D.A. Davidson Cuts Price Target On Comerica

D.A. Davidson cut its price target on Comerica Incorporated CMA Friday from $48 to $44 and maintained a Neutral rating after the company reported Q4 earnings.

“CMA reported GAAP EPS of $0.80, $0.01 ahead of our estimate and above the Street estimate of $0.76. Excluding real estate optimization costs of $4 million Core EPS was $0.01 above our $0.80 estimate. Pretax income of $220 million was in line with a $2 million revenue beat (net of NII and fees) offset by higher operating expenses and lower provision,” according to analyst Gary P. Tenner.

Tenner added that the “company is confident that it can weather this energy cycle effectively, citing its 30-year experience in energy lending and noting that, at 15 percent of Texas GDP, the sector is less directly impactful to the economy than in past cycles. Borrowing base recalculations will be important during the first and second quarters and could result in some mid-year and second-half decline in E&P balances.”

The firm’s $44 price target “values CMA at 14x estimated 2015 EPS of $3.13, slightly above the 13.5x average of other institutions in the $40-$100 billion asset range. While CMA remains a long term interest rate play, energy uncertainty and a flat EPS outlook for 2015 warrants” a Neutral rating according to the analyst note.

Comerica recently traded at $41, up 0.1 percent.