CIBC Q1 Earnings Preview: What to Expect

Canadian Imperial Bank of Commerce (TSE: CM) (NYSE: CM), Canada’s fifth-largest bank, will report its Q1 2022 results on February 25 before the opening bell.

Year-to-date, the bank stock has gained approximately 9.5% and is currently trading over C$161.

Analysts Estimates

Analysts are expecting CIBC to report adjusted earnings of C$3.67 per share in the first quarter of 2022, representing a growth of 2.5% from the prior-year quarter (C$3.58 per share).

The estimated revenue is C$5.23 billion, indicating an increase of 5.4% from the first quarter of 2021 (C$4.96 billion).

Factors to Watch

Earnings results for the quarter ended January 31 come as the Canadian bank index is significantly outperforming the TSX and S&P 500. Investors have shifted from growth stocks such as technology to more value-oriented options like banks, which are now trading to the high-end of their historical trading ranges.

However, Scotiabank analyst Meny Grauman believes that bank stocks still have room for growth amid a shift toward value stocks, rising interest rates, and a strong Canadian mortgage market.

The analyst said, “The key risks to our outlook include COVID, as well as the prospect that rate increases trigger a recession, but we view those risks as relatively modest and believe that the positives continue to outweigh the negatives at this stage in the cycle.”

Wall Street’s Take

On February 23, National Bank Financial analyst Gabriel Dechaine kept a Buy rating on CM and raised the price target to C$167 (from C$165). This implies 3.7% upside potential.

The rest of the Street is bullish on CM with a Strong Buy consensus rating based on six Buys and two Holds. The average Canadian Imperial Bank of Commerce price target of C$172.25 implies 7% upside potential to current levels.

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