Argus cuts Comerica to Hold on valuation, potential Fed rate cut delays

Argus analyst Kevin Heal downgraded Comerica to Hold from Buy. Many regional bank stocks have run up recently on the expectations that interest rate would be cut in early 2024, which would lower deposit costs and improve losses in the investment portfolio, but the recent economic data has suggested that the Fed may wait longer to make rate cuts, the analyst tells investors in a research note. Comerica stands to benefit from high short-term interest rates on floating-rate loans and continued strong credit quality in its loan book, though these could also be offset by higher funding costs and lower noninterest rate deposits, the firm added.