Commerce Bancshares: Topline Outlook Is Rosy But Stock Appears Overvalued

Sheen Bay Research profile picture
Sheen Bay Research
2.97K Followers

Summary

  • 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.
Bond investment table

outline205

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

This article was written by

Sheen Bay Research profile picture
2.97K Followers
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.

Recommended For You

Comments (1)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.