.Friday, July 22, 2024 10:30 AM

Comerica (NYSE:CMA) shares dropped over 1% pre-market as Baird analysts lowered their price target to $65 from $68, while maintaining an Outperform rating. Q2 earnings per share (EPS) came in at $1.49, beating the consensus estimate of $1.19. Core revenue and expenses both decreased sequentially by around 5% and 1%, respectively. Despite strong credit trends, ongoing deposit pressures and weaker loan demand may lead to slight downside according to guidance.

The loss of the Federal Direct Express business caused Comerica’s stock to plummet over 10%. This change is expected to result in the loss of $3.3 billion in non-interest-bearing deposits in the first half of 2025, potentially impacting EPS by $0.50. Despite this setback, analysts believe Comerica will recover its deposit base and benefit from the runoff of swaps and securities, maintaining a positive long-term return profile. Investors are encouraged to take advantage of the current weakness and add to their positions.