Commerce Bancshares: Topline Outlook Is Rosy But Stock Appears Overvalued

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Sheen Bay Research


  • Loan growth will decelerate due to high interest rates and falling consumer confidence. Nevertheless, it will remain near the historical average thanks to commercial loans.
  • The top line is only moderately sensitive to rate changes.
  • Higher interest rates will continue to drag the equity book value per share, which will hurt equity valuation.
  • The December 2022 target price suggests a significant downside from the current market price. Further, CBSH is offering a low dividend yield.
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Moderate loan growth that's in line with the historical average will likely support the earnings of Commerce Bancshares, Inc. (NASDAQ:CBSH) through the end of 2023. Further, the moderately rate-sensitive topline will benefit from higher interest rates. On the other hand, higher net provision

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Sheen Bay Research profile picture
Around 10 years of experience covering Banks and Macroeconomics. Passionate about discovering lucrative investments and generating alpha.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: This article is not financial advice. Investors are expected to consider their investment objectives and constraints before investing in the stock(s) mentioned in the article.

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