Canadian Imperial Bank of Commerce Earnings: Better Provisioning and a Strong Finish for 2024

Narrow-moat-rated Canadian Imperial Bank of Commerce, or CIBC, reported decent fiscal fourth-quarter earnings that were largely in line with our expectations, with strong trading results and net interest income growth helping total revenue. Adjusted net income increased by 24% from a year ago to CAD 1.9 billion. Adjusted earnings per share were CAD 1.91, up 22% year over year and down 1% quarter over quarter. The results translate into an adjusted return on equity of 13.4%, below the bank’s updated medium-term target of 15% (from 16%). Given that fourth-quarter results and management's outlook all largely align with our previous views of CIBC, we maintain our current fair value estimates of CAD 70/USD 51, and we view shares as overvalued.