Canadian Bank of Commerce (CM) AI Stock Analysis

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Canadian Bank of Commerce

(TSX:CM)

75Outperform

The overall stock score of 75 reflects CIBC's robust financial performance, with significant revenue growth and profitability. The technical analysis indicates bearish market sentiment, but the valuation suggests the stock may be undervalued. The earnings call was positive, highlighting strong growth and strategic initiatives, but also acknowledged challenges such as economic uncertainties and increased credit loss provisions.

Positive Factors

Capital Markets

The optimistic outlook for the Capital Markets segment includes a promising deal pipeline, suggesting continued strong performance.

Earnings

Operating EPS beat consensus expectations by approximately 10% to 12%, driven by record trading in Capital Markets and better revenue across other segments.

Share Buybacks

Strong capital levels support continued share buybacks, with a CET1 ratio of 13.5%.

Negative Factors

Loan Growth

Loan growth muted on the consumer side offset by strength in commercial.

Tariff Uncertainty

The target price for the stock was slightly lowered due to tariff uncertainty, despite consistent execution and delivery at the bank.

Canadian Bank of Commerce (CM) vs. S&P 500 (SPY)

Market Cap

$75.85B

Dividend Yield4.67%

Average Volume (3M)5.41M

Price to Earnings (P/E)10.4

Beta (1Y)0.85

Revenue Growth10.79%

EPS Growth18.20%

CountryCA

Employees48,698

SectorFinancial

Sector Strength79

IndustryBanks - Diversified

Share Statistics

EPS (TTM)7.73

Shares Outstanding940,047,550

10 Day Avg. Volume5,598,144

30 Day Avg. Volume5,412,076

Financial Highlights & Ratios

PEG Ratio0.57

Price to Book (P/B)N/A

Price to Sales (P/S)2.90

Price to Cash Flow (P/CF)-24.50

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$97.19

Price Target Upside23.20% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering10

Canadian Bank of Commerce Business Overview & Revenue Model

Company DescriptionThe Canadian Imperial Bank of Commerce (CIBC), operating under the ticker symbol CM on the Toronto Stock Exchange, is one of Canada's largest banks. It provides a comprehensive range of financial products and services, including personal, business, and commercial banking, wealth management, and capital markets services. CIBC operates predominantly in Canada and has a presence in the United States and several other countries, catering to both individual and institutional clients.

How the Company Makes MoneyCIBC makes money through various revenue streams, primarily driven by its core banking operations. The bank earns interest income from loans and mortgages extended to individuals and businesses, as well as from investments in securities. Additionally, CIBC generates significant fee-based income through services such as wealth management, insurance products, and transaction fees. The capital markets division contributes to earnings through underwriting, advisory services, and trading activities. Partnerships with fintech companies and other financial institutions further enhance its product offerings and customer reach, while cost management strategies and technological investments help optimize operational efficiency and profitability.

Canadian Bank of Commerce Financial Statement Overview

Summary

The Canadian Bank of Commerce exhibits strong revenue growth and profitability with a high income statement score of 85. The balance sheet is solid with a score of 75, though leverage could be improved. Cash flow is strong but shows some volatility, with a score of 78.

Income Statement

Very Positive

The Canadian Bank of Commerce demonstrates strong revenue growth, with a TTM revenue increase of 4.1% compared to the previous year. The gross profit margin and net profit margin are robust at 100% and 28.5%, respectively, reflecting efficient cost management. However, there's a notable decline in EBIT margin from the previous periods, suggesting rising operational costs.

Balance Sheet

Positive

The bank maintains a healthy equity position with a debt-to-equity ratio of 3.55, indicating a moderate level of leverage. The equity ratio is at 5.67%, which is typical for the banking industry but could be improved. The return on equity shows a solid performance at 12.33%, indicating effective use of shareholder funds.

Cash Flow

Positive

Operating cash flow is strong, with a TTM figure significantly higher than net income, yielding a high operating cash flow to net income ratio of 3.87. The free cash flow has shown significant growth of 182.2% over the previous year, although fluctuations in free cash flow over the years indicate potential volatility in cash generation capabilities.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
26.57B	25.53B	21.31B	21.76B	19.96B	18.67B
	Gross Profit
26.57B	25.53B	23.29B	21.76B	19.96B	18.67B
	EBIT
8.36B	11.19B	9.56B	17.49B	8.30B	4.89B
	EBITDA
9.25B	12.36B	8.05B	8.97B	9.28B	5.80B
	Net Income Common Stockholders
7.56B	7.12B	5.00B	6.22B	6.43B	3.79B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
39.75B	93.25B	80.52B	92.72B	88.15B	117.07B
	Total Assets
352.04B	1.04T	975.72B	943.60B	837.68B	769.55B
	Total Debt
4.77B	208.49B	194.50B	187.45B	164.17B	45.86B
	Net Debt
-8.36B	152.46B	131.33B	114.13B	94.90B	-16.66B
	Total Liabilities
336.08B	982.98B	922.51B	893.22B	791.85B	728.22B
	Stockholders Equity
15.79B	58.73B	52.98B	50.18B	45.65B	41.15B
Cash Flow		Free Cash Flow
28.21B	10.00B	11.14B	21.61B	-4.17B	59.99B
	Operating Cash Flow
29.29B	11.09B	12.15B	22.71B	-3.33B	60.30B
	Investing Cash Flow
-46.90B	-20.75B	-20.76B	-24.39B	-3.51B	-19.41B
	Financing Cash Flow
25.53B	-2.61B	-2.16B	-1.61B	-1.95B	-1.22B

Canadian Bank of Commerce Technical Analysis

Technical Analysis Sentiment

Negative

Last Price78.89

Price Trends

50DMA

83.37

Negative

100DMA

86.62

Negative

200DMA

81.06

Negative

Market Momentum

MACD

-1.04

Negative

RSI

43.32

Neutral

STOCH

21.92

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CM, the sentiment is Negative. The current price of 78.89 is below the 20-day moving average (MA) of 80.67, below the 50-day MA of 83.37, and below the 200-day MA of 81.06, indicating a bearish trend. The MACD of -1.04 indicates Negative momentum. The RSI at 43.32 is Neutral, neither overbought nor oversold. The STOCH value of 21.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CM.

Canadian Bank of Commerce Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RY	81 Outperform	$226.56B	13.03	14.39%	3.64%	11.51%	14.79%
TD	76 Outperform	C$142.22B	17.20	7.68%	5.18%	11.78%	-25.44%
CM	75 Outperform	$75.85B	10.44	13.23%	4.67%	10.79%	18.20%
BMO	71 Outperform	$94.37B	12.18	10.01%	4.90%	10.57%	50.35%
BNS	68 Neutral	$81.72B	12.95	8.34%	6.90%	3.72%	-17.99%
NA	64 Neutral	$44.59B	10.38	15.64%	3.97%	17.13%	14.73%
Sector *	64 Neutral	$13.46B	9.44	9.34%	4.72%	16.14%	-8.80%

* Financial Sector Average

Performance Comparison

TSE:CM

Canadian Bank of Commerce

78.89

15.41

24.27%

TSE:NA

National Bank of Canada

110.21

2.15

1.99%

TSE:BMO

Bank Of Montreal

124.47

0.88

0.71%

TSE:TD

Toronto Dominion Bank

79.20

4.13

5.51%

TSE:RY

Royal Bank Of Canada

153.60

21.23

16.04%

TSE:BNS

Bank Of Nova Scotia

63.64

0.63

1.00%

Canadian Bank of Commerce Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -8.00% | Next Earnings Date: May 29, 2025

Earnings Call Sentiment Positive

CIBC reported record-breaking revenue and growth across all business units, with strong capital and liquidity positions and positive operating leverage. However, the bank faces challenges due to economic and trade uncertainties, elevated expense growth, and increased provisions for credit losses.

Highlights

Record-Breaking Revenue and Growth

CIBC reported revenues of $7.3 billion, up 17% from the prior year, with record top-line results across all business units. Adjusted earnings per share were $2.20, up 22% from the prior year, and adjusted ROE was strong at 15.3%.

Strong Capital and Liquidity Position

CIBC grew its CET1 ratio to 13.5%, up from 13.3% last quarter, and repurchased 3.5 million common shares. The bank's liquidity coverage ratio remained robust at 132%.

Robust Performance Across Business Segments

Canadian Personal and Business Banking showed strong growth with mass affluent client base growing 4.5 times faster than the rest of the client base. North American Commercial Banking saw loans and deposits up 8% and 10% respectively in Canada.

Positive Operating Leverage and Efficiency

Achieved sixth consecutive quarter of positive operating leverage, with operating leverage at 190 basis points. Non-trading fee income was up 11% from the prior year.

Lowlights

Economic and Trade Uncertainty

Trade tensions between Canada and the United States have led to disruptions in some sectors, creating economic and political volatility, and uncertainty about potential new or increased tariffs.

Elevated Expense Growth

Expense growth was elevated from the low prior year quarter, partly due to legal provisions and foreign exchange translation, with expenses linked to strong revenues and employee-related costs.

Increase in Provisions for Credit Losses

Total provisions for credit losses were $573 million in Q1, up from $419 million last quarter, with an increase in performing credit provisions due to growing macroeconomic risks.

Company Guidance

In the CIBC Q1 2025 conference call, the bank reported impressive financial metrics, indicating strong performance across its business units. The bank achieved revenues of $7.3 billion, a 17% increase from the previous year, with adjusted earnings per share reaching a record high of $2.20, up 22% year-over-year. The adjusted return on equity (ROE) stood at a robust 15.3%. CIBC also enhanced its capital position by repurchasing 3.5 million common shares and increasing its Common Equity Tier 1 (CET1) ratio to 13.5% from 13.3% the previous quarter. Non-trading fee income surged by 11%, while the bank's non-trading margins improved by 17 basis points. The bank maintained positive operating leverage for the sixth consecutive quarter and reported a total provision for credit losses of $573 million, reflecting a cautious approach amid macroeconomic uncertainties. CIBC's strategy continues to focus on growing its mass affluent and private wealth franchise, expanding digital banking capabilities, and enhancing connectivity with clients, contributing to its sustained strong performance and positioning for future growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.