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Opinions Brendan Caldwell
Canadian Imperial Bank of CommerceCM.TOCOMMENTOct 05, 2016
Brendan CaldwellStock price when the opinion was issued
As of Aug 21, 2026. Market Open.
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He'd hold. Despite the incredible chart, the banks are very well positioned. Benefitting from GenAI and AI investments. Regulatory environment is in their favour with OSFI lowering threshold for risk-weighted assets, which means they have more capital to lend. Consumer is reasonably healthy. As long as interest rates don't go flying through the roof anytime soon, the banks can continue to do well.
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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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Premium contentWe'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
One of Canada’s largest banks. A funny one in that it always seems to stub its toe. All Canadian banks have pulled back because of concerns about exposure to the energy space. This is one of the most exposed. Pays a pretty strong dividend. It will be able to fully participate in Canada’s growth, but they do have a tendency to have something happen to them. Expects there will be more volatility than many of the others, but less exposure to the energy sector. Not a bad choice.