Commerce Bancshares (CBSH) Stock Forecast & Price Target

Commerce Bancshares Inc. demonstrates a positive outlook supported by significant growth in tangible book value (TBV) and tangible common equity (TCE), with TBV increasing by 3% quarter-over-quarter to $27.41 and TCE rising by 41 basis points to 11.3%. The bank is also achieving strong profitability metrics, evidenced by a return on assets (ROA) of 1.78% and a return on tangible common equity (ROTCE) of 15.9%, which reflect its continued competitive position in the market. Furthermore, expectations for loan growth of 4.4% and deposit growth of 2.6% this year, alongside an increase in projected operating earnings per share, highlight Commerce Bancshares's robust financial momentum and ongoing client acquisition efforts in its wealth management sector.

Commerce Bancshares Inc has demonstrated significant underperformance, lagging behind the KRE index by 12% year-to-date, resulting in a decline in its stock valuation to levels near the lowest observed in the past five years. The bank is facing challenges with net interest margin (NIM) compression, which has been exacerbated by declining cash and securities yields, as well as a shortfall in pre-provision net revenue (PPNR) linked to softer net interest income (NII) and restrained balance sheet growth. Additionally, projections for future operating earnings per share (EPS) have been lowered by 2%-3% due to diminishing NII and NIM outlooks, with anticipated growth in loans remaining weak amid heightened competition in pricing.