CIBC Q1 Profit Rises 15%, Smashes Estimates

Canadian Imperial Bank of Commerce (TSE: CM) (NYSE: CM) 2022 first-quarter results beat expectations by a wide margin. All of the bank’s major divisions posted year-over-year gains.

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Revenue & Earnings

Total revenue was C$5.50 billion in Q1 2022, 10.9% higher than in Q4 2020 (C$4.96 billion), and beating estimates of C$5.23 billion.

Profit came in at C$1.87 billion (C$4.03 per diluted share) in the first quarter of 2022, up 15% from C$1.63 billion (C$3.55 per diluted share), in the same quarter a year ago.

CIBC earned C$4.08 per diluted share on an adjusted basis, an increase of 14% from the prior-year quarter. Adjusted profit beat the consensus estimate of C$3.67 per share.

Credit quality remained stable as the bank set aside C$75 million for loans that could go bad, compared to C$78 million in provisions in the prior quarter.

The bank’s Common Equity Tier 1 ratio stood at 12.2% in the quarter, compared to 12.3% a year ago.

In February, CIBC’s board of directors approved a two-for-one stock split plan. This plan is subject to shareholder approval at a meeting in April.

CEO Commentary

CIBC president and CEO Victor G. Dodig said, “In the first quarter, the continued execution of our strategy and ongoing investments in our bank enabled us to deliver strong financial results. Our highly connected and engaged team is guided by our purpose of helping make our clients’ ambitions a reality each and every day, which is attracting new business to our bank, deepening existing relationships, and driving strong top line growth across all of our businesses. To support our clear momentum and long-term growth, we continue to invest in our technology and talent to create a modern and exceptional experience for our clients and team, and we’re activating our resources to create positive change for our stakeholders as we contribute to a more sustainable, inclusive future.”

Wall Street’s Take

Following the results, Canaccord Genuity analyst Scott Chan kept a Buy rating on CM with a C$173 price target. This implies 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 6.6% upside potential to current levels.

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