Comerica (NYSE:CMA) shares fell more than 1% after BofA Securities analysts downgraded to Underperform from Neutral, setting a new price target of $52, down from $55. The analysts highlighted that Comerica’s stock is now trading above its historical range and does not reflect potential downward risks, especially with expected interest rate cuts.
The analysts noted that anticipated rate reductions of 200 basis points could counteract gains from swaps, reinvestment of low-yield securities, the transition away from BSBY, and adjustments in deposit pricing. Among mid-cap banks, the analysts see Comerica facing one of the most substantial risks to its 2025 net interest income (NII) projections.
Additionally, the analysts cited potential issues arising from the faster transition of the Direct Express program, which hasn’t been fully accounted for in current estimates.