the year-ago quarter’s reported number.
The consensus estimate for sales is pegged at $4.67 billion, indicating an increase of 8.5% on a year-over-year basis.
Earnings Whispers for CM
Our quantitative model does not conclusively predict an earnings beat for CM this time. This is because it does not have the right combination of the two key ingredients—a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: CM presently has an Earnings ESP of -0.26%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Foreign Bank Stocks Worth Considering
Some better-ranked bank stocks are NatWest Group plc NWG and Grupo Financiero Galicia S.A. GGAL, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NWG’s earnings has been revised 3.3% upward for 2024 in the past month. Shares of NWG have gained 29.8% in the past six months.
The earnings estimates for GGAL have been revised 8.4% upward for 2024 in the past month. In the past six months, GGAL shares have surged 88.2%.
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