Comerica Q3 Earnings: Is NYSE:CMA Cheap at 0.8x Price/Book?

in EARNINGS/INVESTING IDEAS by

Comerica Incorporated (NYSE:CMA) is scheduled to report Q3 earnings results on October 20, 2020.

The company is expected to report earnings of $0.84/share on revenue of $697.4 million. The consensus earnings per share (EPS) of $0.84/share is based on a poll of 19 analysts and represents a decline in eps of −56.2% over the same quarter last year, when the company reported earnings of $1.93/share.

The revenue forecast of $697.4 million based on a poll of 17 analysts implies a year-over-year (YoY) decline in revenue of −17.2%. Last year the company reported $842 million in revenue for the quarter.

Expected to report EPS contraction of −56.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $697.43 $842.00 −17.2%
EPS $0.84 $1.93 −56.2%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from Comerica Incorporated for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.22 $0.80 257.8% Beat
Q1, 2020 $0.85 -$0.46 −153.9% Missed
Q4, 2019 $1.75 $1.85 5.8% Beat
Q3, 2019 $1.90 $1.93 1.5% Beat
Q2, 2019 $2 $1.94 −3.2% Missed
Q1, 2019 $1.93 $2.08 7.7% Beat
Q4, 2018 $1.89 $1.95 3.1% Beat
Q3, 2018 $1.78 $1.86 4.6% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 5.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 21, 2020 $34.93 $36.66 5.0% Increase
April 21, 2020 $29.62 $30.45 2.8% Increase
January 21, 2020 $68.72 $66.40 −3.4% Decline
October 16, 2019 $67 $64.59 −3.6% Decline

Fundamentals And Technical Analysis

Comerica Incorporated is currently trading at $41.68/share, down 0.0% for the day. The company is trading at approximately 57.1% of its 52-week high of $73.43/share. The company’s stock price is up 13.7% since the last earnings report and down −2.6% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 52.53 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:CMA Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 9.63 and a forward P/E multiple of 20.29.

Comerica Incorporated’s current share price also implies a price-to-book (P/B) multiple of 0.79. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $41.68
P/E Ratio 9.6x
P/E Ratio (Fwd) 20.3x
PEG Ratio −0.2
Total Debt / Total Capital 55.0%
Levered Free Cash Flow $1.323 billion
Price To Sales 2.3x

Finbox

Comerica Incorporated is a mid-cap stock with a market capitalization of $5.797 billion. The company operates in the Financials sector and the Banks industry.

Comerica Incorporated, through its subsidiaries, provides various financial products and services. It operates through three segments: Business Bank, Retail Bank, and Wealth Management. The Business Bank segment offers various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services, and loan syndication services for small and middle market businesses, multinational corporations, and governmental entities. The Retail Bank segment provides personal financial services, such as consumer lending, consumer deposit gathering, and mortgage loan origination. It also offers various consumer products that include deposit accounts, installment loans, credit cards, student loans, home equity lines of credit, and residential mortgage loans. The Wealth Management segment provides products and services comprising fiduciary, private banking, retirement, investment management and advisory, and investment banking and brokerage services. It also sells annuity products; and life, disability, and long-term care insurance products. The Finance segment engages in the securities portfolio, and asset and liability management activities. It operates in Texas, California, Michigan, Arizona and Florida, as well as in Canada and Mexico. The company was formerly known as DETROITBANK Corporation and changed its name to Comerica Incorporated in July 1982. Comerica Incorporated was founded in 1849 and is headquartered in Dallas, Texas.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.