Comerica entered priority list-City Analytics
2023.03.10 11:56
Comerica entered priority list-City Analytics
By Kristina Sobol
Budrigannews.com – Citi analysts have assigned Comerica Inc. (NYSE:) on its focus list, arguing that despite the banking sector’s recent stock decline, the Dallas-based lender’s valuation presents a “compelling opportunity.”
Due to its potential to benefit from higher short-term interest rates and improved commercial loan growth, Citi analysts ranked Comerica as one of the “best regional bank plays” in a note to clients.
They added that it is an “attractive time” to purchase shares in Comerica at its implied cost of equity of 12%, which is a measure of the compensation that investors demand from the bank.
According to the Citi analysts, “We have found over time that the stocks trade between 9.5-10.5% during the middle of the cycle, which then increases to 10.5-12% during the late cycle and exceeds 12% in bear markets.”
The remarks come as startups-focused SVB Financial Group (NASDAQ:) has put pressure on banking stocks this week. commenced a $1.75 billion share sale in an effort to strengthen its financial position.
According to Citi analysts, lenders’ primary concerns relate to funding constraints, while credit risk concerns “lurk in the background.” “Investors should start looking to add to positions here as risk/reward looks very attractive,” they said, referring to the “recent pull back.”
Comerica’s stock plunged on Friday, extending the decline.
More:
Boeing opens a company in India
Tesla cooperates with Asian companies to solve problems with batteries
Credit Suisse shares fall due to refusal to publish report and problems with SEC
