Opinions John Wilson
Canadian Imperial Bank of CommerceCM.TODON'T BUYAug 29, 2013
Stock price when the opinion was issued
As of Jul 10, 2026. Market Open.
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Premium contentWe again reiterate this stalwart Canadian institution as a TOP PICK. Recently reported earnings showed a 28% increase in net income (led by a 55% increase in US based business) along with a profit margin of 27%. We like that cash reserves are growing, while debt is retired and shares bought back. It trades at 16x earnings, 2.5x book and supports a 16% ROE. We recommend trailing up the stop (from $140) to $152, looking for $190 -- upside potential of 16%. Yield 2.5%
(Analysts’ price target is $168.00)
Premium contentWe reiterate CM as a TOP PICK. If you are banking on the Canadian economy finding its direction thru infrastructure and energy development, the company is well positioned to benefit. It trades at 15x earnings, 2.4x book and supports a ROE of 16%. We like that cash reserves are growing, while shares are aggressively bought back and debt is retired. We continue to recommend a stop at $140, looking to achieve $179 -- upside potential of 16%. Yield 2.8%
(Analysts’ price target is $156.50)
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We're speculating what will happen. Last year, most of the Canadian area was protected from tariffs because of CUSMA. The US would be paying more for our goods through tariffs; they buy many of our goods. Banks are at the tail end of their elevated provisions and their stocks have done quite well as interest rates have declined. The Bank of Canada has signalled it may hold rates for a while, but the government has released more fiscal support and opening more trade channels, which are good. She remains bullish banks.
Premium contentCM is one of five Canadian banks who have partnered to create the Defense, Security, and Resilience Bank (DSRB) designed to provide funding to the Government of Canada's commitment to boost military spending. We think the DSRB will create another avenue for business growth in the years to come. It trades at 16x earnings, 2.1x book and supports a 14% ROE. We like that cash reserves are growing, while debt is retired and shares bought back. Its dividend is backed by a payout ratio at 45% of cash flow. We recommend setting a stop-loss at $117, looking to achieve $154 -- upside potential of 15%. Yield 3.0%
(Analysts’ price target is $130.77)
The new infrastructure projects that Ottawa has announced will benefit the banks. NA is more Canadian than CIBC, though both are. Big projects need a lot of funding, and the banks' job is to find that capital. CM is pretty well priced now.
Michael Sprung
All banks reported good results last quarter which is because they did a good job diversifying. They have the Aerogold Visa card. It is about 10% of their net income. They are trying to negotiate with TD to sell it back to them. A lot of people are worried it could be too expensive. They have a discounted multiple because people think they will still trip over something. Would not be his first choice. TD would be. When it happens, he believes you will see more steepening in the yield curve. Banks should react to this. But he is more concerned with whether the Canadian real estate market will flat line or dip.