Analyst Note| Eric Compton, CFA |
Narrow-moat-rated Canadian Imperial Bank of Commerce reported decent fiscal first-quarter earnings. Adjusted earnings per share were CAD 3.58, soundly beating consensus. This represented year-over-year EPS growth of 10%, and the earnings growth was broadly based, as fee income and net interest income both saw low single digit growth, expenses were flat, and provisioning fell materially. Provisioning was back to its lowest level in years. These results align with our view that the Canadian banks will be fine and that better results should be returning in 2021. So far, results have been even better than expected. We are increasing our fair value estimate to CAD 122/$97 per share from CAD 120/$93. As the pandemic has further played out and we are more confident in vaccine distribution and economic resilience, we are also lowering our uncertainty rating back to medium from high.