Bank stock Comerica (NYSE:CMA) took a bit of a hit in Wednesday’s trading but mostly recovered going into the later part of the day. A new report about regulators investigating the stock proved to be tough for investors to digest, but things did improve, and now, Comerica is up fractionally in the closing minutes of Wednesday’s session.
The reports noted that regulators were looking into Comerica after some issues with a technology update. The update, as it turned out, did something deeply unpleasant in the bank’s wealth management operations, and millions of dollars turned up missing as a result. Agents with the Office of the Comptroller of the Currency started the investigation and discovered a series of significant errors in trust client transactions. In this case, a trust client would withdraw money from a bank branch, and then Comerica gets reimbursed by the trust manager. However, with the update—which took place months ago—the reimbursements didn’t arrive as required, which left Comerica holding the bag.
Expansion Through Adversity
Give Comerica credit, though; even with these disastrous technology issues, Comerica is still working to expand. Rises in loan growth—partly due to rising interest rates—have helped its ability to generate income, with the average loan balance expected to grow 7% over the course of 2023. And there are also plans for new branches, even though some reports suggest that’s not going well in every case. For instance, a new branch planned for Raleigh, North Carolina, hasn’t quite appeared yet, though it’s still said to be in progress.
What is the Target Price for Comerica?
Turning to Wall Street, analysts have a Strong Buy consensus rating on CMA stock based on 10 Buys, six Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 22.27% loss in its share price over the past year, the average CMA price target of $49 per share implies 2.75% upside potential.
