Comerica’s Updated Investor Deck Review

RBC Capital analysts provided their views on Comerica Incorporated (NYSE:CMA) following the company’s updated investor deck ahead of a management presentation at an upcoming conference. Key updates included a stronger net interest income outlook, solid quarter-to-date average loan growth, and declining deposit balances.

Management provided an updated net interest income outlook which now calls for a greater than 25% sequential increase in Q3/22 (previously a 21% increase) and a greater than 32% increase for the full 2022-year net interest income (previously a 31% increase).

Management had previously signaled an upside to their near-term outlook from additional rate increases. In recent weeks, the short end of the curve has continued to move higher, reflecting an anticipated 75 bps rate increase in September and an ongoing aggressive stance by the Fed. Such an environment is very beneficial to Comerica given its highly asset-sensitive balance sheet. Management also disclosed the company has added $5.6 billion in interest rate swaps since the end of Q2/22.

The analysts updated their estimates to align with management’s updated outlook. RBC Capital’s 2022 EPS estimate moves from $8.40 to $8.60 and its 2023 estimate moves from $10.50 to $10.75.