Analyst notes continue to roll in on Comerica Incorporated (NYSE:CMA), after the regional lender reported third-quarter earnings yesterday morning. Despite the firm's profit beat, the bulk of the brokerage attention has been bearish, with J.P. Morgan Securities downgrading the stock to "underweight" from "neutral," and cutting its price target by $5 to $65.
Diving deeper, the brokerage firm said that while the shares look cheap, CMA stock is more of a "value trap" than a "value," and expressed concern over rising pension costs. This was echoed in a note from Evercore ISI, which also cited Fed rate cuts as a potential headwind. Meanwhile, price-target cuts came through yesterday afternoon at D.A. Davidson (to $73) and Wedbush (to $67).
Most analysts are already skeptical of CMA stock, which has shed 23.9% year-over-year -- and was recently rejected again by its descending 80-day moving average. Prior to today, 19 of 22 brokerages maintained a "hold" or worse rating on the financial shares. Plus, the average 12-month price target of $69.41 is a tame 7.3% premium to current levels.
With CMA trading down 1.2% at $64.70 -- extending Wednesday's 2.3% post-earnings drop -- it looks like options bears are cashing out. Specifically, sell-to-close activity is detected at the now in-the-money October 65 put, currently home to peak open interest on Comerica stock.