What a fantastic six months it’s been for Comerica. Shares of the company have skyrocketed 51.4%, hitting $87.75. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move.

Is there a buying opportunity in Comerica, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free for active Edge members.

Why Do We Think Comerica Will Underperform?

We’re glad investors have benefited from the price increase, but we're swiping left on Comerica for now. Here are three reasons we avoid CMA and a stock we'd rather own.

1. Net Interest Income Points to Soft Demand

Net interest income commands greater market attention due to its reliability and consistency, whereas one-time fees are often seen as lower-quality revenue that lacks the same dependable characteristics.

Comerica’s net interest income has grown at a 3% annualized rate over the last five years, much worse than the broader banking industry and in line with its total revenue. Its growth was driven by both an increase in its outstanding loans and net interest margin, which represents how much a bank earns in relation to its outstanding loan book.

2. EPS Barely Growing

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Comerica’s EPS grew at an unimpressive 7.6% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 2% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.

3. Growing TBVPS Reflects Strong Asset Base

Tangible book value per share (TBVPS) serves as a key indicator of a bank’s financial strength, representing the hard assets available to shareholders after removing intangible assets that could evaporate during financial distress.

Although Comerica’s TBVPS was flat over the last five years. the good news is that its growth has recently accelerated as TBVPS grew at an incredible 29.6% annual clip over the past two years (from $29.86 to $50.14 per share).

Final Judgment

We see the value of companies driving economic growth, but in the case of Comerica, we’re out. Following the recent rally, the stock trades at 1.5× forward P/B (or $87.75 per share). This multiple tells us a lot of good news is priced in - we think other companies feature superior fundamentals at the moment. We’d suggest looking at the Amazon and PayPal of Latin America.

Stocks We Would Buy Instead of Comerica

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The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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