Sterne Agee Upgrades Comerica To Buy

According to Sterne Agee, Comerica CMA shares are upgraded to Buy. Sterne Agee reported that it is upgrading the shares of CMA to Buy from Neutral with a $45 PT based on 1.5x pro-forma TBVPS, equating to 11x its normalized earnings estimate of ~$4.00. “Our DCF analysis suggests a present value of $42. We view CMA as being valued like a super-regional on normalized or FY13 earnings prospects and cheaper on pro-forma TBVPS post the SBIB transaction. The shares are less expensive than regional franchises on most metrics. However, compared to either group we view CMA as possessing more capital to deploy, with better longer-term growth prospects, and less near-term regulatory risk to its business model. CMA is also positioned well for eventual higher interest rates, noting only 8% of the loan portfolio has floors (yield on the loan portfolio of 3.92% last quarter).” Comerica closed on Friday at $36.95.