On Friday, RBC Capital adjusted its price target for shares of Canadian Imperial Bank of Commerce (CM:CN) (NYSE: CM), increasing it to Cdn$69.00 from the previous Cdn$68.00. The firm has kept its Sector Perform rating on the bank's stock. This revision follows the bank's recent quarterly results, which were deemed satisfactory by the analyst, especially considering the broader context of negative surprises during the quarter.
The bank's performance in the second quarter of 2024 was noted to align with RBC Capital's expectations. The analyst acknowledged that despite a challenging quarter for many, Canadian Imperial Bank of Commerce managed to navigate effectively. The bank undertook a strategic move to clean up its commercial real estate (CRE) portfolio in the U.S. through loan sales, which was seen as a positive step, although the U.S. personal and commercial (P&C) banking results were not as strong as expected.
The results from the U.S. operations showed lower performance due to higher than anticipated impaired provisions for credit losses (PCLs). Nonetheless, the bank experienced some growth in its U.S. loan portfolio. Additionally, the analyst highlighted effective expense control measures implemented by the bank. These efforts, coupled with a decline in corporate losses and a robust capital position, contributed to the bank's solid standing amidst a challenging financial quarter.
Canadian Imperial Bank of Commerce's capital health was specifically noted, which suggests a stable foundation for the bank's operations. This factor, along with the overall performance, informed RBC Capital's decision to slightly raise the price target for the bank's shares while maintaining the current rating.
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