Stephens Upgrades Comerica After YTD Pullback

Comerica Incorporated’s (NYSE: CMA) stock has performed the worst among super regional banks year to date, declining around 26% versus the downturn of about 11% in the SPDR S&P Regional Banking ETF (NYSE: KRE), according to Stephens.

The Comerica Analyst: Terry McEvoy upgraded Comerica from Equal-Weight to Overweight, while raising the price target from $46 to $62.

The Comerica Analyst: The company’s earnings were more severely hit by the Federal Reserve’s decision to cut interest rates to zero, McEvoy said.

When the market begins to price in the Fed’s change in direction in interest rates, Comerica should be the “largest beneficiary across other Super Regional banks given that the balance sheet remains very asset sensitive,” he said.

“Increased M&A activity among larger banks should benefit CMA,” the analyst wrote in the note.

A recovery in commercial loan growth should meaningfully boost Comerica's growth profile, “given that commercial loans represent nearly 60% of the total book,” he added.

CMA Price Action: Shares of Comerica were trading almost flat at $53.00 at the time of publication Thursday.