CIBC Expands Presence in U.S. With Strategic Investment in Loop Capital

Canadian Imperial Bank of Commerce (CM), Canada’s fifth-largest bank, announced Wednesday it has made a minority investment in Loop Capital. The Chicago-based financial services firm has offices in 20 U.S. cities, with more than 175 employees worldwide.

This transaction gives CIBC growth opportunities in U.S. capital markets. Financial terms of the transaction weren’t revealed.

Harry Culham, Senior Executive Vice-President and Group Head, Capital Markets, CIBC said, “We are excited to partner with Loop Capital to further expand in key client segments and markets in the U.S. With the combination of Loop Capital’s deep client relationships in the U.S. and the strength of our resources and capabilities, we see this as a mutually beneficial transaction which enables us to accelerate the growth of our North American platform, while collaborating to deliver a full suite of financial services solutions to clients.”

CIBC has expanded in the United States since the acquisition of The PrivateBank in 2017, followed by acquisitions of Geneva Advisors in the same year and Cleary Gull and Lowenhaupt Global Advisor in 2019. (See Canadian Imperial Bank of Commerce stock chart on TipRanks)

Last week, National Bank analyst Gabriel Dechaine maintained a Buy rating on the stock and raised its price target to C$159.00 (from C$156.00). This implies 8.7% upside potential.

Dechaine said during an earnings call that as CIBC has businesses dealing with higher input costs on the commercial side, it’s increasing risk.

Overall, consensus among Wall Street analysts is that CM is a Strong Buy based on 8 Buys and 1 Hold. The average Canadian Imperial Bank of Commerce analyst price target of C$154.67 implies 5.8% upside potential to current levels.

TipRanks’ Smart Score

CIBC scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock’s returns are likely to beat the overall market.