It’s been a great day to be a Canadian bank, especially if you’re bringing out earnings. Joining the trend is Canadian Bank of Commerce (TSE:CM) (NYSE:CM), often called CIBC. No matter what you call it, you can only call its earnings report a winner. And investors agreed in grand style, sending CIBC shares surging up nearly 5% in Thursday afternoon’s trading.
Much of CIBC’s results were good news. Earnings came in at C$1.79 per share, which was not only up from last year’s figures—up 4%, in fact—but also readily trounced analyst expectations, which looked for CIBC to pull in only C$1.65 per share. Revenue, meanwhile, did even better, coming in at C$6.16 billion for the quarter. That’s well over the analyst expectation of just C$6.06 billion and a nice 8% jump up from the previous year.
While its net income from Canadian operations was up slightly, it was fantastically improved in the U.S. CIBC saw a growth of 70% just from the U.S. operations. Even the capital markets division showed gains, up 13% against this time last year.
A Push in Leverage
And all this comes on the heels of an earlier report that features CIBC poaching a veteran from Barclays to augment that capital markets operation. CIBC picked up Brad Aston, who will operate out of New York and serve as managing director and global head of leveraged finance in capital markets. The capital markets part of CIBC has been on the rise. In fact, over the last five years, CIBC has doubled revenue from U.S. capital markets, and that makes this a particularly vital part of CIBC’s operation that needs a solid manager.
Is CIBC Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CM stock based on five Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 28.68% rally in its share price over the past year, the average CM price target of C$71.77 per share implies 5.49% upside potential.
