Wells Fargo Initiates Comerica At Outperform

Wells Fargo has published a research report and has initiated coverage on Comerica Inc. (NYSE: CMA) with an Outperform rating.

In the report, Wells Fargo writes "We are initiating coverage of CMA with an Outperform rating and a 12-month valuation range of $49-52--implying 20-27% potential upside from CMA's current price. CMA's above-average loan growth, superior capital flexibility, and below-peer valuation are the primary drivers of our rating. Our 2011 and 2012 EPS estimates are $1.80 and $2.95, respectively. Comparatively, consensus stands at $1.77 for 2011 and $2.89 for 2012. CMA's traditional focus on commercial and industrial (C&I) lending should drive superior loan growth in 2011 relative to more consumer-oriented LCRBs, in our view. We estimate CMA's 2011 average loan growth at 2.1% versus a peer group average of -0.8%, led by improving economic conditions (and export activity) in Texas, California, and Michigan. CMA is also the most positioned to benefit from higher interest rates, which we expect by mid/late 2011. As a result, we expect CMA's EPS growth to prove superior to its peer group in 2011 12."

Comerica Inc. closed yesterday at $40.24.