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Comerica cost-cutting plan gets thumbs down from investors

Jun. 16, 2016 12:29 PM ETComerica Incorporated (CMA) StockCMABy: Stephen Alpher, SA News Editor
  • Since June 1 when CEO Ralph Babb disclosed preliminary results of a strategic review by Boston Consulting Group, Comerica (NYSE:CMA9% decline has outpaced that of its peers.
  • Investors were probably hoping for a sale or breakup, but the bank has ruled out a divestiture of one of its three main regional divisions -Texas, California, Michigan - and will instead focus on its Growth in Efficiency and Revenue plan (GEAR).
  • Not a fan is Dick Bove who says the options are to sell now at a premium to the current stock price, or go through three years of pain to "bring the company into the 21st century ... Which would you choose?"
  • Also hurting is the Fed's dovish turn as Comerica may have mad the most to gain from rate hikes, says Stephens' Terry McEvoy.
  • The stock's lower by another 2.7% today.

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