- Comerica beat sell-side expectations for fourth quarter earnings, but the beat was driven largely by credit costs, with core pre-provision profits only a little better than expected.
- Credit is still under some stress, particularly in the energy portfolio, but the credit evolution has been more positive than expected, and Comerica looks adequately reserved.
- Management is guardedly optimistic on improving loan demand as 2021 rolls on, but competition in middle-market lending is getting fiercer; Fed rate hikes are the real catalyst.
- Comerica offers decent return prospects today relative to other bank stocks, and potentially more if rate hikes come sooner, but there are better prospects.
For further details see:
Comerica Seeing Better Credit Trends, But Higher Rates Remain Key