Strong Start to 2022 for Canadian Imperial Bank of Commerce

Narrow-moat rated Canadian Imperial Bank of Commerce reported solid fiscal first-quarter earnings. Adjusted earnings per share were CAD 4.08, coming in above the Factset consensus estimate of CAD 3.68. The bank’s results were strong across the board, producing a return on equity of 18%. Revenue was up 11% year over year, driven by net interest income growth of 10% and fee growth of 11%. With rate hikes coming up, we expect momentum for net interest income should continue. Expenses were up 10%, allowing the bank to generate pretax pre-provision growth of 11% year over year. This led to 14% growth in diluted EPS year over year. Based on these results, we don’t anticipate any material change to our fair value estimate of CAD 156/USD 122.