UPDATE: BMO Capital Markets Upgrades CIBC to Outperform, Raises PT

In a report published Friday, BMO Capital Markets upgraded its rating on CIBC

from Market Perform to Outperform, and raised its price target from $76.50 to $84.00. BMO Capital noted, “We upgraded the shares of CIBC based on the following considerations: clearer statement on use of capital (dividends and buybacks as well as modest sized acquisitions), positive results (albeit early) from the shift in retail banking strategy, predictable (but modest) EPS growth based on reduced preferred share dividends and lower common shares outstanding, and valuation...We increased the target price to $84.00 from $76.50, reflecting higher cash operating EPS in 2013 and a narrowing of the discount valuation. We continue to believe that CM shares will trade at a discount given lower net income growth prospects but that concerns on capital reallocation may abate. The target price translates into a target yield of 4.5% on CIBC's current dividend. We do believe that CIBC could increase the dividend 4-5% per year.” CIBC closed on Thursday at $75.35.