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Core Insights - Canadian Imperial Bank of Commerce (CM) shares rose 5.5% after reporting strong third-quarter fiscal 2024 results, with adjusted earnings per share increasing by 27% year-over-year to C$1.93 [1][2] - The bank's total revenues improved by 13% year-over-year to C$6.6 billion, driven by higher net interest income and non-interest income, although non-interest expenses rose by 11% [3][4] Financial Performance - Adjusted net income reached C$1.8 billion ($1.31 billion), reflecting a 25% increase compared to the previous year [2] - Net interest income was C$3.53 billion ($2.58 billion), up 9% year-over-year, while non-interest income increased by 17% to C$3.07 billion ($2.24 billion) [3] - Non-interest expenses totaled C$3.68 billion ($2.69 billion), marking an 11% rise year-over-year [3] Efficiency and Credit Provisions - The adjusted efficiency ratio improved to 55.5%, down from 56.8% in the prior-year quarter, indicating enhanced profitability [4] - Provisions for credit losses decreased by 35% year-over-year to C$483 million ($352.7 million) [4] Asset and Capital Ratios - As of July 31, 2024, total assets were C$1.02 trillion ($738.7 billion), a 2% increase from the prior quarter [5] - Net loans and acceptances rose by 1% to C$550.15 billion ($397.9 billion), while deposits grew by 2% to C$743.45 billion ($537.7 billion) [5] - The Common Equity Tier 1 ratio improved to 13.3% from 12.2% year-over-year, with the Tier 1 capital ratio at 14.8% compared to 13.7% in the prior-year period [6] Industry Context - The overall banking environment is characterized by high interest rates and decent loan demand, which are expected to support revenue growth for Canadian Imperial [7] - Other Canadian banks, such as Toronto-Dominion Bank (TD) and Bank of Montreal (BMO), faced challenges, with TD reporting a net loss due to increased provisions and BMO experiencing a decline in adjusted earnings per share [8][10]

jetcityimage/iStock Editorial via Getty Images Data by YCharts Canadian Imperial Bank of Commerce (NYSE:CM) ("CIBC") has had a solid enough 2024 so far. Stalling net interest income and rising expenses - both operating and credit-linked - have been sources of concern here, but the bank has largely taken these in stride, helped by robust fee income generation. Its stock has also been among the better performing 'Big Six' Canadian banks this year, returning around 18% (with dividends) at the time of writing. ...

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Financial Data and Key Metrics Changes - The company reported adjusted net income of $1.9 billion, an increase of 28% year-over-year, with adjusted earnings per share (EPS) of $1.93 [6][16] - Adjusted return on equity (ROE) improved to 14%, reflecting strong performance across core businesses [7][16] - Revenues reached $6.6 billion, up 12% from the previous year, supported by improved spread income and growth in fee-based businesses [16][18] Business Line Data and Key Metrics Changes - Personal and Business Banking net income increased by 20% to $633 million, driven by lower provisions for credit losses [20] - Canadian commercial banking and wealth management revenues rose by 7% to $1.4 billion, with wealth management growth of 15% [21] - U.S. commercial banking net income was $163 million, significantly up from the prior year, mainly due to lower loan loss provisions [21] Market Data and Key Metrics Changes - Average loans in Canada increased by 2% sequentially, indicating improving client sentiment [9] - The Canadian wealth business saw a 20% increase in assets under administration (AUA) year-over-year, with strong mutual fund net sales [10] - Capital markets revenues in the U.S. increased by 24% compared to the previous year, reflecting growth in cross-business referral activity [11] Company Strategy and Development Direction - The company is focused on a client-centric strategy, aiming to deepen relationships and enhance digital capabilities [5][14] - There is a strong emphasis on leveraging AI as a strategic enabler, with several AI tools launched to improve productivity and client service [12][13] - The company plans to prioritize high-return client segments and continue investing in technology to drive efficiency and growth [14][58] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving sentiment among commercial clients and anticipated a pickup in business activity through 2025 [9][33] - The outlook for credit performance remains cautious, with expectations of continued headwinds from unemployment [33][25] - The company is committed to maintaining a disciplined approach to capital allocation, focusing on organic growth and prudent risk management [35][58] Other Important Information - The company ended the quarter with a Common Equity Tier 1 (CET1) ratio of 13.3% and a liquidity coverage ratio (LCR) of 126%, both above regulatory requirements [6][19] - A normal course issuer bid for 2% of outstanding shares was announced, reflecting confidence in capital position [6] Q&A Session Summary Question: Improvement in Canadian consumer sentiment and GDP outlook - Management indicated a transition towards better sentiment, expecting further rate relief to bolster confidence among consumers and businesses [33] Question: Capital allocation and potential M&A opportunities - The focus remains on organic growth, with a cautious approach to potential acquisitions, emphasizing the importance of building capital and delivering premium ROE [35] Question: Loan growth versus deposit growth in Canadian banking - Management clarified that the slower loan growth is a result of a selective strategy focused on building deeper client relationships rather than aggressive lending [40][41] Question: Credit card portfolio health and seasonal trends - Management confirmed that recent growth in credit card usage is primarily seasonal, with overall credit quality remaining strong [53] Question: Commercial real estate exposure and watch list loans - Management acknowledged ongoing monitoring of the commercial real estate sector, indicating that while stress is not over, the worst may be behind them [72]

Group 1: Earnings Performance - Canadian Imperial Bank reported quarterly earnings of $1.41 per share, exceeding the Zacks Consensus Estimate of $1.28 per share, and up from $1.14 per share a year ago, representing an earnings surprise of 10.16% [1] - The bank posted revenues of $4.82 billion for the quarter ended July 2024, surpassing the Zacks Consensus Estimate by 4.86%, compared to $4.38 billion in the same quarter last year [2] - The company has consistently surpassed consensus EPS estimates over the last four quarters [2] Group 2: Stock Performance and Outlook - Canadian Imperial Bank shares have increased by approximately 13.3% since the beginning of the year, while the S&P 500 has gained 17.2% [3] - The current consensus EPS estimate for the upcoming quarter is $1.25 on revenues of $4.62 billion, and for the current fiscal year, it is $5.02 on revenues of $18.29 billion [7] - The estimate revisions trend for Canadian Imperial Bank is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Group 3: Industry Context - The Zacks Industry Rank for Banks - Foreign is in the top 21% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Report to Shareholders for the Third Quarter, 2024 www.cibc.com August 29, 2024 Report of the President and Chief Executive Officer Overview of results CIBC today announced its financial results for the third quarter ended July 31, 2024. Third quarter highlights Results for the third quarter of 2024 were affected by the following items of note aggregating to a negative impact of $0.11 per share: • $88 million charge to income tax related to the enactment of a Federal tax measure that denies the dividends re ...

Wall Street expects a year-over-year increase in earnings on higher revenues when Canadian Imperial Bank (CM) reports results for the quarter ended July 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on Augu ...

Core Viewpoint - The recent upgrade of Canadian Imperial Bank to a Zacks Rank 2 (Buy) reflects an upward trend in earnings estimates, indicating a positive earnings outlook that could lead to increased stock price [2][10]. Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [3][11]. - Institutional investors utilize earnings estimates to calculate the fair value of a company's shares, leading to significant buying or selling activity that impacts stock prices [3]. Zacks Rank System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [4]. - The Zacks rating system maintains an equal proportion of 'buy' and 'sell' ratings across its universe of over 4000 stocks, ensuring that only the top 20% of stocks receive favorable ratings based on earnings estimate revisions [13]. Earnings Estimate Revisions for Canadian Imperial Bank - Over the past three months, the Zacks Consensus Estimate for Canadian Imperial Bank has increased by 0.2%, indicating a positive trend in earnings estimates [12]. - For the fiscal year ending October 2024, Canadian Imperial Bank is expected to earn $5.05 per share, reflecting a 1.4% change from the previous year's reported number [5]. Implications of the Upgrade - The upgrade to Zacks Rank 2 positions Canadian Imperial Bank in the top 20% of Zacks-covered stocks, suggesting potential for near-term stock price appreciation [14]. - The rising earnings estimates and subsequent rating upgrade imply an improvement in the company's underlying business, which could attract investor interest and drive the stock price higher [10].

Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases. Looking at ...