UPDATE: ISI Group Initiates Coverage on Comerica on Positive Outlook

In a report published Tuesday, ISI Group analyst Keith Murray initiated coverage on

with a Buy rating and $45.00 price target. In the report, ISI Group noted, “We are initiating coverage of Comerica with a Buy rating and 12-month price target of $45. We estimate that Comerica is the second most rate sensitive regional bank we cover (ZION is first) and while the Fed could be on hold until the middle of 2015 we think CMA is a relatively cheap rate hedge at 1.2x tangible book value. In the mean time, management continues to return sizable amounts of capital (79% combined payout ratio in 2012) and the share count continues to shrink (we estimate a 3% reduction in 2013) so potential EPS in a better rate backdrop is building. Given what we think are some support levers for the stock (potential seller given CEO's age and geographic footprint, low P/TBV multiple) and the slowly improving macro backdrop, we think it makes sense to have some rate exposure and CMA is our choice.” Comerica closed on Monday at $38.76.