At $78, Comerica’s Stock Is Quite Expensive

At $78, Comerica’s Stock Is Quite Expensive

Share to Linkedin After a 180% rally since the March 23 lows of the last year, at the current price of $78 per share, we believe Comerica Incorporated Stock (NYSE: CMA) is expensive. Comerica, the largest U. S. commercial bank, has seen its stock rally from $27 to $78 off the March 2020 bottom compared to the S&P which moved around 90% - the stock is leading the broader markets by a considerable margin and is trading 22% above its pre-Covid-19 peak. That said, there is a mismatch between CMA stock's growth and revenues. The bank has posted lower revenues over the recent quarters on a year-on-year basis - the top line has fallen 12% y-o-y to a consolidated figure of $2. 88 billion for the last four quarters. Despite this, CMA stock has gained 116% over the last twelve months. This could be partially attributed to an earnings beat in each of the last four quarters and partially to an overall positive outlook toward the financial stocks - CMA stock has gained 41% YTD. Comerica's stock has surpassed the level it was at before the drop in February 2020 due to the coronavirus outbreak becoming a pandemic. This seems