Good news from the Canadian banking sector, as the stock of Canadian Imperial Bank of Commerce (TSE:CM) is rising after the lender posted its latest financial results. Shares were up nearly 5% as investors took stock of the bank’s print.
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CIBC, as the bank is commonly known, posted its Fiscal fourth quarter earnings, and delivered quite a bit of good news. Its profit came in at $1.88 billion, which was up substantially from the $1.49 billion posted a year earlier. Earnings per share (EPS) were also up nicely, going from $1.53 per share last year to $1.90.
Revenue was also up nicely, rising from $5.85 billion last year to $6.62 billion in this year’s Fiscal fourth quarter. CIBC even managed to lower its provision for credit losses, dropping them to $419 million. Personal and banking business brought in $743 million against last year’s $637 million, and commercial banking and wealth management surged from $490 million to $516 million.
Dividend Boost
Along with its financial results, CIBC also hiked its dividend. Previously, CIBC’s quarterly dividend came in at $0.90 per share. Now it stands at $0.97 per share. The reason for the hiked dividend starts with the gains seen in so many of CIBC’s operational sectors, as the previously-mentioned numbers indicate.
But more than that, CIBC saw improvements in credit quality, as well as signs of improvement in the commercial real estate sector, which had long been viewed as a drag on the banking industry. And though the economic outlook is looking worse, CIBC was actually seeing improvements in several areas.
Is CIBC Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:CM stock based on four Buys, three Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 71.15% rally in its share price over the past year, the average TSE:CM price target of C$91.27 per share implies 2.10% downside risk.
