UPDATE: Nomura Initiates Coverage on Comerica with Neutral Rating, $35 PT on Limited Potential Upside

In a report published Wednesday, Nomura initiated coverage on Comerica

with a Neutral rating and $35.00 price target. Nomura noted, “Initiating coverage with Neutral rating. CMA is the most rate-sensitive bank in our regional bank universe, as 85% of its loans are floating rate (75% of which are priced off LIBOR). We are not expecting the Fed to increase its Fed Funds target through at least the end of 2014; therefore, we think NIM pressure remains. To its credit, CMA management is returning capital to shareholders and cutting costs, and the bank generated decent loan growth in 4Q12, although some of this may have been a pull-forward of 1Q13 loan demand due to concerns around the fiscal cliff. CMA posted 7% C&I loan growth in 4Q12 vs. the peer median of 4%. Unfortunately, management expects the pace of loan growth to slow in 2013, given the still-sluggish recovery. Given our outlook for continued rate pressure and slowing loan growth, we see limited upside in the next 12 months and see better value elsewhere.” Comerica closed on Tuesday at $34.83.