Wells Fargo Initiates Comerica At Outperform

Wells Fargo has published a research report and has initiated coverage on Comerica Inc. CMA with an Outperform rating. In the report, Wells Fargo writes "We are initiating coverage of CMA with an Outperform rating and a 12-month valuation range of $49-52--implying 20-27% potential upside from CMA's current price. CMA's above-average loan growth, superior capital flexibility, and below-peer valuation are the primary drivers of our rating. Our 2011 and 2012 EPS estimates are $1.80 and $2.95, respectively. Comparatively, consensus stands at $1.77 for 2011 and $2.89 for 2012. CMA's traditional focus on commercial and industrial (C&I) lending should drive superior loan growth in 2011 relative to more consumer-oriented LCRBs, in our view. We estimate CMA's 2011 average loan growth at 2.1% versus a peer group average of -0.8%, led by improving economic conditions (and export activity) in Texas, California, and Michigan. CMA is also the most positioned to benefit from higher interest rates, which we expect by mid/late 2011. As a result, we expect CMA's EPS growth to prove superior to its peer group in 2011 12." Comerica Inc. closed yesterday at $40.24.